10-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 25, 2004
or
[    ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from                                                                       to
Commission file number   1-4105
BAUSCH & LOMB INCORPORATED
(Exact name of registrant as specified in its charter)
NEW YORK	16-0345235
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
ONE BAUSCH & LOMB PLACE, ROCHESTER, NEW YORK			14604-2701
(Address of principal executives offices)			(Zip Code)
Registrant's telephone number, including area code 585.338.6000
Securities registered pursuant to Section 12(b) of the Act:
Title of each class		Name of each exchange on which registered
Common Stock, $0.40 par value		New York Stock Exchange
Securities registered pursuant to section 12(g) of the Act:
None                                                                                                                                                                      &nbs p;
(Title of class)
&n bsp;
(Title of class)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.                    [X] Yes    [   ] No
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K (§ 229.405 of this chapter) is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.   [   ]
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Act). [X] Yes    [  ] No      The aggregate market value of the voting stock, computed using the average bid and asked price of such stock, held by non-affiliates of the registrant as of June 26, 2004 was $3,360,600,391. For the sole purpose of making this calculation, the term "non-affiliate" has been interpreted to exclude directors and officers. Such interpretation is not intended to be and should not be construed to be, an admission by Bausch & Lomb Incorporated or such directors or officers that such directors and officers are "affiliates" of Bausch & Lomb Incorporated, as that term is defined under the Securities Act of 1933.
The number of shares of Voting Stock of the registrant, outstanding as of March 1, 2005, was 53,645,625, consisting of 53,469,519 shares of Common stock and 176,106 shares of Class B stock, which are identical with respect to dividend and liquidation rights and vote together as a single class for all purposes
DOCUMENTS INCORPORATED BY REFERENCE
Part III Portions of the registrant's definitive proxy statement for its 2005 annual meeting of shareholders, which proxy statement will be filed no later than 120 days after the close of the registrant's fiscal year ended December 25, 2004 (Proxy Statement), are hereby incorporated by reference in Part III of this Report on Form 10-K. With the exception of the pages of the Proxy Statement specifically incorporated by reference herein, the Proxy Statement is not deemed to be filed as part of this Report on Form 10-K.

ii

	Table of Contents
Part I			Page
Item 1.	Business		1
Item 2.	Properties		4
Item 3.	Legal Proceedings		4
Item 4.	Submission of Matters to a Vote of Security Holders		5
Part II
Item 5.	Market for Bausch & Lomb Incorporated's Common Stock, Related Shareholder Matters and Issuer Purchases of Equity Securities		7
Item 6.	Selected Financial Data		8
Item 7.	Management's Discussion and Analysis of Financial Condition and Results of Operations		8
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk		27
Item 8.	Financial Statements and Supplementary Data		28
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		59
Item 9A.	Controls and Procedures		59
Item 9B.	Other Information		60
Part III
Item 10.	Directors and Executive Officers of Bausch & Lomb Incorporated		61
Item 11.	Executive Compensation		61
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		61
Item 13.	Certain Relationships and Related Transactions		61
Item 14.	Principal Accounting Fees and Services		61
Part IV
Item 15.	Exhibits and Financial Statement Schedules		62
Signatures Exhibit Index Exhibits		63 66 (Attached to this Report on Form 10-K)

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Part I

Item 1.     Business

Unless the context indicates otherwise, the terms "we", "our" and "ours" are used herein to refer to Bausch & Lomb Incorporated and its consolidated subsidiaries. Dollar amounts are stated in millions, except per share data. Per share amounts in this section reflect diluted average shares outstanding for the applicable period.

(a) General Development of Business

We are a world leader in the development, manufacture and marketing of eye health products. Our product lines include soft and rigid gas permeable (RGP) contact lenses and lens care solutions and ophthalmic surgical and pharmaceutical products. Our business was founded in 1853 and incorporated in the State of New York in 1908. Our principal executive offices are located at One Bausch & Lomb Place, Rochester, New York 14604-2701. Our telephone number is 585.338.6000.
     Our strategy is to target those portions of the eye health market with strong growth potential or good profit margins or both. We believe our fundamental strengths - sound strategy, excellent technology, global infrastructure and strong brand - will permit us to take advantage of the opportunities in both mature and developing markets.
     There were no significant acquisitions or divestures in the three-year period covered by this report.
     Revenues for the year ended December 25, 2004 were $2,232, an increase of 11% from 2003. Net earnings of $160 or $2.93 per share increased 27% and 25% from the respective year-ago amounts. Prior-year amounts reflected an after-tax charge of $0.9 or $0.02 per share as a cumulative effect of change in accounting principle.

(b) Financial Information about Operating Segments

Information concerning sales, operating earnings and assets attributable to each of the Company's operating segments is set forth on pages 10 to 16 in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of this Report on Form 10-K under the section entitled Net Sales and Income by Business Segment and Geographic Region and pages 38 to 40 in Item 8. Financial Statements and Supplementary Data of this Report on Form 10-K under Note 3 ¾ Business Segment and Geographic Information. This information is incorporated herein by reference.

(c) Narrative Description of Business

Operating Segments For commercial operations, we are organized into three geographic segments: the Americas; Europe, Middle East and Africa (EMEA); and Asia. Our additional operating segments, which are managed on a global basis, are the Research, Development and Engineering organization and the Global Supply Chain Organization.

Products In each geographic region, we market products in five product categories: contact lenses, lens care products, ophthalmic pharmaceuticals, cataract and vitreoretinal surgery, and refractive surgery. Below is a description of each product category to the extent that it is material to an understanding of our operations.

     Contact Lenses - Revenues from contact lenses constituted 30% of our total revenues in fiscal year 2004 and grew 14% from the prior year (and up 8% excluding the positive benefits from foreign currency changes). This growth rate compares to overall projected contact lens market growth in the mid-to-upper single digits. We pioneered the development of soft contact lens technology and in 2003 we were the third largest manufacturer of contact lenses in the world. Recently, two smaller competitors completed a business combination and the revenues of the combined entity are expected to surpass our revenues in 2004, placing us in fourth position. Our product portfolio is one of the broadest in the industry and includes traditional, planned replacement disposable, daily disposable, multifocal, continuous wear and toric soft contact lenses and rigid gas permeable (RGP) materials. These products are marketed by our own sales force and through distributors to licensed eye care professionals and health product retailers. We believe our contact lenses marketed under the Bausch & Lomb, Boston, Medalist, PureVision and SofLens trademarks receive broad recognition from consumers and eye care professionals.
     Our strategy is to focus our development efforts in what we believe are the faster-growing sustainable market segments, while capitalizing on the breadth of our entire portfolio. Our SofLens66 Toric lens, a planned replacement lens for people with astigmatism, is the leading toric lens worldwide. The SofLens Multi-Focal lens, a cast-molded multifocal lens for people with presbyopia, is the number one prescribed multifocal lens in the U.S. and Europe. The PureVision spherical (or non-toric) contact lens, our breakthrough silicone hydrogel lens for up to thirty days of wear, is gaining share outside the U.S. and in 2004 we introduced a toric version of the lens in non-U.S. markets. While we have presently been prohibited from selling or marketing the PureVision product line in the U.S. due to an adverse patent lawsuit ruling, as a result of a settlement reached with CIBA Vision

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Corporation (CIBA), we will relaunch both the spherical and toric versions of the product after the expiration of the patent in question in April 2005. In the second quarter of 2004, we launched the SofLens One Day lens in Japan under the Medalist brand name. Japan is the world's second-largest contact lens market. We have received regulatory approval and expect to launch Medalist II, a two-week disposable spherical (or non-specialty) lens, during the first quarter of 2005. We are awaiting regulatory approvals and expect to launch our Medalist Multi-Focal and PureVision contact lenses into the important Japanese market over the next two years. Longer-term, we believe our contact lens product category will grow as a result of these and other new products - especially silicone hydrogel offerings - and further global market expansion.

Lens Care - Revenues from lens care products constituted 23% of our total revenues in fiscal year 2004, growing 5% from 2003 (or 2% excluding the effect of currency). The global market exhibited no growth to low-single digit declines. Our lens care portfolio includes multi-purpose solutions, enzyme cleaners and saline solutions. These products are marketed by our sales force and through distributors to licensed eye care professionals, health product retailers, independent pharmacies, drug stores, food stores and mass merchandisers. We believe we have developed significant consumer and eye care professional recognition of our key lens care brands: the Bausch & Lomb, Boston, ReNu and Sensitive Eyes.
     We are the global leader in market share for lens care products. Our strategy is to outpace market trends and increase our share through continued leadership in the multi-purpose segment, the only growing category in the overall lens care market. Our flagship brand, ReNu, has the leading market position in this segment in the U.S. and our Boston brand of products for RGP lens care holds a commanding market share worldwide. In the third quarter of 2004, we introduced ReNu with MoistureLoc, an all-new multi-purpose solution in the U.S. and Europe. This is the first multi-purpose product with a labeling claim approved by the U.S. Food and Drug Administration (FDA) indicating that it provides sustained comfort and may help improve comfort for patients experiencing contact lens dryness - one of the leading causes of contact lens dropouts. We will expand the availability of ReNu with MoistureLoc into Asian markets in 2005, as well as launch ReNu MultiPlus in Japan.

Pharmaceuticals - Revenues from pharmaceuticals products comprised 24% of consolidated revenues in fiscal year 2004, and grew 12% (or 7% excluding the benefit of currency). We estimate the global ophthalmic pharmaceuticals market to be growing in the mid-to-upper single digits range. Our pharmaceuticals product category includes generic and branded prescription ophthalmic pharmaceuticals, ocular vitamins, over-the-counter medications, nutraceuticals and vision accessories. Pharmaceutical products are marketed by our sales force and distributed through wholesalers, independent pharmacies, drug stores, food stores, mass merchandisers and hospitals. Our key pharmaceutical trademarks are Bausch & Lomb, Alrex, Indocollyre, Liposic, Lotemax, Ocuvite, PreserVision, and Zylet.
     Our strategic focus for the pharmaceuticals category is on proprietary ophthalmic products, continued expansion of the vitamin product portfolio and drug delivery technologies for vitreoretinal diseases. Our recent growth in this product category has been largely driven by our lines of ocular vitamins, especially Ocuvite PreserVision, a patented vitamin supplement sold over the counter, often on the recommendation of eye care professionals. The exact formulation of vitamins and minerals in Ocuvite PreserVision was shown in a 10-year study by the National Eye Institute to reduce the risk of blindness for patients with high risk of developing age-related macular degeneration. This formulation was introduced in several additional European and Asian markets throughout 2004, and in the third quarter of 2004, a soft gel version of the original formula as well as a line extension replacing beta carotene with lutein were launched in the U.S., with global launches to follow . In addition to these lines of ocular vitamins, we launched ophthalmic nutritional products in select European markets in 2004. These products, containing Omega-3 and Omega-6 fatty acids, were designed to target the symptoms of dry eye. We expect to expand the geographic reach of these products in 2005.
     We expect to introduce Lotemax and Alrex, our prescription eye drops incorporating our proprietary corticosteroid loteprednol etabonate, in markets outside the U.S. in 2005. In addition, we launched Zylet, a new product combining loteprednol etabonate with tobramycin, an antibiotic, in the U.S. in the first quarter of 2005. We also anticipate an FDA approval for and U.S. launch of our Retisert implant to treat posterior segment uveitis in the first half of 2005 with a commercial launch thereafter.

Cataract and Vitreoretinal Surgery - Cataract and vitreoretinal revenues comprised 16% of our fiscal 2004 revenues, increasing 9% (or 4% excluding the impact of currency). The overall cataract and vitreoretinal market is estimated to be growing in the mid-single digits. Cataract surgery is the most commonly performed surgical procedure in the U.S. today. Our cataract and vitreoretinal offerings include a broad line of intraocular lenses (IOLs) as well as the Millennium line of phacoemulsification equipment. Phacoemulsification is the procedure by which the patient's natural lens is extracted during cataract surgery. We also sell disposable surgical packs and instruments that are used during the procedure. Our cataract and vitreoretinal surgery products and equipment are marketed by our sales force and through distributors to ophthalmic surgeons, hospitals and ambulatory surgery centers. We believe we have developed substantial professional recognition for our products marketed under t he Bausch & Lomb, Akreos, AMVISC, Millennium, SofPort and Storz trademarks.
     Following the combination of two smaller competitors in 2004, we are now the fourth largest competitor in this market, which is

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dominated by one competitor, Alcon, with a share of more than 50%. Our goal in the cataract and vitreoretinal category is to improve our market share position. We believe we can do this through continued technological advances and geographic expansion for our SofPort and Akreos lines of IOLs, and increased Millennium phacoemulsification equipment placements, which should in turn lead to increased annuity sales of disposables and surgical packs. In the fourth quarter of 2004, we introduced our SofPort AO intraocular lens, an advance in technology incorporating aspheric optics to improve patients' visual acuity after surgery. In 2005, we expect to introduce an advanced optics version of our successful Akreos acrylic IOL in markets outside the U.S. and introduce an advanced inserter system for both product lines. Longer term we expect to introduce our acrylic lens into additional geographic markets, including the U.S. and Japan. We also introduced new modules to our Mill ennium line of microsurgical equipment in 2004, with additional enhancements expected in 2005.

Refractive Surgery - Revenues from products used in refractive surgery accounted for 7% of our 2004 revenues and grew 14% over 2003 (or 10% excluding the benefit of currency). That compares to a global market that is estimated to be growing in the low-double digits. Our products in this category include lasers, microkeratomes, diagnostic equipment and other products used in the LASIK (Laser in-situ Keratomileusis) surgical procedure. Our refractive surgery products are marketed by our sales force and through distributors to ophthalmic surgeons, hospitals and ambulatory surgery centers. We believe we have developed substantial professional recognition of our refractive surgery products and equipment marketed under the Hansatome, Technolas and Zyoptix trademarks.
     Our strategy is to improve our market share of LASIK procedures in the U.S. and to increase the number of custom LASIK procedures in markets outside the U.S., which will increase our annuity stream of revenues from procedural fees and microkeratome blades. This would have the added benefit of increasing profitability, as annuity products generally carry higher operating margins than capital equipment. Our Hansatome microkeratome, the precision cutting tool to create the corneal flap, is the most widely used microkeratome today. We also manufacture and market the disposable blades that are replaced after each LASIK procedure. We expect to launch the Zyoptix XP, our next generation microkeratome with extra precision blades, in the first half of 2005. In markets outside the U.S., our Technolas 217z laser is the most widely used laser due to its superb outcomes and low retreatment rates. In the U.S., our laser was the sixth major laser introduced to the market a nd our share of laser placements is considerably lower than our share in markets outside the U.S. In 2003, we received FDA approval for the Zyoptix system, a product commercially available outside the U.S. since 2000 that provides personalized refractive surgery using advanced and proprietary diagnostic instruments and proprietary algorithms to create customized firing patterns for an upgraded laser. The Zyoptix system offers patients the potential for better outcomes as compared to non-customized LASIK. Our U.S. refractive product line has posted significant growth since the commercial introduction of the Zyoptix system.

Suppliers and Customers We purchase the materials and components for each of our product categories from a wide variety of suppliers. We believe that the loss of any one supplier would not adversely affect our business to a significant extent.
     Our five product categories have different customer bases, from local drug stores to hospital chains to independent practitioners and combined purchase organizations for managed care organizations. No material part of our business, taken as a whole, is dependent upon a single or a few customers.

Patents and Licenses We actively pursue technology development and acquisition as a means to enhance our competitive position. While in the aggregate our patents are of material importance to our business taken as a whole, no single patent or patent license or group of patent licenses relating to any particular product or process is material to any product category. On July 1, 2004, the Company, CIBA and CIBA's parent company, Novartis AG, reached a final settlement agreement that resolved disputes between us in various patent infringement lawsuits and associated patent proceedings and discontinued those legal and patent proceedings. The parties further agreed to cross-license rights to their silicone hydrogel contact lens technologies. We will pay CIBA a royalty on net U.S. sales of PureVision brand contact lenses until 2014 and on net sales outside the U.S. until 2016. The settlement permits us to resume sale and manufacture of PureVision brand contact lenses in the U.S. after April 27, 2005. PureVision brand lenses will continue to be available outside the U.S. under prior court decisions and other arrangements agreed to by the parties.

Seasonality and Working Capital Because of the nature of the products sold, we are not significantly impacted by seasonality issues. In general, the working capital requirements in each of our segments are typical of those businesses.

Competition and Markets We market each of our product categories throughout the world. Each category is highly competitive in both U.S. and non-U.S. markets. For all products, we compete on the basis of product performance, quality, technology, price, service, warranty and reliability.

Research and Development Research and development constitutes an important part of our activities. Research and development

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expenditures included in continuing operations totaled $163 in 2004, as compared to $150 in 2003 and $128 in 2002.

Government Regulation Our products are subject to regulation by governmental authorities in the U.S. and other markets. These authorities, including the FDA in the U.S., generally require extensive testing of new products prior to sale and have jurisdiction over the safety, efficacy and manufacturing of products, as well as product labeling and marketing. In most cases, significant resources must be spent to bring a new product to market in compliance with these regulations. The regulation of pharmaceutical products and medical devices, both in the U.S. and in other markets, has historically been subject to change. Delays in the regulatory approval process may result in delays in coming to market with new products and extra costs to satisfy regulatory requirements.

Environment Our facilities and operations are subject to federal, state and local environmental and occupational health and safety requirements of the U.S. and foreign countries, including those relating to discharges of substances into the air, water and land, the handling, storage and disposal of wastes and the cleanup of properties affected by pollutants. While we are unable to predict what legislation or regulations may be adopted or enacted in the future with respect to environmental protection and waste disposal, existing legislation and regulations have had no material adverse effect on our capital expenditures, earnings or competitive position. Capital expenditures for property, plant and equipment for environmental control facilities were not material during 2004 and are not anticipated to be material in 2005.

Employee Relations As of December 25, 2004 we employed approximately 12,400 employees throughout the world, including approximately 3,500 in the U.S. In general we believe our employee relations to be very good. Less than 5% of our U.S. employees (mainly in our surgical products manufacturing facilities) are represented by unions.

(d) Financial Information about Foreign and Domestic Operations

Information as to sales and long-lived assets attributable to U.S. and non-U.S. geographic regions is set forth under the section entitled Geographic Region on page 40 in Item 8. Financial Statements and Supplementary Data of this Report on Form 10-K under Note 3 ¾ Business Segment and Geographic Information and is incorporated herein by reference.

(e) Available Information

Our internet address is http:/www.bausch.com. Our filings with the Securities and Exchange Commission (SEC), including our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and amendments to those reports, filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, are accessible free of charge on our Web site as soon as reasonably practicable after we electronically file or furnish the material to the SEC. Additionally, our Corporate Governance Guidelines, Code of Business Conduct and Ethics and charters of the Executive, Audit, Compensation and Nominating and Governance Committees of our Board of Directors are available at http:/www.bausch.com/us/vision/about/investor/governance.jsp. Such information is available in print to any shareholder requesting it.

Item 2.     Properties

The Company owns and leases a number of important principal physical properties. The Company's headquarters and one of its manufacturing facilities are located in Rochester, New York. The Company also has U.S.-based manufacturing facilities in Clearwater, Florida, Greenville, South Carolina, St. Louis, Missouri and Tampa, Florida. Outside of the U.S., the Company has manufacturing facilities in Brazil, China, France, Germany, India, Ireland and Scotland.
     Administrative, marketing, research/laboratory, distribution and warehousing facilities are located in various parts of the world.
     The Company considers its facilities suitable and adequate for the operations involved. All facilities are being productively utilized. The majority of the Company's facilities are being utilized to perform more than one operating function and, as such, may house the functions of multiple segments.

Item 3.     Legal Proceedings

A shareholder lawsuit was filed in the U.S. District Court for the Western District of New York on April 13, 2001 against the Company, and its Chief Financial Officer, Stephen C. McCluski, and former Chairman and Chief Executive Officer, William M. Carpenter, and former President, Carl E. Sassano. On August 2, 2004, the parties executed a settlement agreement to settle this matter for $12.5 million in cash, all of which will be paid by the Company's insurance carrier. Following a fairness hearing on

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November 5, 2004, the court entered final judgment approving the settlement and dismissing the action on December 20, 2004.

Item 4.     Submission of Matters to a Vote of Security Holders

Not applicable.

Executive Officers of the Registrant Set forth below is the names, ages (as of March 1, 2005), positions and offices held by and a brief account of the business experience during the past five years of each executive officer.

Name and Age	Position
Ronald L. Zarrella (55)	Chairman and Chief Executive Officer since 2001; Executive Vice President and President, General Motors North America, General Motors Corporation (1998-2001). Vice President and Group Executive, North American Vehicle Sales, Service and Marketing Group, General Motor Corporation (1994-1998).
Alan H. Farnsworth (52)	Senior Vice President and President, Europe, Middle East and Africa Region since June 2001; Corporate Vice President, Pharmaceuticals/Europe (2000-June 2001); Vice President, Corporate Development (1997-2000).
Dwain L. Hahs (52)	Senior Vice President, Global Operations and Engineering since 2000; Senior Vice President and President, Global Vision Care (November 1999-October 2000); Special Assistant to the President (October 1999-November 1999); President, Ray Ban Sun Optics, Luxottica Group SpA (June 1999-September 1999); Executive Vice President and President - Eyewear (April 1997-June 1999).
Paul G. Howes (50)	Senior Vice President and President, Americas Region since June 2003; Vice President, Mid-Atlantic Business Group, Merck & Co., Inc. (2001-June 2003); Vice President Sales and Marketing, Specialty Products, Merck & Co., Inc. (1998-2001).
John M. Loughlin (54)	Senior Vice President and President Asia Region since 2000; Corporate Vice President and President, Asia Region (1999-2000); President, North Asia Division (1996-1999).
Stephen C. McCluski (52)	Senior Vice President and Chief Financial Officer since 1995.
David R. Nachbar (42)	Senior Vice President, Human Resources since October 2002; Senior Vice President, Human Resources, The St. Paul Companies, Inc. (1998-October 2002); Vice President, Human Resources and Chief of Staff-Asia, Citibank NA (1996-1998).
Robert B. Stiles (55)	Senior Vice President and General Counsel since 1997.
Praveen Tyle (44)	Senior Vice President, Research & Development, and Chief Scientific Officer since July 2004; Group Vice President, Pharmaceutical Sciences and Manufacturing, Biovail Corporation (2003-July 2004); Vice President, Global Head, Global Pharmaceutical Sciences, Pharmacia Corporation (2001-2003); Vice President, Pharmaceutical Sciences - U.S., Pharmacia Corporation (1999-2001); Senior Vice President, Development and Operations and Chief Technical Officer, Aronex Pharmaceuticals Inc. (1998-1999).
Geoffrey F. Ide (51)	Corporate Vice President and President, Japan since November 1999; President, Japan (March 1999-October 1999); Vice President Marketing, Vision Care, Europe, Middle East and Africa (1995-March 1999).

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Evon L. Jones (40)	Corporate Vice President and Chief Information Officer since January 2005; Senior Vice President and Chief Information Officer, The Dial Corporation (2001-2004); Senior Vice President and Chief Information Officer, America West Holdings Corporation (1998-2001).
Barbara M. Kelley (58)	Corporate Vice President, Communications and Investor Relations since 2001; Corporate Vice President, Communications (1997-2001).
Jurij Z. Kushner (54)	Corporate Vice President, Controller since 1995.
Brian Levy (52)	Corporate Vice President and Chief Medical Officer since March 2004; Vice President, Clinical & Medical Affairs (2000-March 2004); Vice President, Research & Development (1997-2000).
Angela J. Panzarella (47)	Corporate Vice President, Global Vision Care since October 2001; Corporate Vice President, Investor Relations (1997-2001).
Gary M. Phillips (38)	Corporate Vice President, Global Pharmaceutical since September 2002; Executive Director, Strategic Planning, Novartis Pharmaceuticals (2000-2002); Director, Portfolio Management and Strategic Planning, Wyeth-Ayerst Pharmaceuticals (1999-2000); Managing Consultant, Pharmaceutical Strategy Practice, Towers Perrin (1997-1999).
Efrain Rivera (48)	Corporate Vice President and Treasurer since November 2004; Corporate Vice President and Assistant Treasurer (2003-November 2004); Leave of Absence (January 2003-December 2003); Corporate Vice President and President, Latin America and Canada (2002-Janaury 2003); President, Bausch & Lomb Latin America and General Manager, Bausch & Lomb Mexico (2001-2002); Vice President and Controller, Vision Care (1998-2001).
Kamal K. Sarbadhikari (62)	Corporate Vice President since February 2005; Corporate Vice President, Global Surgical (2002-February 2005); Vice President, Product Commercialization Research, Development & Engineering (2000-2002); Vice President, Engineering, Vision Care (1998-2000).
Henry C. Tung (46)	Corporate Vice President, Global Surgical since February 7, 2005; Vice President, New Business Development, Boston Scientific Corporation (2000-February 2005); Consultant, McKinsey & Company (1998-2000).

     All officers serve on a year-to-year basis through the day of the annual meeting of shareholders of the Company and there is no arrangement or understanding among any of the officers of the Company and any other persons pursuant to which such officer was selected as an officer.

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Part II

Item 5.     Market for Bausch & Lomb Incorporated's Common Stock, Related Shareholder Matters and Issuer Purchases of Equity Securities

The section entitled Dividends as set forth on page 20 in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of this Report on Form 10-K is incorporated herein by reference.
     The table entitled Quarterly Stock Prices (unaudited) as set forth on page 58 in Item 8. Financial Statements and Supplementary Data of this Report on Form 10-K under Note 23 ¾ Quarterly Results, Stock Prices and Selected Financial Data is incorporated herein by reference.

Equity Compensation Plan Information - The following table represents options and restricted shares outstanding under the 1990 and 2001 Stock Incentive Plans, the 2003 Long-Term Incentive Plans and the Annual Retainer Stock Plan for Non-Employee Directors as of December 25, 2004:

Plan Category	Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights	Weighted Average Exercise Price of Outstanding Options, Warrants and Rights	Number of Securities Remaining Available for Future Issuance
Options:
Equity compensation plans    approved by security holders	5,769,9361	$46.01	6,711,968 1
Equity compensation plans not    approved by security holders	750,893	$39.96	- - 2
Total Options	6,520,829	$45.31	6,711,968
Restricted Stock Awards:
Equity compensation plans    approved by security holders	544,370 3
Equity compensation plans not    approved by security holders	38,950		- -
Total Restricted Stock Awards	583,320		- -

1     Represents awards issued under the 1990 Stock Plan and 2003 Long-Term Incentive Plan. Shares remaining available for issuance consist of 6,639,132 shares from the 2003 Plan of which no more than 1,679,502 shares may be issued as grants other than options and SARs and 72,836 shares from the Annual Retainer Stock Plan for Non-Employee Directors. There are no shares available for issuance under the 1990 Plan.
²     The 2001 Stock Incentive Plan was approved by the Board of Directors on January 22, 2001. The Plan provides for an annual pool of shares for grant of options and restricted shares equal to 2% of outstanding shares. Eligible participants include all employees but not officers or directors. Options granted under the Plan have an option price equal to 100% of the fair market value of the stock on the date of grant and a term of ten years. The options typically vest ratably over three years and restricted shares vest 50% after two years and 50% after three years with vesting contingent upon a continued employment relationship with the Company. Effective January 1, 2003, the Board amended this Plan to allow for no further awards under this Plan.
³     Included in this number are performance share awards that were granted under the 1990 Stock Incentive Plan which upon achievement of performance goals may be distributed immediately or deferred under the Restricted Stock Deferred Compensation Plan as elected by the participant. At December 25, 2004, 234,555 shares had been deferred and will be paid out in shares based on the election made by the participant.

Issuer purchases of equity securities

Period	Total Number of Shares Purchased 1	Average Price Paid Per Share	Total Number of Shares Purchased as Part of Publicly Announced Program 2	Maximum Number of Shares that May Yet Be Purchased Under the Program 2
September 26, 2004 - October 23, 2004	1,040	$65.89	-	1,109,000
October 24, 2004 - November 20, 2004	301,632	$59.28	300,000	809,000
November 21, 2004 - December 25, 2004	66,032	$61.73	59,162	749,838
Total	368,704	$59.74	359,162	749,838

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1     Shares purchased during the quarter include purchases pursuant to a publicly announced repurchase program (see footnote 2 below), stock compensation plans and deferred compensation plans.
²     On January 27, 2004, the Board of Directors authorized a program to repurchase up to two million shares of the Company's outstanding Common stock. During the fourth quarter ended December 25, 2004, 359,162 shares were repurchased at an average price of $59.68. There is no expiration date for this program. No other repurchase programs expired or existed during the fourth quarter ended December 25, 2004.

Item 6.     Selected Financial Data

The table entitled Selected Financial Data (unaudited) as set forth on page 59 in Item 8. Financial Statements and Supplementary Data of this Report on Form 10-K under Note 23 ¾ Quarterly Results, Stock Prices and Selected Financial Data is incorporated herein by reference.

Item 7.     Management's Discussion and Analysis of Financial Condition and Results of Operations

Financial Review
Dollar Amounts in Millions - Except Per Share Data

This financial review, which should be read in conjunction with the accompanying financial statements, contains management's discussion and analysis of results of operations, liquidity and 2005 outlook for Bausch & Lomb Incorporated (the Company). Management's discussion and analysis of results of operations includes a non-GAAP constant-currency measure employed by the Company. Management views constant-currency results as a key performance measure of organic business growth trends. The Company monitors its constant-currency performance for non-U.S. operations and the Company as a whole. Constant-currency results are calculated by translating actual current-year and prior-year local currency revenues and expenses at the same predetermined exchange rates. The translated results are then used to determine year-over-year percentage increases or decreases that exclude the impact of currency. In addition, constant-currency results are used by management to assess non-U.S. operations' performance against ye arly targets for the purpose of calculating a portion of the bonus amounts for certain regional bonus-eligible employees.
     References within this financial review to earnings per share refer to diluted earnings per share.

Executive Overview

Bausch & Lomb is a global eye health company, dedicated to perfecting vision and enhancing life for consumers around the world. The Company develops, manufactures and sells soft and rigid gas permeable (RGP) contact lenses and lens care products, ophthalmic pharmaceuticals and products used in ophthalmic surgery. The Company's products are available in more than 100 countries. The Bausch & Lomb name is one of the best known and most respected healthcare brands in the world.
     Because the Company's products are sold worldwide (with approximately 60% of revenues derived in geographies outside the United States), the Company's reported financial results are impacted by fluctuations in foreign currency exchange rates. In the three-year period covered by this report, those impacts have generally provided a positive benefit to reported results as compared to constant-currency results. The Company's translation risk exposures at the revenue line are principally to the euro and the Japanese yen. At the earnings line, the exposures are principally to the yen. In general, the Company does not use financial instruments to hedge translation risk.
     The Company conducts its global business through five business segments. The Company's commercial business segments, responsible for interacting with customers in their respective geographies are the Americas region; the Europe, Middle East and Africa region (Europe) and the Asia region. The Global Supply Chain segment is responsible for manufacturing, distribution and logistics activities for all product categories in all geographies. The Research, Development & Engineering segment has global responsibility across all product categories for product research and development, clinical and medical affairs, as well as regulatory affairs and quality.
     The Company's corporate strategy is to enhance its already strong presence in the estimated $20 billion global eye health market by focusing on:

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- Increasing investment in research and development to yield a robust pipeline of technologically differentiated new products.

- Continuing to enhance the Company's organizational capabilities through the ongoing implementation of disciplined business processes in all areas, particularly sales.

- Further geographic expansion of the Company's key products, especially in under-penetrated markets in Asia.

- Capitalizing on the strength of the Bausch & Lomb brand.

     Management believes the Company's strengths and drivers of future growth include:

- Strong global market positions in contact lens and lens care products, ophthalmic pharmaceuticals and ophthalmic surgery.

- Favorable demographic trends impacting the markets in which the Company's products compete, such as the aging of the population and an increase in the incidence of myopia.

- An organizational infrastructure that provides a significant opportunity to leverage anticipated constant-currency sales growth into higher operating earnings growth for the next several years.

- Continuing focus on faster growing business segments and geographies.

- A strong balance sheet, increased cash flow from operations and available access to capital.

     Despite these strengths, the eye health market is intensely competitive, and is characterized by continuous product development, frequent new product introduction and price competition. The Company is focused on bringing new innovations to the market to sustain its leading positions while improving overall profitability. The Company's success and future growth depend, in part, on its ability to develop products which are more effective in treating conditions of the eye or that incorporate the latest technologies, to efficiently manufacture and effectively market those products and to convince a sufficient number of consumers and eye care practitioners to use them.
     The Company devotes substantial resources to research and development (R&D), and currently holds more than 2,100 patents and has more than 1,500 pending patent applications. The R&D process is expensive, prolonged and entails considerable uncertainty. Because of the complexities and uncertainties associated with ophthalmic R&D, products the Company is currently developing may not complete the development process or obtain the regulatory approvals required to market such products.
     The Company's ability to maintain operating margins may be affected by regulatory activities, particularly for pharmaceutical and surgical products. Further, managed care organizations and governments continue to place increased emphasis on the delivery of more cost-effective medical therapies. Many third-party payers for hospital services have substantially revised their payment methodologies in recent years, resulting in stricter standards for reimbursement of hospital and outpatient charges.
     To offset the potentially negative impact of these items, the Company is intensely focused on improving its manufacturing efficiency and controlling costs. Management believes the profitability improvement initiatives in place since mid-2002 have been successful, and that its infrastructure is capable of supporting a much higher revenue base. The Company has implemented a number of manufacturing initiatives incorporating Lean principles and automation, which have yielded gross margin improvements. The Company's goal also is to manage selling, administrative and general expenses to help support increased levels of R&D spending. Together, these activities are designed to further increase operating margins in the future.

Financial Overview

The Company reported net income of $160 or $2.93 per share for the year ended December 25, 2004, compared to 2003 net income of $126 or $2.34 per share and 2002 net income of $73 or $1.34 per share. Net income for the year ended December 27, 2003 includes a charge of $1 or $0.02 per share as a cumulative change in accounting principle related to the adoption of Statement of Financial Accounting Standards (SFAS) No. 143 on December 29, 2002, as described in Note 19 ¾ Supplemental Balance Sheet Information. A reconciliation of net income and earnings per share to income and earnings per share before cumulative effect of change in accounting principle is presented below:

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	2004		2003		2002
	Amount	Per Share	Amount	Per Share	Amount	Per Share
Net income	$159.6	$2.93	$125.5	$2.34	$72.5	$1.34
Cumulative effect of change in accounting    principle, net of taxes, due to adoption of    SFAS No. 143	- -	- -	0.9	0.02	- -	- -
Income before cumulative effect of change in    accounting principle	$159.6	$2.93	$126.4	$2.36	$72.5	$1.34
Average Shares Outstanding - Diluted (000s)		54,504		53,519		53,997

     The Company's results for 2003 and 2002 were impacted by several significant events, summarized below. There were no significant events impacting 2004 results.
     During the fourth quarter of 2003, foreign currency income of $7 before taxes was realized upon the liquidation of certain non-U.S. subsidiaries as part of the Company's ongoing effort to simplify its legal entity structure and reduce overhead costs. The Company also recorded a $6 pre-tax reversal in severance-related restructuring charges as certain anticipated termination actions and plant closures did not occur due to an increased demand for certain product lines. All actions related to this restructuring plan were completed by the end of 2003. Also during the fourth quarter of 2003, R&D expense of $6 before taxes was recorded associated with the acquisition of an early-stage pharmaceutical technology the Company had previously been developing with a third-party partner. The 2003 significant items, excluding a $1 loss on the adoption of SFAS No. 143, already reflected in net income, aggregated to contribute a net after-tax increase of $5 or $0.09 per share.
     Restructuring charges and asset write-offs recorded during 2002 include $26 before taxes related to the profitability improvement plan announced and recorded during the third quarter of 2002, as well as severance associated with the transfer of PureVision contact lens manufacturing from the U.S. to Ireland as a result of a ruling against the Company in a U.S. patent lawsuit. Restructuring charges and asset write-offs also included $24 before taxes recorded during the first quarter of 2002 related to the second phase of a 2001 restructuring program designed to reduce ongoing operating costs. Additionally, a $1 pre-tax reversal of previously recorded restructuring charges related to the 2001 program was recorded during the third quarter of 2002. Pre-tax gains on the sale of the Company's remaining equity interest in Charles River Laboratories, Inc. of $28 were realized in the first quarter of 2002. Finally, during 2002, an outside partner exercised its put right for all of its partnership interest and the Company recorded a one-time early liquidation premium, which was recorded as an after-tax minority interest charge of $7. The 2002 significant items reduced net income by $21 or $0.39 per share.

Net Sales and Income by Business Segment and Geographic Region

Total Company net sales in 2004 increased 11% from 2003 and increased 6% in constant currency. Total Company net sales in 2003 increased 11% from 2002 or 4% in constant currency.

Geographic Region Net sales in markets outside the U.S. totaled $1,373 in 2004, an increase of $164 or 14% (6% excluding the impact of currency) over the prior year. In 2003, non-U.S. sales were $1,208 compared to $1,055 in 2002, an increase of $153 or 15%. Excluding the impact of currency, 2003 net sales outside the U.S. increased 3%. Net sales outside the U.S. represented approximately 61%, 60% and 58% of consolidated net sales in 2004, 2003 and 2002, respectively.
     Net U.S. sales totaled $860 in 2004, an increase of $49 or 6% over 2003. Net U.S. sales totaled $811 in 2003 compared to $762 in the prior year, an increase of $49 or 6%. Net U.S. sales represented approximately 39%, 40% and 42% of consolidated net sales for 2004, 2003 and 2002, respectively, with U.S. revenues representing approximately 90% of the Americas segment revenue in each year.

Business Segment The Company's segments are the Americas region; the Europe, Middle East and Africa region (Europe); the Asia region; the Research, Development & Engineering organization and the Global Supply Chain organization. In each geographic segment, the Company markets products in five product categories: contact lens, lens care, pharmaceuticals, cataract and vitreoretinal, and refractive. The contact lens category includes traditional, planned replacement disposable, daily disposable, multifocal, continuous wear and toric soft lenses and rigid gas permeable lenses and materials. The lens care category includes multi-purpose solutions, enzyme cleaners and saline solutions. The pharmaceuticals category includes generic and proprietary prescription ophthalmic drugs, ocular vitamins, over-the-counter medications and vision accessories. The cataract and vitreoretinal category includes intraocular lenses, phacoemulsification equipment and related disposable products, and viscoelastics and oth er products used in cataract and vitreoretinal surgery. The refractive category includes lasers, microkeratomes, diagnostic equipment and other products and equipment used in refractive surgery. There are no transfers of products between product categories.

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     Operating income is the primary measure of segment income. Segment income excludes the significant items noted in the Financial Overview. The following table summarizes net sales and operating income by segment and presents total company operating income:

	2004			2003		2002
	As Reported	Percent of Total Net Sales	As Reported		Percent of Total Net Sales	As Reported	Percent of Total Net Sales
Net Sales
Americas	$   955.5	43%	$   901.3		45%	$   844.1	46%
Europe	819.9	37%	723.2		36%	613.1	34%
Asia	456.9	20%	395.0		19%	359.5	20%
	$2,232.3		$2,019.5			$1,816.7
Operating Income (Costs)
Americas	$   322.1		$   284.2			$   247.9
Europe	251.0		202.1			154.9
Asia	129.8		108.3			106.4
Research, Development &    Engineering	(190.6)		(174.8)			(145.2)
Global Supply Chain	(149.3)		(116.7)			(107.2)
Segment Income	$   363.0		$   303.1			$   256.8
Corporate administration 1	(83.4)		(68.2)			(58.1)
Restructuring reversals    (charges) and asset    write-offs 2	-		6.3			(49.0)
Other significant charges 3	-		(5.6)			-
Operating Income	$   279.6		$   235.6			$   149.7

1     Corporate administration expenses are discussed in Operating Costs and Expenses.
²     Income (expenses) associated with certain restructuring plans as described in Restructuring Charges and Asset Write-offs.
³     Other significant charges in 2003 pertain to R&D expense associated with the acquisition of an early-stage pharmaceutical technology.

2004 Versus 2003 Each of the Company's geographic regions experienced growth on a constant-currency basis during 2004 in the lens, pharmaceuticals, cataract and vitreoretinal, and refractive product categories. Sales of contact lenses increased 8% excluding currency effects, with strong revenue increases reported for the SofLens66 Toric, SofLens One Day, SofLens Multi-Focal and SofLens59 contact lens products, as well as the PureVision line of contact lenses. Combined, these products represented more than 50% of contact lens revenues and grew almost 30% during 2004, benefiting from continued market expansion and share gains. Lens care sales were up 2% on a constant-currency basis. The Americas and Asia regions experienced lens care constant-currency growth during 2004 while lens care performance was flat in Europe. Those were encouraging results given overall lens care market dynamics. The pharmaceuticals category growth was mainly attributable to the continued market success and geographic expansion of the Ocuvite PreserVision and other Ocuvite lines of ocular vitamins. Strong gains were also noted in the Americas region for Lotemax and Alrex, the Company's lines of prescription steroid eye drops. In Europe, pharmaceuticals category growth was tempered by the continued impact of government pharmaceuticals pricing legislation in Germany. Higher sales of cataract and vitreoretinal surgery products reflected high single digit constant-currency gains for intraocular lenses (IOLs). Growth in the SofPort and Akreos lines of IOLs more than offset declines for older technology products. Constant-currency growth was also recorded for phacoemulsification products. Constant-currency growth in refractive surgery revenue was primarily attributable to higher sales of per-procedure cards and microkeratome blades.

2003 Versus 2002 On a constant-currency basis, each geographic segment experienced growth in the contact lens and pharmaceutical product categories during 2003. Growth in contact lens net sales was attributed to gains in the Company's planned replacement and disposable and rigid gas permeable lenses which more than offset declines in traditional modalities. Growth within the pharmaceuticals product category reflected continued success of the Company's lines of ocular vitamins. In the lens care category, constant-currency net sales gains in the Americas and Asia offset modest declines in Europe, with overall growth resulting from gains in the ReNu brand of multi-purpose solutions. Constant-currency cataract and vitreoretinal surgery revenue

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increases in Europe offset declines in the Americas and Asia. Double-digit growth in constant-currency refractive surgery revenue in the Americas was more than offset by declines in Europe and Asia. Higher sales of per-procedure cards were noted in each geographic segment with more-than-offsetting declines in other refractive product offerings in the Europe and Asia regions.
     The following three sections entitled Americas, Europe and Asia describe year-over-year net sales results by product category for 2004 and 2003 in each geographic segment.

Americas
2004 Versus 2003 The Americas segment's net sales were $956 for 2004, a 6% increase in both actual dollars and in constant currency over 2003. The segment experienced gains in all product categories in 2004.
     Contact Lens - In the Americas segment, contact lens revenues increased 8% and 7% in actual dollars and in constant currency, respectively, compared to 2003. This growth was led by both SofLens Multi-Focal and SofLens66 Toric contact lenses, which continue to maintain their strong leadership positions in the Americas. SofLens Multi-Focal lens sales almost doubled. The product remains the number one dispensed multifocal contact lens in the U.S., with a market share of approximately 40%. SofLens66 Toric contact lens revenues grew slightly less than 20% and, according to the most recent market data, the lens achieved an all-time high share of patient fits in 2004. The solid performance of SofLens Multi-Focal and SofLens66 Toric contact lenses was somewhat tempered by weakness in U.S. two-week disposable SVS products, where more doctors are fitting patients with competitive silicone hydrogel offerings. The Company believes that th e 2005 re-introduction of its PureVision lenses in the U.S., resulting from a final settlement of patent litigation regarding the PureVision lenses in July 2004, will help the Company regain share in the SVS category. The Company will continue to make additional capital investments in 2005 to increase manufacturing capacity for this re-introduction.
     Lens Care - Lens care net sales in the Americas increased 1% in both actual dollars and in constant currency. The Company continues to maintain its leading market position in the U.S. lens care market in both multi-purpose and rigid gas permeable solutions. Additionally, the Company introduced its next-generation product, ReNu with MoistureLoc solution in the third quarter of 2004. This newly patented solution provides sustained comfort. It is the first multi-purpose product with a labeling claim approved by the FDA that it may improve comfort for patients experiencing contact lens dryness, which is a leading cause of discontinued lens wear.
     Pharmaceuticals - Pharmaceutical net sales for the Americas segment experienced 11% growth in 2004 in both actual dollars and in constant currency. Strong sales growth in ocular nutritionals, proprietary pharmaceuticals and multisource products contributed to the overall increase. The Company's ocular vitamin franchise posted growth of more than 20% in 2004, with the Ocuvite PreserVision brand up more than 40%. Late in the third quarter, the Company introduced an easy-to-swallow soft gel version of the original AREDS formula, as well as a line extension containing lutein instead of beta carotene. The Company believes the soft gel versions will help increase patient compliance with the recommended dosage, and grow the user base. In proprietary pharmaceuticals, both Alrex and Lotemax, the Company's prescription eye drops containing loteprednol etabonate, posted sales growth in excess of 25% in 2004, reflecting an increase in prescripti ons written for both products. The Company believes these results are attributable to an increased emphasis on the loteprednol etabonate portfolio by the Company's dedicated pharmaceuticals sales force in advance of the January 2005 launch of Zylet ophthalmic suspension (a combination of loteprednol etabonate and tobramycin), and to the increased visibility of the products in podium presentations and professional publications.
     Cataract and Vitreoretinal - In the Americas segment, cataract and vitreoretinal sales increased 2% and 1% in actual dollars and in constant currency, respectively. The increases were led by higher IOL sales in 2004 of about 10%. Growth in sales of the Company's silicone IOL products, most notably the SofPort brand, were even stronger, at more than 20%. In October 2004, the Company launched its newest IOL innovation, SofPort AO. This is the first IOL in the U.S. with an aberration-free design. The Company believes that doctors have recognized that this lens can provide their patients with exceptional optical performance and the potential for improved contrast sensitivity post surgery. The gains in IOL revenues were partially offset by lower revenues for phacoemulsification products.
     Refractive - Americas region refractive net sales increased 15% in 2004 in actual dollars and 14% in constant currency, despite a decline in net sales in the 2004 fourth quarter as compared to the same 2003 period. The growth in 2004 reflected incremental sales of U.S. equipment and higher margin per-procedure cards associated with the Company's Zyoptix system for customized LASIK surgery. Other factors were sales increases of more than 50% for standard LASIK procedure cards, as well as a greater than 10% increase in microkeratome blade volume. The 2003 fourth quarter included revenues associated with the significant number of lasers placed immediately following the fourth-quarter launch of the Zyoptix system in the United States.

2003 Versus 2002 The Americas segment's net sales were $901 for 2003 or a 7% increase (6% in constant currency) over 2002. The segment experienced gains in each product category with the exception of a slight decline in the cataract and vitreoretinal product category.
     Contact Lens - In the Americas segment, contact lens revenues increased 3% and 2% in actual dollars and in constant currency, respectively, compared to 2002. This growth was mainly attributable to sales of the SofLens66 Toric contact lens, which continued

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to hold its market-leading position, and incremental sales of the SofLens Multi-Focal contact lens, which was introduced in the fourth quarter of 2002 and quickly became the number one prescribed multifocal lens in the U.S. These gains more than offset the absence of U.S. PureVision contact lens sales in 2003 after a court ordered discontinuance of PureVision contact lens sales in the U.S. in June 2002. Excluding revenues from PureVision contact lenses in 2002, contact lens sales increased 10% in constant currency during 2003.
     Lens Care - Lens care net sales in the Americas increased 5% in both actual dollars and in constant currency. This growth reflected the continued strength of the Company's ReNu brand of lens care products. The Company increased its U.S. market share position in 2003 as evidenced by fourth-quarter independent syndicated market survey information, combined with inventory data available from warehouse clubs and a large retail outlet which indicated consumption had surpassed the Company's rate of shipment.
     Pharmaceuticals - The Americas segment experienced 16% growth in pharmaceutical net sales during 2003 over 2002 in both actual dollars and in constant currency. This growth was fueled by strong sales of multisource pharmaceutical products and ocular vitamins. In the multisource product line, higher sales under government contracts and incremental sales from the Company's launch of brimonidine, a generic version of Alphagan, were partially offset by reduced sales of generic otic products. In the Company's lines of ocular vitamins, Ocuvite PreserVision continued to post strong results. The Company's U.S. market share held at more than 70%, a position that was strengthened during the fourth quarter of 2003 when the Company was granted patent protection around the formula and method of manufacture for Ocuvite PreserVision ocular vitamins. These growth trends were slightly offset by lower sales within the proprietary portfolio, particularly for the Lote max brand, where third- and fourth-quarter 2002 revenues benefited from wholesalers' buying in advance of an anticipated price increase.
     Cataract and Vitreoretinal - Net sales of cataract and vitreoretinal products were essentially flat in actual dollars and down 1% excluding currency versus the prior year. Gains in instruments and vitreoretinal products were offset by declines in revenues from phacoemulsification products and viscoelastics. Full-year declines were also noted in IOL revenues, but these trends reversed during the fourth quarter of 2003, when IOL revenues increased for the first time in more than two years. The fourth-quarter increase was driven by the steady growth of the Company's silicone franchise, predominately the SofPort system launched earlier in 2003, which more than offset the effect of the Company's PMMA IOL rationalization efforts.
     Refractive - The Americas segment posted strong growth in this category as refractive net sales increased 12% in 2003 in actual dollars and 10% in constant currency. Year-to-date increases were led by fourth-quarter gains in excess of 50% that were attributable to the demand for the Company's Zyoptix system, which received FDA approval in the U.S. during the fourth quarter. Laser card revenues were also up significantly for both Zyoptix system and standard LASIK procedures. The region also experienced growth in net sales of other laser parts and service.

Europe
2004 Versus 2003 Net sales in the Europe segment increased 13%. Excluding the impact of currency, net sales increased 4% compared to the prior year. The segment experienced gains in all product categories except lens care where performance was flat.
     Contact Lens - Contact lens net sales in the Europe region increased 15% in 2004 compared to 2003 (5% in constant currency). This growth was primarily driven by the continued strength and market leading positions for SofLens66 Toric and SofLens Multi-Focal lenses as well as continued growth for the PureVision family of contact lenses. The PureVision lens franchise grew over 20% in 2004, benefiting from the introduction of PureVision Toric lenses in May and strong growth in the PureVision SVS line. Feedback from eye care practitioners about PureVision Toric lenses has been extremely positive.
     Lens Care - In Europe, lens care product net sales increased 9% in actual dollars and were flat on a constant-currency basis compared to 2003. The overall European lens care market had experienced declines through the third quarter, primarily related to older technology regimens. ReNu with MoistureLoc solution was launched in limited markets during the third quarter and by the end of the fourth quarter, the product was available in all major markets in the region. Sales of the ReNu line of multi-purpose solutions grew approximately 20% in the fourth quarter over the prior year fourth quarter. The Company believes the fourth-quarter lens care improvement was a result of strong market acceptance of ReNu with MoistureLoc solution as evidenced by positive feedback from practitioners and their patients.
     Pharmaceuticals - Pharmaceuticals net sales for the Europe segment increased 12% in actual dollars and 2% in constant currency, with increases in most markets in the region. Overall, sales of ocular vitamins, anti-infective and anti-inflammatory products throughout Europe reported constant-currency gains for the year. Growth was led by ocular nutritional products, including Ocuvite and Ocuvite PreserVision, plus two other products containing Omega-3 and Omega-6 fatty acids which target age-related macular degeneration and dry eye, respectively. This growth was somewhat offset by general sales declines for most other product categories in Germany, where government pharmaceuticals pricing and reimbursement legislation negatively impacted revenues.
     Cataract and Vitreoretinal - European cataract and vitreoretinal net sales grew 16% and 6% for the year in actual dollars and on a constant-currency basis, respectively. These increases mainly reflect higher sales of phacoemulsification products and IOLs. The Akreos acrylic IOL was the Company's leading IOL product in Europe, with year-over-year sales gains in excess of 30%. IOL sales in total were up 2% reflecting the continuing trend among European surgeons to use more advanced designs and foldable

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materials rather than PMMA IOLs. Sales of phacoemulsification products increased approximately 10% for the year.
     Refractive - Refractive sales in the Europe region grew 18% in 2004 (9% in constant currency) compared to 2003. This growth reflected higher revenues from Zyoptix system upgrades, per-procedure cards, diagnostic equipment and microkeratome blades.

2003 Versus 2002 Net sales in the Europe segment increased 18%. Excluding the impact of currency, net sales increased 2% compared to the prior year. The segment experienced gains in contact lens, pharmaceutical, and cataract and vitreoretinal net sales on a constant-currency basis. These gains were partially offset by declines in the lens care and refractive product categories.
     Contact Lens - Contact lens net sales in the Europe segment increased 22% in 2003 compared to 2002 (6% in constant currency). These increases reflected strong gains for planned replacement and disposable offerings, particularly SofLens66 Toric, and incremental revenues from SofLens Multi-Focal contact lenses. The SofLens66 Toric brand maintained its number one position in the region. The SofLens Multi-Focal lens received an enthusiastic response from doctors and patients, and captured over 20% of the European multifocal market in its introductory year. Full-year gains were also noted for PureVision contact lenses.
     Lens Care - In Europe, lens care product net sales increased 8% over 2002, but declined 6% in constant currency. The decline reflected the Company's 2002 decision to exit certain non-strategic and low margin lines of lens care products acquired as part of the Woehlk acquisition in October 2000.
    Pharmaceuticals - Pharmaceuticals net sales for the Europe segment increased 20% in actual dollars but only 1% in constant currency. The overall growth reflected increased distribution for ocular vitamins, including Ocuvite PreserVision and other Ocuvite products, which were launched in additional European markets throughout the year. In Germany, constant-currency revenue gains were experienced for both prescription and OTC products. This was partially attributable to wholesalers stocking up on products during the fourth quarter in anticipation of government-mandated pricing programs which took effect in 2004 and resulted in more expensive generic drugs. Sales in France posted growth from increased sales of glaucoma products, including a long-acting version of Carteol launched early in 2003. These full-year increases were in large part offset by the impact from the Company's decision in the second half of 2002 to exit certain non-strategic product li nes acquired with the Groupe Chauvin acquisition in 2000.
     Cataract and Vitreoretinal - European cataract and vitreoretinal sales posted increases of 25% and 9% in 2003 in actual dollars and on a constant-currency basis, respectively. Across the region, this growth was driven by higher sales of IOLs, most notably the Akreos acrylic lens. Higher sales of phacoemulsification products also contributed to this growth. Spain continued to make a contribution to growth in this product category as the Company is now selling direct in that market as a result of its acquisition of a cataract distributor in September 2002.
     Refractive - Refractive sales in the Europe region were down 2% in 2003 or 15% in constant currency, compared to 2002. Higher sales of Zyoptix cards, service revenue and an increase in laser sales in the fourth quarter, spurred by the launch of the Company's Technolas z100 laser, were more than offset by declines in most other refractive product lines. Market conditions remained subdued across much of the region throughout 2003, with most countries reporting flat to declining procedure volumes. In spite of this, the Company continued to experience an increase in the number of Zyoptix cards sold.

Asia
2004 Versus 2003 Net sales in the Asia segment increased 16%. Excluding the impact of currency, net sales increased 11% compared to the prior year. The segment experienced gains in all product categories in 2004.
     Contact Lens - The Asia segment's contact lens net sales increased 19% (13% in constant currency) in 2004 due to strong performance in most markets in the region, especially Japan. In Japan, constant-currency sales were up approximately 13%, reflecting the launch of Medalist One Day contact lenses in the first half of 2004 as well as continued strong sales growth for the Company's disposable toric contact lens product. Distribution of Medalist One Day lenses continued to expand in the fourth quarter. The Company also continued to maintain a share of more than 50% of the Japanese disposable toric contact lens market in 2004. The rest of Asia experienced constant-currency gains approximating 14% during 2004, primarily led by China.
     Lens Care - In Asia, revenues for the year increased 9% in actual dollars and 5% in constant currency mainly on the strength of multi-purpose solutions, which grew 8% for the year. The Company launched ReNu with MoistureLoc solution in Hong Kong, Singapore and Malaysia during the fourth quarter and the Company believes the response from the trade was very encouraging. The Company plans to launch ReNu with MoistureLoc solution in other key markets in Asia as regulatory approvals are received. Older generation multi-purpose solutions continued to perform well in 2004, particularly in China, where the Company continues to be the market leader, and Japan.
     Pharmaceuticals - The Company's pharmaceutical product category is primarily focused in the Americas and Europe regions. Net sales of pharmaceuticals in Asia were immaterial to its overall results of operations for 2004 and 2003. The Company continues to expand and introduce its pharmaceutical products in this region, particularly its vitamin franchise.
     Cataract and Vitreoretinal - Revenue from the cataract and vitreoretinal product category in Asia increased 16% (11% in constant currency) in 2004, reflecting growth in markets outside of Japan. Those markets experienced strong sales in the SofPort and Akreos lines of IOLs. The Company also expanded its installed base of Millennium systems, particularly in the developing markets of China and India, which resulted in higher sales of phacoemulsification products and viscoelastics in the region.

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     Refractive - Refractive net sales in Asia increased 7% (5% excluding the impact of currency) in 2004. Increased revenues from Zyoptix system upgrades, per-procedure cards and microkeratome blades reflected an increase in Zyoptix system penetration and increased laser utilization in the region. These gains were somewhat offset by a decrease in new laser placements as compared to the prior year, reflecting the launch of the Technolas z100 laser in 2003.

2003 Versus 2002 The Asia segment's net sales for 2003 increased 10% (4% in constant currency) compared to the prior year. The segment experienced growth in contact lenses and lens care in both actual dollars and in constant currency. These gains were partially offset by declines in the surgical category.
     Contact Lens - The Asia segment's contact lens net sales increased 13% (7% in constant currency). This performance largely reflected sales increases in Japan and China. In Japan, Medalist Toric lenses continued to gain share and registered significant year-on-year revenue increases, while in China, the Company's lens franchise posted healthy growth in 2003 despite the impact of SARS early in the year.
     Lens Care - In Asia, lens care revenue increased 11% and 6% in actual dollars and in constant currency, respectively, led by the strength of the Company's ReNu brand which continued to lead the lens care market in the region. This position was bolstered through direct-to-consumer messaging about the benefits of chemical disinfectants in several key geographies during 2003.
     Pharmaceuticals - The Company continued to expand and introduce its pharmaceutical products in this region, particularly its vitamin franchise. Net sales of pharmaceuticals in Asia were immaterial to its overall results of operations in 2003 and 2002.
     Cataract and Vitreoretinal - Sales of the cataract and vitreoretinal product category in Asia was down 2% compared to 2002. Excluding the impact of currency, sales decreased 8%. Declines were mainly attributable to Japan, which more than offset constant-currency growth in other markets in the region. The Company's Japanese cataract category continued to be impacted by a loss of share in IOLs, caused by a lack of a competitive foldable offering in the fastest growing market segment. The Company does not expect Japanese approval of its Akreos IOL in the short term, and continues to focus on the remainder of the IOL portfolio as well as its lines of phacoemulsification equipment and supplies, while working to reduce cost and exploring opportunities to accelerate new regulatory applications currently on file.
     Refractive - Refractive net sales in Asia declined 4% and excluding the impact of currency, declined 7%. Higher sales of lasers, largely due to the launch of the premium-priced Technolas z100 laser, per-procedure cards and other laser parts and services were more than offset by declines in microkeratomes and related refractive products.

     The following table presents total Company net sales by product categories for the years 2004, 2003 and 2002:

	Net Sales	Percent Increase (Decrease) Actual Dollars	Percent Increase (Decrease) Constant Currency
2004
Contact Lens	$   675.2	14%	8%
Lens Care	521.9	5%	2%
Pharmaceuticals	524.7	12%	7%
Cataract and Vitreoretinal	358.3	9%	4%
Refractive	152.2	14%	10%
	$2,232.3	11%	6%
2003
Contact Lens	$   591.8	13%	5%
Lens Care	498.9	7%	3%
Pharmaceuticals	467.9	18%	9%
Cataract and Vitreoretinal	327.9	9%	2%
Refractive	133.0	3%	(3%)
	$2,019.5	11%	4%
2002
Contact Lens	$   523.9	13%	12%
Lens Care	465.5	12%	11%
Pharmaceuticals	396.1	15%	14%
Cataract and Vitreoretinal	301.8	(1%)	(2%)
Refractive	129.4	(6%)	(7%)
	$1,816.7	9%	8%

Page 15

Segment Income Segment income excludes certain significant items such as restructuring charges and reversals, asset write-offs and other significant charges, as well as corporate administration expenses.

2004 Versus 2003 In 2004, segment income increased $60 or 20% as compared to the prior year. Increases in sales of higher margin products (including cataract and vitreoretinal, contact lenses and proprietary pharmaceuticals and ocular nutritionals in the Americas) were experienced by all commercial segments. Continued manufacturing cost savings initiatives, ongoing administrative savings realized through the Company's profitability improvement programs and changes in foreign currency exchange rates also contributed to improved profitability. The 2004 growth was somewhat offset by increased marketing and advertising costs primarily associated with new product launches and increased information technology (IT) expense associated with the Company's global systems integration project.
     Research, Development & Engineering segment operating costs increased $16 or 9% in 2004 in support of the Company's R&D spending commitment toward new products and the development of additional treatments for sight-threatening diseases. Global Supply Chain segment operating costs increased $33 or 28% from 2003 primarily due to changes in foreign currency, partially offset by cost savings realized through restructuring actions and manufacturing initiatives incorporating Lean principles and automation.

2003 Versus 2002 In 2003, segment income increased $46 or 18% as compared to the prior year. Increases experienced by all commercial segments in sales of higher margin contact lenses and growth in the lens care category, as well as sales growth achieved by the Company's multisource pharmaceutical products and ocular vitamins in the Americas region, were the main factors driving this growth. Changes in foreign currency exchange rates, manufacturing cost savings initiatives, and administrative savings realized through restructuring actions, also contributed to the gain in segment income.
     Research, Development & Engineering segment operating costs increased $30 or 20% in 2003 in support of the Company's R&D spending commitment toward new products. Global Supply Chain segment operating costs increased $10 or 9% from 2002 primarily due to changes in foreign currency, partially offset by cost savings realized through restructuring actions and the absence of certain costs previously absorbed by the Global Supply Chain segment which were determined to be costs more appropriately associated with the operations of the commercial segments. In addition, certain expenses were recorded in 2002 associated with the transfer of PureVision contact lens manufacturing from the U.S. to Ireland and obsolescence charges related to certain lines of IOLs.

Operating Costs and Expenses

The ratio of cost of products sold to sales was 41.9%, 42.5% and 43.9% in 2004, 2003 and 2002, respectively. The gross margin improvement in 2004 was driven by a favorable sales mix shift toward higher margin products, particularly in the Company's cataract and vitreoretinal, contact lens and proprietary pharmaceuticals and ocular nutritionals product lines in the Americas, and ongoing cost savings generated by profitability improvement programs. The 2003 improvement in gross margin reflected cost savings from the Company's profitability improvement programs as well as a favorable mix shift toward contact lens and lens care product lines. In addition, currency had a positive impact on gross margin during 2004 compared to a negative impact during 2003.
     Selling, administrative and general expenses, including corporate administration, as a percent of sales were 38.3%, 38.7% and 38.1% in 2004, 2003 and 2002, respectively. Spending increased $73 during 2004 when compared to 2003 and $89 during 2003 when compared to 2002. The 2004 expenses reflected the impact of foreign currency exchange rates, higher investments in marketing and advertising, primarily associated with new product launches, increased IT expense in connection with the Company's global systems integration project, Sarbanes-Oxley compliance costs and higher expenses associated with performance-based compensation plans and other employee benefit program expenses. The increase in 2003 was largely due to higher marketing and selling expenses, higher expense associated with performance-based compensation plans and other employee benefit program expenses, and a valuation reserve recorded against amounts advanced to Control Delivery Systems (CDS) under a strategic partnersh ip arrangement (see Note 7 ¾ Related Party Transaction).
     R&D expenses totaled $163, $150 and $128 in 2004, 2003 and 2002, respectively and represented 7.3%, 7.4% and 7.1% of sales in 2004, 2003 and 2002, respectively. A charge of $6 associated with the acquisition of an early-stage pharmaceutical technology contributed to the 2003 increase.The Company will continue its commitment to R&D spending in support of its goal of consistently bringing new products to market to fuel long-term growth, including its continued investments to develop additional treatments for sight-threatening diseases.

Page 16

Non-Operating Income and Expense

Other Income and Expense Interest and investment income was $14 in 2004, $16 in 2003 and $45 in 2002. Mark-to-market adjustments on assets held by the Company for its nonqualified deferred compensation plan represent the majority of the $2 decrease in 2004 when compared to 2003. The $29 decrease in 2003 was primarily attributable to a gain of $28 from the sale of Charles River Laboratories stock and interest income of approximately $9 associated with income tax refunds recorded in 2002, partially offset by mark-to-market gains on assets held for the Company's nonqualified deferred compensation plan.
     Interest expense was $48 in 2004 and $54 in both 2003 and 2002. As explained in Note 11 ¾ Accounting for Derivatives and Hedging Activities, the Company decided to permanently invest an intercompany loan in its Europe region during the quarter ended September 27, 2003. The intercompany loan was previously hedged by forward foreign exchange contracts classified as cash flow hedges. The 2004 decline resulted primarily from the termination of these cash flow hedges, although lower average debt levels and interest rates were also factors. Interest expense remained flat in 2003 when compared to 2002 despite lower average debt levels and interest rates due to the Company's November 2002 debt issuance. The 2002 debt was used in part to refinance existing debt obligations, including the Company's $200 minority interest obligation as described in Note 15 ¾ Minority Interest. Expense associated with the minority interest obligation was recorded as minority interest expense through May 2002.
     Foreign currency represented a net gain of $2 in 2004, a net loss of less than $1 in 2003 and a net loss of $4 in 2002. The 2004 net gain reflects higher foreign currency translation gains. During 2003, the Company liquidated three non-U.S. subsidiaries resulting in a $7 net gain. The liquidations were part of the Company's ongoing effort to simplify its legal entity structure and reduce overhead cost. The gain was offset by hedging expenses from the Company's foreign exchange hedging program. The 2002 loss was primarily due to hedging expenses.

Income Taxes The Company's reported tax rate for continuing operations was 33.5% in 2004 and excluded the impact of any cash repatriation under the American Jobs Creation Act (see the discussion on the American Jobs Creation Act in Note 9 ¾ Provision for Income Taxes). The tax rate for continuing operations was 34.0% in 2003 and 34.5% in 2002.
     When calculating income tax expense, the Company recognizes valuation allowances for tax loss and credit carryforwards, which may not be realized utilizing a "more likely than not" approach which is more fully described in Note 9 ¾ Provision for Income Taxes.

Minority Interest The impact to results of operations from minority interest was $5, $4 and $17 for 2004, 2003 and 2002, respectively. See also Note 15 ¾ Minority Interest.

Discontinued Operations During 1999, the Company completed the sale of its eyewear segment to Luxottica Group S.p.A. (Luxottica). During 2000, Luxottica proposed certain purchase price adjustments related to the sale. On January 22, 2002, the Company reached an agreement with Luxottica relative to the proposed adjustments. See also Note 21 ¾ Discontinued Operations.

Restructuring Charges and Asset Write-offs

In 2002 and 2001, the Company's Board of Directors approved plans to restructure certain of the Company's business segments and corporate administrative functions. The Company completed all actions under the Profitability Improvement Program and Transfer of PureVision Contact Lens Manufacturing and the 2001 Program as of December 27, 2003 and December 28, 2002, respectively. These plans are described more fully in Note 20 ¾ Restructuring Charges and Asset Write-offs, and include the Company's programs to enhance its competitive position.

Profitability Improvement Program and Transfer of PureVision Contact Lens Manufacturing In July 2002, the Company announced plans to improve operating profitability through a comprehensive plan, approved by the Company's Board of Directors, which included: plant closures and consolidations; manufacturing efficiencies and yield enhancements; procurement process enhancements; the rationalization of certain contact lens and surgical product lines; distribution initiatives and the development of a global IT platform. These plans included the elimination of approximately 465 jobs worldwide associated with those actions. Restructuring charges and asset write-offs of $23 before taxes associated with these initiatives were recorded in the third quarter of 2002. The Company also recorded a pre-tax amount of $4 during the third quarter of 2002 for severance associated with the elimination of approximately 145 jobs due to the transfer of PureVision extended wear contact lens manufacturing from t he U.S. to Waterford, Ireland as a result of a ruling against the Company in a U.S. patent lawsuit. The after-tax impact of these third-quarter charges was $17 or $0.31 per share. During the fourth quarter of 2003, the Company reversed $6 pre-tax or $0.12 per share, representing remaining reserves that were no longer needed.
     These actions are expected to yield pre-tax cost savings of approximately $90 annually beginning in 2005. These savings are expected to be realized primarily through reduced cost of products sold and selling, administrative and general expenses, and are

Page 17

expected to be partially reinvested into R&D.

2001 Program In December 2001, the Company's Board of Directors approved a comprehensive restructuring plan designed to reduce ongoing operating costs by eliminating approximately 800 jobs on a global basis. During the first quarter of 2002, a pre-tax charge of $24 was recorded for Phase II of the restructuring and additional asset write-offs. The after-tax impact of this charge was $15 or $0.28 per share. During the third quarter of 2002, the Company reversed $1 pre-tax or $0.01 per share, representing remaining reserves that were no longer needed.
     This program yielded pre-tax cost savings of approximately $33 annually. These savings were realized primarily through reduced cost of products sold and selling, administrative and general expenses, a portion of which has been reinvested into R&D, marketing and other programs designed to accelerate sales growth.

Liquidity and Financial Resources

The Company strengthened its capital structure during 2004 and maintained a strong liquidity position. Cash and cash equivalents were $502 and $563 at December 25, 2004 and December 27, 2003, respectively. The decline was primarily attributable to $197 repayment of debt.

Cash Flows from Operating Activities Cash provided by operating activities totaled $281 in 2004, an increase of $33 from 2003. The increase primarily reflected higher earnings and net cash inflows under foreign currency contracts (versus net cash outflows in 2003), partially offset by an increase of $57 in net cash payments for income taxes and an increase in funding of the Company's U.S. pension plan (funding was $18 and $4 in 2004 and 2003, respectively). Days sales outstanding (DSO) were 76 days at the end of 2004, a decrease from 81 days at the end of 2003. The positive trend in DSO demonstrates the Company's continued focus on asset management, particularly in the area of cash collections.
     Cash provided by operating activities totaled $248 in 2003, an increase of $12 from 2002. The increase reflected higher earnings and increased payments received from customers as a result of increased sales in 2003 combined with a reduction in DSO. DSO was 81 days at the end of 2003, a decrease from 85 days at the end of 2002. The overall increase was also impacted by a $22 decrease in cash payments made for severance and other related costs in connection with the Company's restructuring programs (see Note 20 ¾ Restructuring Charges and Asset Write-offs) and a decrease in funding of its U.S. pension plan in 2003. U.S. pension plan funding was $4 and $15 in 2003 and 2002, respectively. The increase in cash provided by operating activities was partially offset by a $36 increase in cash payments for income taxes and higher outflows associated with foreign currency contracts.

Cash Flows from Investing Activities Net cash used in investing activities of $122 in 2004 primarily represented capital expenditures.
     Net cash used in investing activities of $94 in 2003 resulted primarily from capital expenditures of $92 and the acquisition of additional interests in the Company's Korean commercial and manufacturing joint ventures for $6 (as described in Note 5 ¾ Accounting for Goodwill and Intangibles).
     Net cash used in investing activities of $87 in 2002 resulted primarily from capital expenditures of $92, a $23 sale price adjustment payment related to the disposal of a discontinued operation and $6 for the acquisition of a distributorship in Spain (see Note 5 ¾ Accounting for Goodwill and Intangibles), which were partially offset by a cash inflow of $37 from the sale of the Company's remaining equity interest in Charles River Laboratories.

Cash Flows from Financing Activities In 2004 there was a net cash flow use of $225 from financing activities. The 2004 period outflows consisted primarily of $197 repayment of debt, $77 to repurchase 1,250,162 shares of the Company's Common stock at an average price of $61.27 per share and $28 for dividends paid, partially offset by $78 from the exercise of stock options. The repurchase of Company Common stock was part of the Company's publicly announced program, authorized by the Board of Directors on January 27, 2004, to repurchase up to two million Common shares to partially offset the dilutive impact of the anticipated increase in stock option exercise activity due to the appreciation in the Company's stock price during the fourth quarter of 2003.
     Net cash used in financing activities of $80 in 2003 consisted primarily of $202 repayment of debt and notes payable, $41 to repurchase one million shares of the Company's Common stock as described in Access to Financial Markets below, $31 paid in the first quarter of 2003 to settle forward equity contracts as described in Note 18 ¾ Forward Equity Contracts and $28 of dividend payments. The cash outflows from these activities were partially offset by $210 of proceeds from concurrent offerings of notes and convertible notes in August 2003 as described in Note 10 ¾ Debt.
     Cash used in financing activities was $230 in 2002. During the second quarter of 2002, a payment of $200 was made related to the early termination of a minority interest obligation, as described in Note 15 ¾ Minority Interest. Repayments of debt and net

Page 18

repayments of notes payable were $215. Proceeds from issuance of debt were $225. As described in Note 10 ¾ Debt, the Company issued $150 of five-year 6.95% fixed-rate senior notes, the proceeds of which were used for general corporate purposes, including the refinancing of existing debt obligations. The Company also borrowed $75 against its revolving credit agreement during the second quarter of 2002, and repaid that borrowing during the third quarter of 2002, as discussed in Access to Financial Markets below. Dividend payments totaled $42.

Financial Position The Company's total debt, consisting of short- and long-term borrowings, was $644 and $847 at the end of 2004 and 2003, respectively. The ratio of total debt to capital was 31.1% and 41.3% at year-end 2004 and 2003, respectively. Cash and cash equivalents totaled $502 and $563 in 2004 and 2003, respectively.
     Two tranches of the Company's long-term debt due in 2013 and 2015 allowed remarketing agents to call the debt from the holders in 2003 and 2005, respectively, and in certain cases remarket the debt at a higher interest rate than the then current market rate. Following the Company's debt rating being downgraded by Moody's Investors Service during March 2002, the agents exercised their right to put the marketing agreements back to the Company. As a result of this action, a $100 tranche of long-term debt, originally due in 2013, matured and was repaid in 2003, and an additional $100 tranche of long-term debt, originally due in 2015, will mature in 2005.
     The Company believes it has adequate cash, credit facilities and access to financial markets to meet all of its debt maturity requirements.

Contractual Cash Obligations At December 25, 2004, the Company had the following contractual cash obligations due by the following periods:

	Total	Less than 1 Year	1 - 3 Years	3 - 5 Years	More than 5 Years
Contractual Obligations1
Long-term debt obligations	$644	$101	$201	$  -	$342
Purchase obligations2	95	50	27	7	11
Minimum operating lease commitments	79	26	30	14	9
Total	$818	$177	$258	$21	$362

1     The Company had no capital lease obligations at December 25, 2004. The Company's other long-term liabilities consisted primarily of employee benefit plans. (See Critical Accounting Policies for a discussion of the Company's estimated future statutory minimum funding requirements.)
²     Purchase obligations include the Company's minimum obligation to purchase goods and services, or to make royalty payments, under agreements that are enforceable and legally binding. The amounts above include payments due under a utility contract that can be terminated in the tenth year with the payment of $1. If the Company chooses to terminate the utility contract, the total payments due would decrease by $9.

Access to Financial Markets As of December 25, 2004 and December 27, 2003, the Company's long-term debt was rated BBB- by Standard & Poor's and Ba1 by Moody's Investors Service. As of year-end 2004, Standard & Poor's and Moody's Investors Service have described the outlook for the Company as stable. On February 7, 2005, Moody's Investors Service changed the ratings outlook for the Company to positive from stable. On February 17, 2005, Fitch Ratings assigned a rating of BBB to the Company's long-term debt and described the outlook for the Company as stable.
     On March 11, 2002, the Company was downgraded by Moody's Investors Service as a result of its 2001 performance. Due to this downgrade, certain financial transactions became terminable at the option of the holders. These included: an outside investor's limited partnership interest which was recorded as minority interest totaling $200, financing for the Company's World Headquarters facility of $63, and securitized trade receivables of $25. During March 2002, the outside partner exercised its put right for its $200 partnership interest as described in Note 15 ¾ Minority Interest. The termination of the minority interest obligation and payment of the associated early liquidation premium occurred in May 2002. The payment was funded through existing cash reserves as well as the Company's borrowing $75 against its then current syndicated revolving credit agreement, which was repaid in July 2002. In addition, under their original payment terms, outstanding debt related to the securitized trade receivables was paid in March 2002, and the World Headquarters facility was paid by the Company at maturity in December 2002.
     In November 2002, the Company issued $150 of five-year 6.95% fixed-rate senior notes under a $500 Shelf Registration filed with the Securities and Exchange Commission in June 2002. Proceeds from the offering were used for general corporate purposes, including the refinancing of existing debt obligations. In August 2003, the Company issued $210 in concurrent offerings of notes and convertible notes. The first offering was a $50 public offering of five-year fixed-rate senior notes with a coupon rate of 5.90%, also issued under the $500 Shelf Registration ($300 of which remained available for issuance). The Company simultaneously executed an interest rate swap agreement effectively converting the $50 of fixed-rate notes to a variable rate. The effective cost of the notes, including both the impact of the interest rate swap and the settlement of a $50 cash flow hedge designated to hedge the benchmark interest rate in connection with the offering, was 6.09% and 5.75% at December 25, 2004 and December 27, 2003,

Page 19

respectively. The second offering was a $160 placement of variable-rate convertible senior notes due in 2023. The notes accrue interest at six-month LIBOR plus 0.5% with the rate reset on a semiannual basis in advance. The initial interest rate was 1.64%; the coupon rate as of December 25, 2004 was 2.49%. The notes will be convertible into shares of the Company's Common stock under certain conditions, such as when the closing sale price of the Company's Common stock is greater than 120% of the initial conversion price of $61.44 per share for at least 20 trading days in a period of 30 consecutive trading days ending on the last trading day of a calendar quarter. The conversion price represented a 50% premium over the closing price of the Company's Common stock on the date the notes were offered. On October 30, 2003, the Company filed a Registration Statement on Form S-3 with the Securities and Exchange Commission in satisfaction of certain registration rights granted to the holders of the $160 convertible notes. The registration became effective on January 8, 2004. In connection with the sale of the convertible notes, the Company repurchased one million shares of its Common stock during August 2003 at an average price per share of $40.96. The Company used the remaining proceeds of the offerings primarily to refinance existing debt obligations.
     In December 2004, the Company completed its offer to exchange up to $160 of the variable-rate convertible senior notes due in 2023 (Old Notes) for an equal amount of its 2004 Senior Convertible Securities due 2023 (New Securities). The terms of the New Securities are largely consistent with those of the Old Notes except that settlement upon conversion of the New Securities will be paid in cash up to the principal amount of the converted New Securities with any excess of the conversion value settled in shares of the Company's stock. An amount equal to $156 of the Old Notes, or 97% of the outstanding issue, was tendered in exchange for an equal amount of the New Securities.
     In January 2003, the Company entered into a $400 syndicated revolving credit agreement. Under the terms of this agreement, the facility was reduced to $250 effective August 4, 2003 when the Company completed the issuance of $210 of notes and convertible notes. The facility included covenants that require the Company to maintain certain EBITDA to interest and debt ratios. In the event of violation of the covenants, the facility would not be available for borrowing until the covenant provisions were waived, amended or satisfied. There were no covenant violations during 2004 or 2003 and the Company does not anticipate that a violation of these covenants is likely to occur. The interest rate under the agreement is based on the Company's credit rating and, at the Company's option, LIBOR or the base rate of one of the lending banks. There were no outstanding borrowings under syndicated revolving credit agreements as of December 25, 2004 or December 27, 2003. In addition, a number of s ubsidiary companies outside the U.S. have credit facilities to meet their liquidity requirements. There were no outstanding borrowings under these non-U.S. credit facilities as of December 25, 2004 or December 27, 2003.
     The Company believes its existing credit facilities, in conjunction with the financing activities mentioned above, provide adequate liquidity to meet obligations, fund capital expenditures and invest in potential growth opportunities.

Working Capital Working capital and the current ratio were $548 and 1.7, and $545 and 1.6, respectively, at year-end 2004 and 2003.

Dividends Dividends on Common stock, declared and payable quarterly, totaled $0.52 per share for the years ended 2004 and 2003 and $0.65 per share for the year ended 2002. Total cash dividends of $28, $28 and $42 were paid in 2004, 2003 and 2002, respectively. During April 2002, the Board of Directors approved a reduction in the quarterly dividend paid on shares of the Company's Common stock from $0.26 per share to $0.13 per share effective for the quarterly dividend payable July 1, 2002.

Return on Equity and Capital Return on average shareholders' equity was 12.5% in 2004, compared with 11.9% in 2003 and 7.4% in 2002. Return on invested capital was 9.1% in 2004, 8.5% in 2003 and 6.0% in 2002.

Off-Balance Sheet Arrangements

Prior to 2003, the Company had entered into two arrangements with Variable Interest Entities (VIEs) to engage in research, development and commercialization of certain technologies. The Company's interests in these entities qualified for the scope exception from the consolidation requirement of Financial Accounting Standards Board (FASB) Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities-an Interpretation of ARB No. 51.
     The Company has a minority equity interest valued at $0 on its balance sheet, in a VIE that results from a strategic partnering arrangement entered into during 1999 that involves implant technology for treating retinal and other back-of-the-eye diseases. Under the original agreement, the Company remitted payments to the strategic partner for R&D activities and the achievement of certain milestones such as completion of clinical testing, NDA filings and FDA approvals. As described in Note 7 ¾ Related Party Transaction, an anticipated delay of up to three years in U.S. regulatory filings for the Retisert drug delivery product for the diabetic macular edema indication was announced in May 2003. The Company indicated that this delay resulted in a reevaluation of its role in the ongoing development and approval process, and it had decided to conduct and supervise directly the day-to-day development and clinical activities. During the fourth quarter of 2003, the Company renegotiated its arrangement to formalize this

Page 20

change.
     The other arrangement consists of an equity investment of $0.2 as of December 25, 2004 and December 27, 2003 recorded as an other long-term asset, in connection with a licensing agreement signed during 2002 to develop treatments for ocular infections. During the quarter ended June 28, 2003, the Company recorded an other-than-temporary impairment charge of $1.8 based on negative earnings and cash flow trends of the licensor, and inconclusive efforts by the licensor to secure interim financing. The licensing agreement and $4.0 of preferred stock were canceled in December 2003 in conjunction with the Company's decision to invest in and internally develop this ocular infection technology, which is in its early stages. As such, the Company is no longer required to remit payments to the licensor originally due upon the achievement of certain milestones.
     As a result of the renegotiation and license cancellation described above, future payments to the VIEs for R&D activities and milestone achievements over the next five years are estimated to be immaterial.
     The Company has obligations under certain guarantees, letters of credit, indemnifications and other contracts that contingently require the Company to make payments to guaranteed parties upon the occurrence of specified events. The Company believes the likelihood is remote that material payments will be required under theses contingencies, and that they do not pose potential risk to the Company's future liquidity, capital resources and results of operations. See Note 17 ¾ Commitments and Contingencies for further descriptions and discussions regarding the Company's obligations.

Market Risk

The Company, as a result of its global operating and financing activities, is exposed to changes in interest rates and foreign currency exchange rates that may adversely affect its results of operations and financial position. In seeking to minimize the risks and/or costs associated with such activities, the Company manages exposure to changes in interest rates and foreign currency exchange rates primarily through its use of derivatives. The Company does not use financial instruments for trading or other speculative purposes, nor does it use leveraged financial instruments.
     The Company primarily uses forward foreign exchange contracts to hedge foreign currency transactions and equity investments in non-U.S. subsidiaries. For contracts outstanding at the end of 2004, foreign currencies purchased were primarily euros, British pounds, Hong Kong dollars and Swiss francs. Foreign currencies sold were primarily euros, British pounds, Japanese yen, Hong Kong dollars, Korean won and Swiss francs. With respect to 2003, foreign currencies purchased were primarily euros, British pounds, Swiss francs and Hong Kong dollars. Foreign currencies sold were primarily euros, Japanese yen, British pounds and Korean won. The magnitude and nature of the Company's hedging activities are explained further in Note 12 ¾ Financial Instruments. A sensitivity analysis to measure the potential impact that a change in foreign currency exchange rates would have on the Company's net income indicates that, if the U.S. dollar strengthened against all foreign currencies by 10%, the Company would realize a loss of approximately $6 on forward foreign exchange contracts outstanding at year-end 2004. Similar analysis conducted at the end of 2003 indicated that, had the U.S. dollar then strengthened against all foreign currencies by 10%, the Company would have realized a loss of approximately $5 on forward foreign exchange contracts outstanding at year-end 2003. Such losses would be substantially offset by gains from the revaluation or settlement of the underlying positions hedged.
     The Company may enter into interest rate swap, interest rate lock and cap agreements to effectively limit exposure to interest rate movements within the parameters of its interest rate hedging policy. For foreign currency-denominated borrowing and investing transactions, cross-currency interest rate swap contracts may be used, which, in addition to exchanging cash flows derived from interest rates, exchange currencies at both inception and termination of the contract. There were no cross-currency interest rate swap contracts outstanding at December 25, 2004 or December 27, 2003. A sensitivity analysis to measure the potential impact that a change in interest rates would have on the Company's net income indicates that a one-percentage point decrease in interest rates, which represents a greater than 10% change, would increase the Company's net financial expense by approximately $3 and $4 based on 2004 and 2003 year-end positions, respectively.
     Counterparties to the financial instruments discussed above expose the Company to credit risks to the extent of non-performance. The credit ratings of the counterparties, which consist of a diversified group of major financial institutions, are regularly monitored and thus credit loss arising from counterparty non-performance is not anticipated.

Outlook

The Company projects revenue growth of six to seven percent in 2005. The Company's outlook uses a constant-currency measure that translates both revenue and expense plans for 2005 and actual results for 2004 at the same predetermined exchange rates. The actual exchange rates for 2005 may differ from these rates. If the actual exchange rates as of the end of 2004 were to remain in effect for 2005, the Company projects its reported 2005 sales growth would be about two percentage points higher than this projected constant-currency growth. The remainder of the Outlook is presented on a constant-currency basis.

Page 21

     Global contact lens revenues are expected to grow between 10 and 12 percent, benefiting from several product launches throughout the world, including the re-launch of PureVision SVS lens in the U.S. in the second quarter, the continued expansion of the PureVision Toric lens franchise and the introduction of two new lens products in Japan. Japanese regulatory approval was received for Medalist II lenses, the product known as SofLens59 in other markets. The commercial launch of Medalist II lenses is expected in the second quarter. Japanese regulatory approval is also anticipated for a multifocal contact lens in 2005, with a launch later in the year. In the lens care category, the Company is projecting growth of between two and four percent, reflecting the continued roll-out of ReNu with MoistureLoc solution into additional markets and the launch of ReNu MultiPlus solution in Japan anticipated in the second quarter. ReNu MultiPlus will be the only multi-purpose solution in Japan that eliminates the need for a separate weekly enzyme treatment to remove protein deposits. The Company expects the launch of ReNu MultiPlus solution to help increase its overall share position in the multi-purpose segment of the Japanese lens care market. In pharmaceuticals, the Company projects revenues to grow between seven and nine percent. The projections include estimates for Zylet ophthalmic suspension and for expansion of Lotemax ophthalmic eye drop in Europe. They also assume further expansion for nutritional products, including launches for Ocuvite with lutein and Ocuvite PreserVision in Japan, the world's second largest ophthalmic pharmaceuticals market. The Company anticipates receiving the FDA's response to the NDA application made for the Retisert implant for posterior segment uveitis in the spring of 2005 and is targeting a commercial launch of the product in the second half of the year. A n estimate for Retisert implant revenues has also been included in the Company's 2005 guidance. Revenues from the cataract and vitreoretinal category are expected to grow between five and seven percent. Potential growth drivers include the introduction of an advanced optics version of the Akreos IOL outside the U.S., a new easy load inserter for SofPort IOLs and upgrades to the twenty-five-gauge vitrectomy system. Benefits should also come from the continued rollout of SofPort AO IOLs and enhancements to the Millennium microsurgical platform, including the Advanced Flow System module and Custom Control software introduced in the fall of 2004. Lastly, the Company anticipates revenues in the refractive category to grow between three and five percent with the worldwide launch of its new microkeratome with extra precision blades planned for 2005, as well as the introduction of the Technolas z100 laser in the U.S.
     Gross margins for 2005 are expected to improve as a percent of sales, as higher margin new products are introduced and benefits from ongoing cost savings initiatives continue to be realized. Selling, administrative and general expenses are expected to decline as a percentage of sales. R&D spending is expected to again exceed the rate of sales growth in 2005. The above factors should lead to continued improvement in operating margins.
     Net financing expense of between $30 and $32 is projected for 2005. The effective tax rate is expected to decrease from 33.5% to 33.0%, excluding the impact of any cash repatriation under the American Jobs Creation Act (see the discussion on the American Jobs Creation Act in Note 9 ¾ Provision for Income Taxes).
     As a result, the Company expects to generate earnings per share of approximately $3.40. This guidance does not include the impact of repatriating any offshore cash or from the implementation of new FASB rules about stock option expensing (see discussion on SFAS No. 123 (revised 2004), Share-Based Payment in Other Matters; New Accounting Guidance). First-quarter and first-half sales growth rates are expected to be lower than the full-year average, since several product introductions are expected to occur in the second and third quarters of 2005. Earnings per share growth is expected to be at or above the full-year average in the first, third and fourth quarters. Second-quarter earnings per share growth is projected at approximately 10%, reflecting the timing of expenses associated with new product launches.
     Lastly, the Company expects to generate cash flow from operating activities of approximately $270 (excluding the impact of reporting excess tax benefits as financing cash flows as required by SFAS No. 123(R)) as compared to $281 in 2004. Capital expenditures are projected to be approximately $120, essentially flat with 2004.

Critical Accounting Policies

The accompanying consolidated financial statements and notes to consolidated financial statements contain information that is pertinent to management's discussion and analysis of financial condition and results of operations. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses. Actual results may differ from these estimates and assumptions.
     The Company believes that the critical accounting policies discussed below involve additional management judgment due to the sensitivity of the methods, assumptions and estimates necessary in determining the related asset, liability, revenue and expense amounts. The impact and any risks related to these policies on its business operations are discussed below. Senior management has discussed the development and selection of the critical accounting estimates and the related disclosure included herein with the Audit Committee of the Company's Board of Directors.

Revenue Recognition The Company recognizes revenue when it is realized or realizable and earned, based on terms of sale with

Page 22

the customer, generally upon product shipment, product delivery or customer acceptance. During the normal course of business, the Company may offer terms, including extended credit terms, and arrangements that vary by product category, owing to the differing nature of the customers, channels and products across the categories and commercial business segments. The Company believes its revenue recognition policies are appropriate in all circumstances, and that its policies are reflective of complexities arising from customer arrangements. For the sale of multiple-element arrangements whereby equipment is combined with services, including maintenance and training, and other elements, such as supplies, the Company allocates to and recognizes revenue from the various elements based on verifiable objective evidence of fair value. Revisions to these determinants of fair value would affect the timing of revenue allocated to the various elements in the arrangement and would impact the results of operations of the Company. The Company records estimated reductions to revenue for customer incentive programs offered including cash discounts, promotional and advertising allowances, volume discounts, contractual pricing allowances, rebates and specifically established customer product return programs. If market conditions were to change, the Company may take actions to expand these customer offerings, which may result in incremental reductions to revenue. See Note 1 ¾ Accounting Policies for a further discussion of the Company's revenue recognition policy. Reductions to revenues represented approximately 10%, 9% and 11% of gross customer sales in 2004, 2003 and 2002, respectively.

Provisions for Uncollectible Trade Receivables The Company maintains provisions for uncollectible accounts for estimated losses resulting from the inability of its customers to remit payments. If the financial condition of customers were to deteriorate, thereby resulting in an inability to make payments, additional allowances could be required. The Company performs ongoing credit evaluations of its customers and adjusts credit limits based upon customer payment history and current creditworthiness, as determined by the Company's review of its customers' current credit information. The Company continuously monitors collections and payments from its customers and maintains a provision for estimated credit losses based upon its historical experience and any specific customer collection issues that have been identified. While such credit losses have historically been within the Company's expectations and the provisions established, the Company cannot guarantee that it will continue to experience the sa me credit loss rates that it has in the past. Measurement of such losses requires consideration of historical loss experience, including the need to adjust for current conditions, and judgments about the probable effects of relevant observable data, including present economic conditions such as delinquency rates and financial health of specific customers. The Company recorded $4, $3 and $6 in provisions to the Statements of Income for doubtful accounts in 2004, 2003 and 2002, respectively. The Company considers all available information in its quarterly assessments of the adequacy of the reserves for uncollectible accounts. If the provision for uncollectible trade receivables were to change by one percentage point of the Company's gross trade receivables, operating income is estimated to increase or decrease by less than $6.

Inventory Allowances The Company provides estimated inventory allowances for excess, slow moving and obsolete inventory as well as inventory whose carrying value is in excess of net realizable value. These reserves are based on current assessments about future demands, market conditions and related management initiatives. If market conditions and actual demands are less favorable than those projected by management, additional inventory write-downs may be required. The Company values its inventory at the lower of cost or net realizable market values. The Company regularly reviews inventory quantities on hand and records a provision for excess and obsolete inventory based primarily on estimated forecasts of product demand and production requirements for the next twelve months. Several factors may influence the realizability of its inventories, including decisions to exit a product line, technological change and new product development. These factors could result in an increase in the amount of obsole te inventory quantities on hand. Additionally, estimates of future product demand may prove to be inaccurate, in which case the provision required for excess and obsolete inventory may be understated or overstated. If in the future, the Company determined that its inventory was overvalued, it would be required to recognize such costs in cost of sales at the time of such determination. Likewise, if the Company determined that its inventory was undervalued, cost of sales in previous periods could have been overstated and the Company would be required to recognize such additional operating income at the time of sale. While such inventory losses have historically been within the Company's expectations and the provisions established, the Company cannot guarantee that it will continue to experience the same loss rates that it has in the past. Therefore, although the Company makes every effort to ensure the accuracy of forecasts of future product demand, including the impact of planned future product launches, any significant unanticipated changes in demand or technological developments could have a significant impact on the value of its inventory and its reported operating results. The Company recorded $18, $11 and $17 in provisions to the Statements of Income for excess, slow moving and obsolete inventory in 2004, 2003 and 2002, respectively. At this time, management does not believe that anticipated product launches would have a material effect on the recovery of the Company's existing net inventory balances. If the inventory allowance were to change by one percentage point of the Company's gross inventory, operating income is estimated to increase or decrease by less than $3.

Fair Value of Assets The Company assesses the carrying value of its identifiable intangible assets, long-lived assets and goodwill whenever events or changes in circumstances indicate that the carrying amount of the underlying asset may not be recoverable, or

Page 23

at least annually in the case of goodwill. Certain factors which may occur and indicate that an impairment exists include, but are not limited to the following: significant underperformance relative to expected historical or projected future operating results; significant changes in the manner of the Company's use of the underlying assets; and significant adverse industry or market economic trends. In the event that the carrying value of assets is determined to be unrecoverable, the Company would estimate the fair value of the assets or reporting unit and record an impairment charge for the excess of the carrying value over the fair value. The estimate of fair value requires management to make a number of assumptions and projections, which could include, but would not be limited to, future revenues, earnings and the probability of certain outcomes and scenarios. The Company's policy is consistent with current accounting guidance as prescribed by SFAS No. 142, Goodwill and Intangible Assets and SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets. See Note 1 ¾ Accounting Policies for a further discussion of SFAS No. 142 and SFAS No. 144. The Company also assesses the fair value of identifiable intangible assets, long-lived assets, goodwill and purchased in-process research and development at the inception of an acquisition.

Restructuring Actions The Company had no open restructuring programs as of December 25, 2004. Prior to 2003, the Company had engaged in several significant restructuring actions, which required the development of formalized plans as they relate to exit activities based on guidance provided by Emerging Issues Task Force (EITF) Issue No. 94-3, Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring). These plans required the Company to utilize estimates related to severance and other employee separation costs, lease cancellations and other exit costs. Given the significance and the timing of the execution of such actions, this process was complex and involved periodic reassessments of estimates calculated at the time the original decisions were made. The Company's policies for future restructuring actions, based on guidance provided by SFAS No. 146, Accounting for Costs Associated with Exit or D isposal Activities, which replaced EITF Issue No. 94-3, require recognition of costs associated with exit or disposal activities when they are incurred rather than at the date of a commitment to an exit or disposal plan. Therefore, if employees are not required to render service until they are terminated in order to receive the termination benefits, a liability for the termination benefits would be recognized and measured at its fair value at the communication date. Conversely, if employees are required to render service until they are terminated in order to receive the termination benefits, a liability for the termination benefits would be measured initially at the communication date based on the fair value of the liability as of the termination date. The Company would recognize the liability ratably over the future service period.

Deferred Tax Assets and Reserves The Company evaluates the recoverability of its deferred tax assets on an ongoing basis. This evaluation includes assessing the available positive and negative evidence surrounding this recoverability and estimating a valuation allowance. In determining the valuation allowance, the Company has considered future taxable income and the feasibility of tax planning initiatives. Should the Company determine that it is more likely than not it will realize certain of its deferred tax assets in the future, an adjustment would be required to reduce the existing valuation allowance and increase income. Alternatively, if the Company determined that it would not be able to realize its recorded net deferred tax asset, an adjustment to increase the valuation allowance would be charged to the results of operations in the period such conclusion was made. Net increases to the valuation allowance were $6, $1 and $2 in 2004, 2003 and 2002, respectively.
     In the normal course of business, the Company is regularly audited by federal, state and foreign tax authorities, and is periodically challenged regarding the amount of taxes due. These challenges include questions regarding the timing and amount of deductions and the allocation of income among various tax jurisdictions. Management believes the Company's tax positions comply with applicable tax law and intends to defend its positions. In evaluating the exposure associated with various tax filing positions, the Company records reserves for uncertain tax positions, and management believes these reserves are adequate. The Company's effective tax rate in a given financial statement period could be impacted if the Company prevailed in matters for which reserves have been established, or was required to pay amounts in excess of established reserves.

Employee Benefits The Company's benefit plans consist of defined benefit pension plans, defined contribution plans and a participatory defined benefit postretirement plan. The fair value of plan assets in the Company's U.S. defined benefit pension plan comprises 72% of the fair value of all Company defined benefit pension plan assets. The assets, liabilities and related expense of these plans are determined on an actuarial basis and are affected by the estimated market-related value of plan assets, estimates of the expected return on plan assets, discount rates, rates of increase of health care costs, rates of future compensation increases and other assumptions inherent in these valuations. The Company's actuarial consultants also use subjective factors such as withdrawal and mortality rates. The actuarial assumptions used may differ materially from actual results due to changing market and economic conditions, higher or lower withdrawal rates or longer or shorter life spans of participants. The Co mpany annually reviews the assumptions underlying the actuarial calculations and makes changes to these assumptions as necessary. The following is a discussion of the most significant estimates and assumptions used in connection with the Company's U.S. employee benefit plans.
     The expected return on plan assets for the Company's U.S. defined benefit pension plan for 2004 was 9%. This rate reflects the average rate of earnings expected on the funds invested to provide for the benefits included in the projected benefit obligation. This

Page 24

rate considers the actual performance of plan assets over the last 10 years and the investment policy of the Company to invest plan assets in both equity and fixed income (debt) securities to certain targeted levels. A one-percentage point change in the expected return on plan assets would result in an increase or decrease in employee benefit costs of approximately $2.
     The discount rate used for the Company's U.S. defined benefit pension plan for 2004 was 6%. The discount rate reflects the rate at which employee benefits could be effectively settled and is developed in coordination with the Company's actuaries. If the discount rate were to decrease by 1% for the U.S. pension plans, the plan liabilities would increase by approximately $26 and the expense would increase by approximately $2.
     Assuming a constant employee base, the most important estimate associated with the Company's postretirement plan is the assumed health care cost trend rate. A one-percentage point change in this estimate would increase or decrease the benefit obligation by approximately $8 and the expense would increase or decrease by approximately $1.
     Based on the Company's U.S. defined benefit pension plan's current assets and liabilities and using the current statutory minimum funding requirements and interest rates, no contributions would be required until 2009, when the minimum required contribution would be $4. Any changes to the assumptions described above or statutory changes including the current IRS methodology would have a significant impact on this estimate.

Derivative Financial Instruments and Hedging Activity The Company, as a result of its global operating and financing activities, is exposed to changes in interest rates and foreign currency exchange rates that may adversely affect its results of operations and financial position. In seeking to minimize the risks and/or costs associated with such activities, the Company manages exposure to changes in interest rates and foreign currency exchange rates primarily through its use of derivatives. The Company enters into financial derivative instruments only for the purpose of minimizing those risks and thereby reducing volatility in income. Derivative instruments utilized as part of the Company's risk management strategy may include interest rate swaps, locks and caps, and forward foreign exchange contracts and options. All derivatives are recognized on the balance sheet at fair value. The Company establishes the fair value of its derivatives using quoted market prices, which is the preferred method of e stablishing fair value as prescribed by SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities. The Company uses the quoted market price of an instrument with similar characteristics if none exists for its derivative. Additionally, the Company may also use prescribed valuation techniques such as discounted future cash flows, option pricing models or matrix pricing models to establish fair value in the event quoted market prices of the derivative or of an instrument with similar characteristics are not available. The fair value (also the carrying value) of foreign exchange instruments and interest rate instruments were a net receivable of $2 and a net payable of less than $1, respectively, as of December 25, 2004 and net receivables of $1 and $1, respectively, at December 27, 2003. The Company does not employ leveraged derivative instruments, nor does it enter into derivative instruments for trading or speculative purposes. In using derivative instruments, the Company is exposed to credit risk. The Company's derivative instrument counterparties are high quality investment or commercial banks with significant experience with such instruments. The Company manages exposure to counterparty risk by requiring specific minimum credit standards, diversification of counterparties, and by regularly monitoring credit ratings of its counterparties.

Other Matters

Environment The Company believes it is in compliance in all material respects with applicable environmental laws and regulations. The Company is presently involved in remedial and investigatory activities at certain locations in which the Company has been named a responsible party. At all such locations, the Company believes such efforts will not have a material adverse effect on its results of operations or financial position.

New Accounting Guidance In December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Act) was signed into law. The Act introduces a prescription drug benefit under Medicare, as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. In May 2004, the FASB issued FASB Staff Position (FSP) No. FAS 106-2, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (FSP FAS 106-2). This FSP supersedes FSP FAS 106-1, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003. FSP FAS 106-2 provides final accounting guidance related to the Act for employers that sponsor retiree health care plans which provide prescription drug benefits, and also requires certain disclosures. The FSP requires companies to record any expected amoun t of subsidy under the Act as an actuarial gain to be amortized into income over the average working life of the Company's employees. The Company believes (based upon currently available regulatory guidance) that parts of its postretirement health care plan are actuarially equivalent to Medicare Part D. The Company adopted the provisions of FSP FAS 106-2 as of July 1, 2004. The reduction in the accumulated postretirement benefit obligation as of the date of adoption was $12.6. The effect of the subsidy on the measurement of net periodic benefit cost was a reduction of $0.8 which includes a $0.2 reduction in service cost, a $0.4

Page 25

reduction in interest cost and a $0.2 reduction in amortization of net loss.
     In September 2004, the EITF reached a final consensus on Issue 04-8, The Effect of Contingently Convertible Debt on Diluted Earnings per Share, addressing when the dilutive effect of contingently convertible debt with a market price trigger should be included in diluted earnings per share (EPS). According to the final consensus, these securities should be treated as convertible securities and included in dilutive EPS calculations (if dilutive) regardless of whether the market price trigger has been met. The EITF agreed that the final consensus is effective for all periods ending after December 15, 2004 and is applied by retroactively restating previously reported EPS. See Note 2 ¾ Earnings Per Share for a discussion of the Company's application of Issue 04-8.
     In December 2004, the FASB issued its standard on accounting for share-based payments, SFAS No. 123 (revised 2004), Share-Based Payment requiring companies to recognize compensation cost relating to share-based payment transactions in the financial statements. SFAS No. 123(R) requires the measurement of compensation cost to be based on the fair value of the equity or liability instruments issued. Public companies will be required to apply SFAS No. 123(R) as of the first interim or annual reporting period that begins after June 15, 2005. SFAS No. 123(R) covers a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. SFAS No. 123(R) replaces SFAS No. 123, Accounting for Stock-Based Compensation, and supercedes APB Opinion No. 25, Accounting for Stock Issued to Employees. The Company is currently assessing the impact of SFAS No. 123(R) and considering the valuation models available. The Company expects to adopt SFAS No. 123(R) in its interim period ending September 24, 2005.
     On October 22, 2004, the American Jobs Creation Act of 2004 was signed into law. The bill creates a temporary incentive for U.S. corporations to repatriate accumulated income earned abroad by providing a dividends received deduction of 85% for certain dividends from controlled foreign corporations. The deduction is subject to a number of limitations and uncertainty remains as to how to interpret numerous of the bill's provisions. The Company is currently evaluating the effect of this new tax legislation on its financial position. See Note 9 ¾ Provision for Income Taxes, for further discussion.
     The FASB also recently issued Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities¾ - -an Interpretation of ARB No. 51, that became effective in fiscal year 2004 and which replaced FASB Interpretation No. 46, Consolidation of Variable Interest Entities. The adoption of this Interpretation did not have an impact on the Company's financial position.

Information Concerning Forward-Looking Statements Forward-looking statements include statements concerning plans, objectives, goals, projections, strategies, future events or performance, and underlying assumptions and other statements which are other than statements of historical facts. When used in this discussion, the words "anticipate", "appears", "foresee", "should", "expect", "estimate", "project", "will", "are likely" and similar expressions are intended to identify forward-looking statements. The forward-looking statements contained in this report under the headings Executive Overview and Outlook and elsewhere are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve predictions of future Company performance, and are thus dependent on a number of factors, which may affect the Company's performance. In many cases, specific factors that may impact performance materially have been identifi ed in connection with specific forward-looking statements. Additional risks and uncertainties include, without limitation, general global and local economic, political and sociological conditions including, without limitation, periods of localized disease outbreak and the effect on economic, commercial, social and political systems caused by natural disasters (such as, without limitation, earthquakes, hurricanes/typhoons, tornadoes and tsunamis), changes in such conditions, the impact of competition, seasonality and general economic conditions in the global lens and lens care, ophthalmic cataract and refractive and pharmaceutical markets where the Company's businesses compete, effects of war or terrorism, changing currency exchange rates, the general political climate existing between and within countries throughout the world, events affecting the ability of the Company to timely deliver its products to customers, including those which affect the Company's carriers' ability to perform delivery services, chan ging trends in practitioner and consumer preferences and tastes, changes in technology, medical developments relating to the use of the Company's products, legal proceedings initiated by or against the Company, including those related to patents and other intellectual property in the U.S. and throughout the world, the impact of Company performance on its financing costs, enactment of new legislation or regulations or changes in application or interpretation of existing legislation or regulations that affect the Company, changes in government regulation of the Company's products and operations, changes in governmental laws and regulations relating to the import and export of products, government pricing changes and initiatives with respect to healthcare products in the U.S. and throughout the world, changes in private and regulatory schemes providing for the reimbursement of patient medical expenses, changes in the Company's credit ratings, or the cost of access to sources of liquidity, the Company's ability to maintain positive relationships with third-party financing resources, the financial well-being and commercial success of key customers, development partners and suppliers, changes in the availability of and other aspects surrounding the supply of raw materials used in the manufacture of the Company's products, changes in tax rates or policies or in rates of inflation, changes in accounting principles and the application of such principles to the Company, the performance by third parties upon whom the Company relies for the provision of goods or services, the ability of the Company to

Page 26

successfully execute marketing strategies, the ability of the Company to secure and maintain intellectual property protections, including patent rights, with respect to key technologies in the U.S. and throughout the world, the ability of the Company to secure and maintain copyright protections relative to its customer-valued names, trademarks, trade names and other designations in the U.S. and throughout the world, difficulties or delays in the development, laboratory and clinical testing, regulatory approval, manufacturing, release or marketing of products, the successful completion and integration of acquisitions by the Company, the successful relocation of certain manufacturing processes, the continued successful implementation of efforts in managing and reducing costs and expenses, the continued successful execution of the Company's profitability improvement plans, the Company's success in the process of management testing, including the evaluation of results, and auditor attestation of internal cont rols, as required under the Sarbanes-Oxley Act of 2002, the Company's success in introducing and implementing its enterprise-wide information technology initiatives, including the corresponding impact on internal controls and reporting, the effect of changes within the Company's organization, including the selection and development of the Company's management team and such other factors as are described in greater detail in the Company's filings with the Securities and Exchange Commission, including, without limitation, Exhibit 99-a to this 2004 Annual Report on Form 10-K and the Current Report on Form 8-K dated June 14, 2002.

Item 7A.     Quantitative and Qualitative Disclosures About Market Risk

The section entitled Market Risk as set forth on page 21 in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations of this Report on Form 10-K is incorporated herein by reference.

Page 27

Item 8.     Financial Statements and Supplementary Data

Statements of Income

For the Years Ended December 25, 2004, December 27, 2003 and December 28, 2002 Dollar Amounts in Millions Except Per Share Data	2004	2003	2002
Net Sales	$2,232.3	$2,019.5	$1,816.7
Costs and Expenses
Cost of products sold	934.9	858.0	797.1
Selling, administrative and general	855.3	782.3	692.5
Research and development	162.5	149.9	128.4
Restructuring (reversal) charges and asset write-offs	-	(6.3)	49.0
	1,952.7	1,783.9	1,667.0
Operating Income	279.6	235.6	149.7
Other (Income) Expense
Interest and investment income	(13.8)	(15.7)	(44.9)
Interest expense	48.4	54.2	53.9
Foreign currency, net	(1.8)	0.1	3.7
	32.8	38.6	12.7
Income before Income Taxes and Minority Interest	246.8	197.0	137.0
Provision for income taxes	82.7	67.0	47.2
Minority interest in subsidiaries	4.5	3.6	17.3
Income before Cumulative Effect of Change in Accounting Principle	159.6	126.4	72.5
Cumulative Effect of Change in Accounting Principle, Net of Taxes	-	(0.9)	-
Net Income	$   159.6	$   125.5	$     72.5
Basic Earnings (Loss) Per Share:
Before Cumulative Effect of Change in Accounting Principle	$     3.03	$     2.39	$     1.35
Cumulative Effect of Change in Accounting Principle	-	(0.02)	-
	$     3.03	$     2.37	$     1.35
Average Shares Outstanding - Basic (000s)	52,670	53,019	53,832
Diluted Earnings (Loss) Per Share:
Before Cumulative Effect of Change in Accounting Principle	$     2.93	$     2.36	$     1.34
Cumulative Effect of Change in Accounting Principle	-	(0.02)	-
	$     2.93	$     2.34	$     1.34
Average Shares Outstanding - Diluted (000s)	54,504	53,519	53,997

See Notes to Financial Statements

Page 28

Balance Sheets

December 25, 2004 and December 27, 2003 Dollar Amounts in Millions - Except Per Share Data	2004	2003
Assets
Cash and cash equivalents	$   501.8	$   562.6
Trade receivables, less allowances of $22.9 and $21.3, respectively	511.4	476.3
Inventories, net	204.4	207.3
Other current assets	95.7	110.7
Deferred income taxes	67.2	64.5
Total Current Assets	1,380.5	1,421.4
Property, Plant and Equipment, net	580.9	548.1
Goodwill	736.3	709.1
Other Intangibles, net	204.3	220.5
Other Long-Term Assets	108.7	100.3
Deferred Income Taxes	11.4	7.0
Total Assets	$3,022.1	$3,006.4
Liabilities and Shareholders' Equity
Current portion of long-term debt	$   100.8	$   195.0
Accounts payable	93.6	102.7
Accrued compensation	149.1	115.7
Accrued liabilities	390.8	353.0
Federal, state and foreign income taxes payable	97.8	106.9
Deferred income taxes	0.4	3.1
Total Current Liabilities	832.5	876.4
Long-Term Debt, less current portion	543.3	652.0
Other Long-Term Liabilities	130.3	147.7
Deferred Income Taxes	73.6	111.4
Minority Interest	15.5	15.5
Total Liabilities	1,595.2	1,803.0
Common Stock, par value $0.40 per share, 200 million shares authorized,    60,340,522 shares issued (60,296,222 shares in 2003)	24.1	24.1
Class B Stock, par value $0.08 per share, 15 million shares authorized, 443,584    shares issued (580,656 shares in 2003)	-	- -
Capital in Excess of Par Value	103.8	103.9
Common and Class B Stock in Treasury, at cost, 7,544,976 shares    (8,257,530 shares in 2003)	(397.8)	(416.2)
Retained Earnings	1,528.9	1,396.9
Accumulated Other Comprehensive Income	173.8	102.8
Other Shareholders' Equity	(5.9)	(8.1)
Total Shareholders' Equity	1,426.9	1,203.4
Total Liabilities and Shareholders' Equity	$3,022.1	$3,006.4

See Notes to Financial Statements

Page 29

Statements of Cash Flows

For the Years Ended December 25, 2004, December 27, 2003 and December 28, 2002 Dollar Amounts in Millions	2004	2003	2002
Cash Flows from Operating Activities
Net Income	$159.6	$125.5	$  72.5
Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities
Depreciation	100.3	99.3	105.2
Amortization	24.9	25.6	24.9
Restructuring (reversal) charges and asset write-offs	-	(6.3)	49.0
Deferred income taxes	(51.4)	(26.4)	(59.5)
Stock compensation expense	7.1	7.1	7.3
Tax benefits associated with exercise of stock options	16.1	-	-
Gain from sale of investments available-for-sale	(0.3)	-	(18.1)
Loss on retirement of fixed assets	11.0	2.3	3.0
Changes in Assets and Liabilities
Trade receivables	(17.9)	(14.3)	(27.1)
Inventories	12.8	18.0	57.1
Other current assets	16.6	10.6	12.0
Other long-term assets, including equipment on operating lease	(20.1)	(11.9)	23.4
Accounts payable and accrued liabilities	58.7	(12.0)	(31.9)
Income taxes payable	(9.0)	22.1	14.2
Other long-term liabilities	(27.9)	8.6	4.6
Net Cash Provided by Operating Activities	280.5	248.2	236.6
Cash Flows from Investing Activities
Capital expenditures	(118.9)	(91.5)	(91.9)
Net cash paid for acquisition of businesses and other intangibles	(2.1)	(6.4)	(7.1)
Sale price adjustment related to disposal of discontinued operations	-	-	(23.0)
Cash received from sale of investments available-for-sale	0.6	-	37.4
Other	(1.2)	3.8	(2.3)
Net Cash Used in Investing Activities	(121.6)	(94.1)	(86.9)
Cash Flows from Financing Activities
Termination of investor's interest in partnership	-	-	(200.0)
Repurchases of Common and Class B shares	(79.0)	(72.0)	(0.8)
Exercise of stock options	77.8	12.1	2.4
Net repayments of notes payable	-	(1.4)	(32.1)
Repayment of long-term debt	(196.6)	(200.7)	(183.1)
Proceeds from issuance of debt	0.1	210.1	225.0
Payment of dividends	(27.6)	(27.7)	(41.8)
Net Cash Used in Financing Activities	(225.3)	(79.6)	(230.4)
Effect of exchange rate changes on cash and cash equivalents	5.6	23.0	11.4
Net Change in Cash and Cash Equivalents	(60.8)	97.5	(69.3)
Cash and Cash Equivalents, Beginning of Year	562.6	465.1	534.4
Cash and Cash Equivalents, End of Year	$501.8	$562.6	$465.1
Supplemental Cash Flow Disclosures
Cash paid for interest	$  48.3	$  57.4	$  52.7
Net cash payments for income taxes	115.2	58.2	21.9

See Notes to Financial Statements

Page 30

Statements of Changes in Shareholders' Equity

For the Years Ended December 25, 2004, December 27, 2003 and December 28, 2002 Dollar Amounts in Millions
	Total	Common and Class B Stock 1,2	Capital in Excess of Par	Treasury Stock	Retained Earnings	Accumulated Other Compre- hensive Income (Loss)	Other Shareholders' Equity
Balance at December 29, 2001	$  975.0	$24.1	$ 95.6	$(364.0)	$1,261.4	$ (36.0)	$(6.1)
Components of Comprehensive Income:
Net income	72.5	-	-	-	72.5	-	-
Currency translation adjustments	56.9	-	-	-	-	56.9	-
Net loss on cash flow hedges	(11.5)	-	-	-	-	(11.5)	-
Reclassification adjustment into net          income for net loss on cash flow          hedges	3.6	- -	- -	- -	- -	3.6	- -
Unrealized holding loss 3	(2.8)	-	-	-	-	(2.8)	-
Reclassification adjustment for net gains          realized in net income 4	(18.1)	- -	- -	- -	- -	(18.1)	- -
Minimum additional pension liability	(30.6)	-	-	-	-	(30.6)	-
Total comprehensive income	70.0
Net change in shares under       employee plans (232,932 shares)	0.6	- -	6.6	- -	- -	- -	(6.0)
Treasury shares issued under employee       plans (127,284 shares)	4.3	- -	- -	4.3	- -	- -	- -
Treasury shares repurchased       (4,662 shares)	(0.1)	- -	- -	(0.1)	- -	- -	- -
Amortization of unearned compensation	3.0	-	-	-	-	-	3.0
Dividends 5	(35.0)	-	-	-	(35.0)	-	-
Balance at December 28, 2002	$1,017.8	$24.1	$102.2	$(359.8)	$1,298.9	$ (38.5)	$(9.1)
Components of Comprehensive Income:
Net income	125.5	-	-	-	125.5	-	-
Currency translation adjustments	141.9	-	-	-	-	141.9	-
Reclassification adjustment from         currency translation adjustments into         net income for liquidations of non-         U.S. subsidiaries	(6.8)	- -	- -	- -	- -	(6.8)	- -
Net loss on cash flow hedges	(0.2)	-	-	-	-	(0.2)	-
Reclassification adjustment into net          income for net loss on cash flow          hedges	1.7	- -	- -	- -	- -	1.7	- -
Minimum additional pension liability	4.7	-	-	-	-	4.7	-
Total comprehensive income	266.8
Net change in shares under       employee plans (149,108 shares)	(2.1)	- -	1.7	- -	- -	- -	(3.8)
Treasury shares issued under employee       plans (460,056 shares)	15.6	- -	- -	15.6	- -	- -	- -
Treasury shares repurchased       (1,758,796 shares)	(72.0)	- -	- -	(72.0)	- -	- -	- -
Amortization of unearned compensation	4.8	-	-	-	-	-	4.8
Dividends 5	(27.5)	-	-	-	(27.5)	-	-

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Balance at December 27, 2003	$1,203.4	$24.1	$103.9	$(416.2)	$1,396.9	$102.8	$(8.1)
Components of Comprehensive Income:
Net income	159.6	-	-	-	159.6	-	-
Currency translation adjustments	70.7	-	-	-	-	70.7	-
Reclassification adjustment into net          income for net loss on cash flow          hedges	1.9	- -	- -	- -	- -	1.9	- -
Minimum additional pension liability	(1.6)	-	-	-	-	(1.6)	-
Total comprehensive income 6	230.6
Net change in shares under       employee plans (137,072 shares)	(2.3)	- -	(0.1)	- -	- -	- -	(2.2)
Treasury shares issued under employee       plans (1,986,353 shares)	97.6	- -	- -	97.6	- -	- -	- -
Treasury shares repurchased       (1,293,625 shares)	(79.2)	- -	- -	(79.2)	- -	- -	- -
Amortization of unearned compensation	4.4	-	-	-	-	-	4.4
Dividends 5	(27.6)	-	-	-	(27.6)	-	-
Balance at December 25, 2004	$1,426.9	$24.1	$103.8	$(397.8)	$1,528.9	$173.8 7	$(5.9)

1     There are also 10 thousand shares of $100 par value 4% cumulative preferred stock authorized, none of which has been issued.
²     There are also 25 million shares of $1 par value Class A preferred stock authorized, none of which has been issued.
³     Unrealized holding loss/gain relates to an available-for-sale equity security recorded at market value.
⁴     Shares of Charles River Laboratories sold during the first quarter of 2002 resulted in realized gains as discussed in Note 8 ¾ Other Short- and Long-Term Investments.
⁵     Cash dividends of $0.65 per share were declared on Common and Class B stock in 2002 and $0.52 in 2003 and 2004.
⁶     Total comprehensive income for the year ended December 25, 2004 is reported net of related tax effects. Amounts of income tax benefit (expense) for the components of other comprehensive income are as follows: reclassification adjustment for net loss on cash flow hedges, $(1.1) and minimum additional pension liability, $0.8.
⁷     Accumulated other comprehensive income is $173.8 at December 25, 2004 and includes the following accumulated income (loss) amounts: currency translation adjustment, $222.6; net loss on cash flow hedges, $(6.4); and minimum additional pension liability, $(42.4).

See Notes to Financial Statements

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Notes to Financial Statements

Dollar Amounts in Millions Except Per Share Data

1.     Accounting Policies

Principles of Consolidation The financial statements include all majority-owned U.S. and non-U.S. subsidiaries. Intercompany accounts, transactions and profits are eliminated. The fiscal year is the 52- or 53-week period ending the last Saturday in December.

Segment Reporting In accordance with Statement of Financial Accounting Standards (SFAS) No. 131, Disclosures about Segments of an Enterprise and Related Information, the Company reports its results consistent with the manner in which financial information is viewed by management for decision-making purposes.
     The Company's management structure is organized on a regional basis for commercial operations. The research and development and product supply functions of the Company are managed on a global basis. The Company's business segments are comprised of the Americas region; the Europe, Middle East and Africa region (Europe); the Asia region; the Research, Development & Engineering organization and the Global Supply Chain organization.

Use of Estimates The financial statements have been prepared in conformity with generally accepted accounting principles and, as such, include amounts based on informed estimates and judgments of management with consideration given to materiality. For example, estimates are used in determining valuation allowances for uncollectible trade receivables, obsolete inventory, deferred income taxes and in valuing purchased intangible assets. Actual results could differ from those estimates.

Cash Equivalents Cash equivalents include time deposits and highly liquid investments which mature in three months or less.

Inventories Inventories are valued at the lower of cost or market using the first-in, first-out (FIFO) method. The Company provides estimated inventory allowances for excess, slow moving and obsolete inventory as well as inventory whose carrying value is in excess of net realizable value.

Property, Plant and Equipment Property, plant and equipment, including improvements that significantly add to productive capacity or extend useful life, are recorded at cost, while maintenance and repairs are expensed as incurred. Depreciation is calculated for financial reporting purposes using the straight-line method based on the estimated useful lives of the assets as follows: buildings, 30 to 40 years; machinery and equipment, two to ten years; and leasehold improvements, the shorter of the estimated useful life or the lease periods. In accordance with SFAS No. 144, Accounting for the Impairment or Disposal of Long-Lived Assets, the Company assesses all long-lived assets, including property, plant and equipment, for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. Interest cost capitalization associated with various projects commences with the first expenditure for the project and continues until the project is substantially complete and ready for its intended use.

Goodwill and Other Intangibles The Company's policy is consistent with current accounting guidance as prescribed by SFAS No. 141, Business Combinations and SFAS No. 142, Goodwill and Intangible Assets. As described in Note 5 ¾ Accounting for Goodwill and Intangibles, the Company completed its annual impairment test on each of its reporting units during the fourth quarters of 2004 and 2003 and determined that goodwill was not impaired. Fair value was determined using the same methodology employed during the initial application of SFAS No. 142. The Company will perform interim impairment tests of goodwill if an event occurs or circumstances change that would more likely than not reduce the fair value of any of its reporting units below its carrying amount.

Revenue Recognition and Related Provisions and Allowances The Company markets products in five product categories: contact lens, lens care, pharmaceuticals, cataract and vitreoretinal, and refractive. The Company recognizes revenue for each of these product categories in accordance with Staff Accounting Bulletin No. 104, Revenue Recognition, corrected copy (SAB 104) when: persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the Company's price to its customers is fixed or determinable, and collectibility is reasonably assured. Within each product category the Company has established programs that, under specified conditions, allow customers to return products and, in accordance with SFAS No. 48, Revenue Recognition When Right of Return Exists, records liabilities for estimated returns and allowances at the time revenue is recognized. The Company's liability for estimated returns considers the various terms and arrangements offered, including sales with extended credit terms. Also within each product category the Company has established certain customer incentive programs such as: cash discounts, promotional and advertising allowances, volume discounts, contractual pricing allowances, and rebates and coupons. The Company records an estimated reduction to revenue for these programs in accordance with Emerging Issues Task Force 01-9, Accounting for Consideration Given by a Vendor to a Customer or a Reseller of the Vendor's Products (EITF 01-9).

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The Company maintains provisions for uncollectible accounts for estimated losses resulting from the inability of its customers to remit payments. The Company continuously monitors collections and payments from its customers and maintains a provision for estimated credit losses based upon its historical experience and any specific customer collection issues that have been identified. Amounts billed to customers in sale transactions related to shipping and handling are classified as revenue in accordance with Emerging Issues Task Force (EITF) 00-10, Accounting for Shipping and Handling Fees and Costs. The Company does offer some sales programs that are unique to a product category. These are discussed below.

Lens and Lens Care - The contact lens category includes traditional, planned replacement, daily disposable, multifocal, continuous wear and toric soft lenses and rigid gas permeable lenses and materials. These products are marketed to licensed eye care professionals, health product retailers and distributors. The lens care category includes multi-purpose solutions, enzyme cleaners and saline solutions. These products are marketed to licensed eye care professionals, health product retailers, independent pharmacies, drug stores, food stores, mass merchandisers and distributors. The Company offers co-operative advertising programs within the contact lens and lens care categories. These programs are made available to large retailers and mass merchandisers that provide frequent advertising to their customers. The Company also offers manufacturer's coupons and mail-in rebates predominately within the lens care category to end consumers. These programs are recorded as a reduction in revenue at the time th e program is offered in accordance with EITF 01-9 as the fair value of the benefit cannot be reasonably estimated or, in the case of coupons and rebates, the Company does not receive a separable identifiable benefit.

Pharmaceuticals - The pharmaceuticals category includes generic and proprietary prescription ophthalmic drugs, ocular vitamins, over-the-counter medications, and vision accessories. These products are marketed through the Company's sales force and distributed primarily through wholesalers, with additional sales to independent pharmacies, drug stores, food stores, mass merchandisers, hospitals and distributors. The Company enters into contractual pricing agreements with indirect customers that result in rebates to wholesalers and price protection allowances to certain customers. These rebates and allowances are recorded as a reduction in revenue in accordance with EITF 01-9 as the Company does not receive a separable identifiable benefit.

Cataract and Vitreoretinal, and Refractive - The cataract and vitreoretinal category includes intraocular lenses (IOLs), phacoemulsification equipment and related disposable products, and viscoelastics and other products used in cataract and vitreoretinal surgery. The refractive category includes lasers, microkeratomes, diagnostic equipment and other products used in refractive surgery. These products are marketed to ophthalmic surgeons, hospitals, ambulatory surgery centers or vision centers, and distributors. In these product categories the Company will market disposable and consumable products either individually or in combination with equipment. If sold in combination with equipment, the Company allocates revenue to the separate revenue elements in accordance with EITF 00-21, Accounting for Revenue Arrangements with Multiple Deliverables. Revenues from equipment sales are recorded either at the time risk of loss passes to the customer or, in the case of lasers, upon installation for outr ight sales and sales-type leasing arrangements, or over the lease term for operating leases in accordance with SAB 104 and SFAS No. 13, Accounting for Leases. The Company offers 12 month warranties on equipment and records a reserve at the time of sale for the cost associated with the warranty in accordance with SFAS No. 5, Accounting for Contingencies. Also in the cataract and vitreoretinal product category the Company offers IOLs to surgeons on a consignment basis. In accordance with SAB 104 the Company recognizes revenue for consignment inventory when the IOL is implanted during surgery and not upon shipment to the surgeon.

Advertising Expense External costs incurred in producing media advertising are expensed the first time the advertising takes place. At December 25, 2004 and December 27, 2003, $2.2 and $3.0 of deferred advertising costs, respectively, were reported as other current assets representing primarily production and design costs for advertising to be run in the subsequent fiscal year. Advertising expenses of $205.7, $186.3 and $165.6 were included in selling, administrative and general expenses for 2004, 2003 and 2002, respectively.

Research and Development Costs Internal research and development costs are expensed as incurred. Third-party research and development costs are expensed as the contracted work is performed. Where certain milestone payments are due to third parties under research and development arrangements, the milestone payment obligations are expensed when the milestone results are achieved, up to the point of certain regulatory approvals. In the event payments are made to third parties subsequent to certain regulatory approvals, they are either expensed or capitalized depending upon the nature of the payment. For example, royalty payments are expensed, whereas payments to purchase an associated intangible asset are capitalized and amortized over the remaining useful life of the related product. Amounts capitalized for such payments are included in other intangibles, net of accumulated amortization. (See Note 6 ¾ Acquired Intangible Assets.)

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Stock Based Compensation The Company has granted stock options to its key employees and non-employee directors under several stock-based compensation plans, with employee grants typically vesting ratably over three years and expiring ten years from the date of grant (as discussed in Note 14 ¾ Stock Compensation Plans). Vesting is contingent upon a continued employment relationship with the Company. The Company also issues restricted stock awards to officers and other key personnel. These awards have vesting periods up to seven years with vesting criteria based on the attainment of specific performance goals such as average sales and cumulative earnings per share targets and based on continued employment until applicable vesting dates. Director option grants are made pursuant to a formula and are vested 100% after one year. The Company measures stock-based compensation for option grants under the provisions of Accounting Principles Board (APB) Opinion No. 25, Accounting for Stock Issued to Employees. Accordingly, given the fixed nature of the equity instruments granted under such plans, no compensation cost has been recognized other than for restricted stock awards. Compensation expense for restricted stock awards is recorded based on applicable vesting criteria, and for those awards w ith performance goals as such goals are met. The Company's net income and earnings per share would have been reduced to the pro forma amounts shown below if compensation cost had been determined based on the fair value at the grant dates using the Black-Scholes option-pricing model in accordance with SFAS No. 123, Accounting for Stock-Based Compensation as amended by SFAS No. 148, Accounting for Stock-Based Compensation-Transition and Disclosure:

	2004	2003	2002
Net income, as reported Stock-based compensation    cost included in reported net    income, net of tax	$159.6      4.7	$125.5      4.6	$72.5      4.7
Stock-based compensation cost    determined under the fair value    method for all awards, net of tax	(17.5)	(15.7)	(19.1)
Pro forma net income	$146.8	$114.4	$58.1
Basic earnings per share:
As reported	$3.03	$2.37	$1.35
Pro forma	2.79	2.16	1.08
Diluted earnings per share:
As reported	$2.93	$2.34	$1.34
Pro forma	2.70	2.14	1.07

Comprehensive Income The Company defines comprehensive income as net income plus the sum of currency translation adjustments, unrealized gains/losses on derivative instruments, unrealized holding gains/losses on securities and minimum pension liability adjustments (collectively "other comprehensive income") and presents comprehensive income in the Statements of Changes in Shareholders' Equity.

Investments in Debt and Equity Securities In 2001, the Company held an investment classified as available-for-sale in accordance with SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities. Accordingly, any unrealized holding gains, net of taxes, were excluded from income and included as a component of other comprehensive income until realized. Fair value of the investment was determined based on market prices. During the first quarter of 2002, the Company liquidated the remaining 49% of the investment and recorded a reclassification adjustment into earnings for net gains realized as described in Note 8 ¾ Other Short- and Long-Term Investments.

Foreign Currency For most subsidiaries outside the U.S., the local currency is the functional currency, and translation adjustments are accumulated as a component of other comprehensive income. The accumulated income balances of currency translation adjustments were $222.6, $151.9 and $16.8 at the end of 2004, 2003 and 2002, respectively.
     For subsidiaries that operate in U.S. dollars, the U.S. dollar is the functional currency, and gains and losses that result from remeasurement are included in income. Foreign currency translation resulted in gains of $16.6, $4.3 and $4.6 in 2004, 2003 and 2002, respectively.
     The Company hedges certain foreign currency transactions, firm commitments and net assets of certain non-U.S. subsidiaries by entering into forward foreign exchange contracts. Gains and losses associated with currency rate changes on forward contracts hedging foreign currency transactions are recorded in income. The effects of foreign currency transactions, including related

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hedging activities, were losses of $14.8, $4.4 and $8.3 in 2004, 2003 and 2002, respectively.

Derivative Financial Instruments and Hedging Activity In accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, the Company records all derivative instruments on the balance sheet at their respective fair values. Changes in the fair value of derivatives are recorded each period in current income unless the instruments have been designated as cash flow or net investment hedges, in which case such changes are recorded in other comprehensive income. The Company does not apply hedge accounting to contracts utilized to offset foreign exchange exposures related to foreign currency denominated assets and liabilities because they are marked to market through income at the same time that the exposed asset/liability is remeasured through income; both are recorded in foreign exchange loss (gain).
     Upon entering into a derivative contract, the Company may designate, as appropriate, the derivative as a fair value hedge, cash flow hedge, foreign currency hedge or hedge of a net investment in a foreign operation. At inception, the Company formally documents the relationship between the hedging instrument and underlying hedged item, as well as risk management objective and strategy. In addition, the Company assesses, both at inception and on an ongoing basis, whether the derivative used in a hedging transaction is highly effective in offsetting changes in the fair value or cash flow of the respective hedged item. When it is determined that a derivative is no longer highly effective as a hedge, the Company will discontinue hedge accounting prospectively.
     Fair value hedges may be employed by the Company to hedge changes in the fair value of recognized financial assets or liabilities or unrecognized firm commitments. Changes in the fair value of the derivative instrument and the hedged item attributable to the hedged risk are recognized in income, and will generally be offsetting. The Company attempts to structure fair value hedges so as to qualify for the shortcut method of hedge effectiveness analysis, thereby assuming no ineffectiveness in the hedge relationship. In the event it is determined that the hedging relationship no longer qualifies as an effective fair value hedge, the derivative will continue to be carried on the balance sheet at its fair value, with changes in fair value recorded in income. Upon termination of a derivative in an effective fair value hedge, any associated gain or loss will be an adjustment to income over the remaining life of the hedged item, if any.
     The Company may implement cash flow hedges to protect itself from fluctuation in cash flows associated with recognized variable-rate assets or liabilities or forecasted transactions. Changes in the fair value of the hedging derivative are initially recorded in other comprehensive income, then recognized in income in the same period(s) in which the hedged transaction affects income. The Company attempts to structure cash flow hedges such that all the critical terms of the derivative match the hedged item, thereby assuming no ineffectiveness in the hedge relationship at inception. The Company performs and documents an assessment of hedge effectiveness on a quarterly basis throughout the hedge period. In the event it is determined that the hedging relationship no longer qualifies as an effective cash flow hedge, the derivative will continue to be carried on the balance sheet at its fair value, with changes in fair value recorded in income. If hedge accounting is discontinued becaus e it becomes probable a forecasted transaction will not occur, the derivative will continue to be carried on the balance sheet at its fair value, with changes in fair value recorded in income, and any amounts previously recorded in other comprehensive income will immediately be recorded in income.
     The Company will enter into foreign currency derivatives to protect itself from variability in cash flows associated with recognized foreign currency denominated assets or liabilities or forecasted transactions. Changes in the fair value of the hedging derivative are initially recorded in other comprehensive income, then recognized in income in the same period(s) in which the hedged transaction affects income.
     The Company has numerous investments in foreign subsidiaries, and the net assets of these subsidiaries are exposed to currency exchange rate volatility. To hedge this exposure the Company may utilize forward foreign exchange contracts. Net investment hedges are implemented for material subsidiaries on a selective basis. The effective portion of the change in fair value of the hedging instrument is reported in the same manner as the translation adjustment for the hedged subsidiary; namely, reported in the cumulative translation adjustment section of other comprehensive income. The fair value of the derivative attributable to changes between the forward rate and spot rate is excluded from the measure of hedge effectiveness and that difference is reported in income over the life of the contract. The Company evaluates its hedges of net investments in foreign subsidiaries quarterly for effectiveness and adjusts the value of hedge instruments or redesignates the hedging relationship a s necessary.
     The Company enters into forward foreign exchange contracts, with terms normally lasting less than six months, to hedge against foreign currency transaction gains and losses on foreign currency denominated assets and liabilities based on changes in foreign currency spot rates. Although allowable, a hedging relationship for this risk has not been designated, as designation will not achieve different financial reporting results. Forward foreign exchange contracts within this category are carried on the balance sheet at fair value, with changes in fair value recorded in income.

New Accounting Guidance In December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Act) was signed into law. The Act introduces a prescription drug benefit under Medicare, as well as a federal subsidy to sponsors of retiree health care benefit plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. In May 2004, the Financial Accounting Standards Board (FASB) issued FASB Staff Position (FSP) No. FAS 106-2, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (FSP FAS 106-2). This FSP supersedes FSP FAS 106-1, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug,

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Improvement and Modernization Act of 2003. FSP FAS 106-2 provides final accounting guidance related to the Act for employers that sponsor retiree health care plans which provide prescription drug benefits, and also requires certain disclosures. The FSP requires companies to record any expected amount of subsidy under the Act as an actuarial gain to be amortized into income over the average working life of the Company's employees. The Company believes (based upon currently available regulatory guidance) that parts of its postretirement health care plan are actuarially equivalent to Medicare Part D. The Company adopted the provisions of FSP FAS 106-2 as of July 1, 2004. The reduction in the accumulated postretirement benefit obligation as of the date of adoption was $12.6. The effect of the subsidy on the measurement of net periodic benefit cost was a reduction of $0.8 which includes a $0.2 reduction in service cost, a $0.4 reduction in interest cost and a $0.2 reduction in amortization of net loss.< BR>      In September 2004, the EITF reached a final consensus on Issue 04-8, The Effect of Contingently Convertible Debt on Diluted Earnings per Share, addressing when the dilutive effect of contingently convertible debt with a market price trigger should be included in diluted earnings per share (EPS). According to the final consensus, these securities should be treated as convertible securities and included in dilutive EPS calculations (if dilutive) regardless of whether the market price trigger has been met. The EITF agreed that the final consensus is effective for all periods ending after December 15, 2004 and is applied by retroactively restating previously reported EPS. See Note 2 ¾ Earnings Per Share for a discussion of the Company's application of Issue 04-8.
     In December 2004, the FASB issued its standard on accounting for share-based payments, SFAS No. 123 (revised 2004), Share-Based Payment requiring companies to recognize compensation cost relating to share-based payment transactions in the financial statements. SFAS No. 123(R) requires the measurement of compensation cost to be based on the fair value of the equity or liability instruments issued. Public companies will be required to apply SFAS No. 123(R) as of the first interim or annual reporting period that begins after June 15, 2005. SFAS No. 123(R) covers a wide range of share-based compensation arrangements including share options, restricted share plans, performance-based awards, share appreciation rights and employee share purchase plans. SFAS No. 123(R) replaces SFAS No. 123, Accounting for Stock-Based Compensation, and supercedes APB Opinion No. 25, Accounting for Stock Issued to Employees. The Company is currently assessing the impact of SFAS No. 123(R) and considering the valuation models available. The Company expects to adopt SFAS No. 123(R) in its interim period ending September 24, 2005.
     On October 22, 2004, the American Jobs Creations Act of 2004 was signed into law. The bill creates a temporary incentive for U.S. corporations to repatriate accumulated income earned abroad by providing a dividends received deduction of 85% for certain dividends from controlled foreign corporations. The deduction is subject to a number of limitations and uncertainty remains as to how to interpret numerous of the bill's provisions. The Company is currently evaluating the effect of this new tax legislation on its financial position. See Note 9 ¾ Provision for Income Taxes, for further discussion.
     The FASB also recently issued Interpretation No. 46 (revised December 2003), Consolidation of Variable Interest Entities-an Interpretation of ARB No. 51, that became effective in fiscal year 2004 and which replaced FASB Interpretation No. 46, Consolidation of Variable Interest Entities. The adoption of this Interpretation did not have an impact on the Company's financial position.

Reclassifications Certain amounts have been reclassified to maintain comparability among the periods presented.

2.     Earnings Per Share

Basic earnings per share is computed based on the weighted average number of Common and Class B shares outstanding during a period. Diluted earnings per share reflect the assumed conversion of dilutive stock. In computing the per share effect of assumed conversion, funds which would have been received from the exercise of options were considered to have been used to repurchase Common shares at average market prices for the period, and the resulting net additional Common shares are included in the calculation of average Common shares outstanding.
     In a given period there may be outstanding stock options considered anti-dilutive as the options' exercise price was greater than the average market price of Common shares during that period and, therefore, excluded from the calculation of diluted earnings per share. Anti-dilutive stock options to purchase 1.1 million shares of Common stock at exercise prices ranging from $61.97 to $72.97 were outstanding at December 25, 2004. At December 27, 2003, anti-dilutive stock options to purchase 3.5 million shares of Common stock with exercise prices ranging from $40.31 to $72.97 were outstanding. At December 28, 2002, anti-dilutive stock options to purchase 6.3 million shares of Common stock were outstanding with exercise prices ranging from $35.38 to $72.97.
     In August 2003, the Company issued $160.0 variable-rate convertible senior notes (Old Notes) due in 2023. The outstanding Old Notes were convertible into shares of the Company's Common stock under certain conditions, including when the closing sale price of the Company's Common stock is greater than 120% of the initial conversion price of $61.44 for at least 20 trading days in a period of 30 consecutive trading days ending on the last trading day of a calendar quarter. None of the conditions that would have permitted conversion were satisfied during 2004 or 2003.
     In September 2004, the EITF reached a final consensus on Issue 04-8, The Effect of Contingently Convertible Debt on Diluted

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Earnings per Share, addressing when the dilutive effect of contingently convertible debt with a market price trigger should be included in diluted EPS. According to the final consensus, these securities should be treated as convertible securities and included in dilutive EPS calculations (if dilutive) regardless of whether the market price trigger has been met. The provisions of Issue 04-8 were effective for the Company's fiscal year ending December 25, 2004 (see Note 1 ¾ Accounting Policies).
     In December 2004, the Company completed its offer to exchange up to $160.0 of the Old Notes for an equal amount of its 2004 Senior Convertible Securities due 2023 (New Securities). The terms of the New Securities are primarily consistent with those of the Old Notes except that settlement upon conversion of the New Securities will be paid in cash up to the principal amount of the converted New Securities with any excess of the conversion value settled in shares of the Company's stock. An amount equal to $155.9 of the Old Notes, or 97.4% of the outstanding issue, was tendered in exchange for an equal amount of the New Securities. The exchange of the majority of the outstanding Old Notes has essentially eliminated the potential dilution under the provisions of Issue 04-8. The impact of the Old Notes on the diluted EPS calculation was an adjustment of less than $0.1 to net income for both 2004 and 2003 representing the interest and amortization expense attributed to the remainin g Old Notes and an increase in the effect of dilutive shares of approximately 67 thousand and 28 thousand for 2004 and 2003, respectively.

     The following table summarizes the amounts used to calculate basic and diluted EPS:

Dollar Amounts in Millions Except    Per Share Data	2004	2003	2002
Income Before Cumulative Effect    of Change in Accounting Principle	$159.6	$126.4	$72.5
Cumulative Effect of Change in    Accounting Principle, Net of Taxes	- -	(0.9)	- -
Net Income	$159.6	$125.5	$72.5
Weighted Average Basic Shares    Outstanding (000s)	52,670	53,019	53,832
Effect of Dilutive Shares (000s)	1,834	500	165
Weighted Average Diluted Shares    Outstanding (000s)	54,504	53,519	53,997
Basic Earnings Per Share	$ 3.03	$  2.37	$ 1.35
Diluted Earnings Per Share	$ 2.93	$  2.34	$ 1.34

3.     Business Segment and Geographic Information

The Company is organized on a regionally based management structure for commercial operations. The research and development and product supply functions of the Company are managed on a global basis. The Company's segments are the Americas region; the Europe, Middle East and Africa region (Europe); the Asia region; the Research, Development & Engineering organization and the Global Supply Chain organization.
     Operating income is the primary measure of segment income. No items below operating income are allocated to segments. Restructuring charges and charges related to certain significant events, although related to specific segments, are also excluded from management basis results. The accounting policies used to generate segment results are the same as the Company's overall accounting policies. Inter-segment sales were $666.9, $498.6 and $445.2 for the years ended December 25, 2004, December 27, 2003 and December 28, 2002, respectively. All inter-segment sales have been eliminated upon consolidation and have been excluded from the amounts in the tables on the following pages.
     Segment assets for the three geographic regions represent net trade receivables; net inventories; net property, plant and equipment; goodwill; net intangibles and other current and long-term assets. In the Research, Development & Engineering segment, assets are comprised of net property, plant and equipment and other current and long-term assets. Assets in the Global Supply Chain segment include net inventories; net property, plant and equipment; goodwill; net intangibles; other investments and other current and long-term assets. Corporate administration assets are mainly cash and cash equivalents; deferred income taxes; net property, plant and equipment and other current and long-term assets not allocated to other segments.

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Business Segment The following table presents sales and other financial information by business segment for the years 2004, 2003 and 2002:

	Net Sales	Operating Income	Depreciation and Amortization	Capital Expenditures	Assets 1
2004
Americas	$   955.5	$322.1	$   9.9	$   3.5	$   323.0
Europe	819.9	251.0	16.2	2.8	393.7
Asia	456.9	129.8	5.9	3.7	217.6
Research, Development &    Engineering	- -	(190.6)	5.4	12.5	50.9
Global Supply Chain	-	(149.3)	69.3	69.4	1,221.5
	2,232.3	363.0	106.7	91.9	2,206.7
Corporate administration	-	(83.4)	18.5	27.0	815.4
	$2,232.3	$279.6	$125.2	$118.9	$3,022.1
2003
Americas	$   901.3	$284.2	$  14.2	$   5.0	$   339.3
Europe	723.2	202.1	16.6	4.2	375.1
Asia	395.0	108.3	6.9	3.3	196.7
Research, Development &    Engineering	- -	(174.8)	6.0	8.1	50.8
Global Supply Chain	-	(116.7)	72.3	42.5	1,183.7
	2,019.5	303.1	116.0	63.1	2,145.6
Corporate administration	-	(68.2)	8.9	28.4	860.8
Restructuring reversal	-	6.3	-	-	-
Other significant charges 2	-	(5.6)	-	-	-
	$2,019.5	$235.6	$124.9	$ 91.5	$3,006.4
2002
Americas	$   844.1	$247.9	$  18.3	$   9.9	$   310.2
Europe	613.1	154.9	14.0	14.2	338.3
Asia	359.5	106.4	6.6	5.3	174.0
Research, Development &    Engineering	- -	(145.2)	6.6	13.1	48.7
Global Supply Chain	-	(107.2)	76.1	43.7	1,135.4
	1,816.7	256.8	121.6	86.2	2,006.6
Corporate administration	-	(58.1)	8.5	5.7	766.8
Net restructuring charges and    asset write-offs	- -	(49.0)	- -	- -	- -
	$1,816.7	$149.7	$130.1	$91.9	$2,773.4

1     Assets by business segment for 2004, 2003 and 2002 reflect the reallocation of goodwill as described in Note 5 ¾ Accounting for Goodwill and Intangibles.
²     Other significant charges in 2003 pertain to R&D expense associated with the acquisition of an early-stage pharmaceutical technology.

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     In each geographic segment, the Company markets products in five product categories: contact lens, lens care, pharmaceuticals, cataract and vitreoretinal, and refractive (see Note 1 ¾ Accounting Policies; Revenue Recognition for a discussion of specific products under each product category). There are no transfers of products between product categories. The following table presents sales by product category for the years 2004, 2003 and 2002:

	Net Sales
	2004	2003	2002
Contact Lens	$   675.2	$   591.8	$   523.9
Lens Care	521.9	498.9	465.5
Pharmaceuticals	524.7	467.9	396.1
Cataract and Vitreoretinal	358.3	327.9	301.8
Refractive	152.2	133.0	129.4
	$2,232.3	$2,019.5	$1,816.7

Geographic Region The following table presents sales and long-lived assets by geography for the years 2004, 2003 and 2002. Sales to unaffiliated customers represent net sales originating in entities physically located in the identified geographic area.

	U.S.	Non-U.S.	Consolidated
2004
Sales to unaffiliated customers	$859.8	$1,372.5	$2,232.3
Long-lived assets 1	795.8	834.4	1,630.2
2003
Sales to unaffiliated customers	$811.3	$1,208.2	$2,019.5
Long-lived assets 1	800.8	777.2	1,578.0
2002
Sales to unaffiliated customers	$761.8	$1,054.9	$1,816.7
Long-lived assets 1	813.5	673.3	1,486.8

1     Long-lived assets by geographic region for 2004, 2003 and 2002 reflect the reallocation of goodwill as described in Note 5 ¾ Accounting for Goodwill and Intangibles.

     The Company's operations in Japan generated more than 10% of total product net sales in 2004, totaling $226.5. No other non-U.S. country, or single customer, generated more than 10% of total product net sales during 2004, 2003 or 2002. Long-lived assets include net property, plant and equipment; goodwill and net intangibles; other investments and other assets. Of the total non-U.S. long-lived assets for 2004, 2003 and 2002, $286.1, $273.4 and $207.2, respectively, were located in France and $273.0, $258.1 and $215.3, respectively, were located in Germany. The long-lived assets located in France and Germany were comprised primarily of goodwill and other intangibles. In addition, $76.9, $68.9 and $69.8 of the total non-U.S. long-lived assets for 2004, 2003 and 2002, respectively, comprised primarily of net property, plant and equipment, were located in Ireland.

4.     Net Investment in Sales-Type and Operating Leases

Transactions that involve surgical equipment manufactured by the Company, whereby the Company grants temporary possession and use of that equipment to a customer, usually for a specified period of time that approximates the equipment's economic life at a periodic charge, are accounted for in accordance with SFAS No. 13, Accounting for Leases. The components of the Company's net investment in sales-type and operating leases as of December 25, 2004 and December 27, 2003 are as follows:

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Net Investment in Sales-Type Leases

	December 25, 2004	December 27, 2003
Total minimum lease payments to be received 1	$37.5	$19.4
Less amounts due from service agreements included    in total minimum lease payments	(2.8)	(0.7)
Less allowance for doubtful accounts 1	(0.6)	(0.5)
Net minimum lease payments receivable	34.1	18.2
Less unearned income 2	(2.5)	(0.9)
Net investment in sales-type leases	$31.6	$17.3

1     The current portion of minimum lease payments receivable and the related allowance for doubtful accounts are included in Trade receivables on the Balance Sheets. Minimum lease payments receivable and the related allowance for doubtful accounts due after one year are included with Other Long-Term Assets.
²     The current portion of unearned income is included in Accrued liabilities on the Balance Sheets. Unearned income due after one year is included with Other Long-Term Liabilities.

     Minimum future lease payments on sales-type leases are contractually due as follows: 2005, $15.2; 2006, $14.0; 2007, $6.9; 2008, $1.3; and 2009, $0.1.
     Net minimum lease payments receivable do not include contingent rentals which may be received under certain sales-type leases. Contingent rentals for 2004 amounted to $0.2. There were no contingent rentals on sales-type leases in 2003.

Net Investment in Operating Leases

	December 25, 2004	December 27, 2003
Equipment on operating lease	$16.5	$12.4
Less accumulated depreciation	(6.9)	(5.6)
Equipment on operating lease, net 1	$  9.6	$  6.8

1     Equipment on operating lease, net has been included in Property, Plant and Equipment, net on the Balance Sheets.

     Equipment on operating lease is depreciated for financial reporting purposes using the straight-line method based on its estimated useful life, as described in Note 1 ¾ Accounting Policies; Property, Plant and Equipment.
     Minimum future rentals on operating leases are contractually due as follows: 2005, $2.3; 2006, $1.4; 2007, $1.3; 2008, $0.8; 2009, $0.4 and none thereafter.
     Contingent rentals are received under certain operating leases. Contingent rentals for 2004 and 2003 amounted to $6.5 and $1.3, respectively.

5.     Accounting for Goodwill and Intangibles

The Company performs an impairment test of goodwill at least annually as required by SFAS No. 142, Goodwill and Intangible Assets. The impairment test compares the carrying value of the Company's reporting units to their respective fair values. The Company's business segments have been identified as the reporting units. Fair value is based on the average of the indications of value derived from the income and market approaches, weighted equally. The income approach measures the fair value by discounting expected cash flows by reporting unit to their present value at a rate of return that is commensurate with their inherent risk. The market approach measures the fair value by analyzing and comparing the operating performance and financial condition of public companies within the ophthalmic pharmaceutical industry and companies subject to similar market conditions adjusted for differences in profitability, financial position, products and markets.
     The Company completed its annual impairment test on each of its reporting units during the fourth quarters of 2004 and 2003. As the carrying value of goodwill for each of the Company's reporting units was less than their respective fair values, goodwill was not considered to be impaired. Fair value was determined using the same methodology employed during the initial application of SFAS No. 142.
     During February 2003, the Company acquired an additional 30% and 20% interest in its commercial and manufacturing joint ventures, respectively, located in Korea. This increased the Company's interest in the commercial and manufacturing joint ventures to 80% and 100%, respectively. The purchase price of $6.2 was first allocated to identifiable assets and liabilities based upon their respective fair values. The excess of the purchase price over the value of the identified assets and liabilities has been recorded as goodwill and is reflected in the table below.

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     The changes in the carrying amount of goodwill for the years ended December 27, 2003 and December 25, 2004 are as follows:

	Americas	Europe	Asia	Global Supply Chain	RD&E	Total
Balance as of December 28, 2002	$  47.0	$ 45.6	$ 8.8	$534.6	$  -	$636.0
Acquisition of additional interest in joint    ventures	- -	- -	3.5	- -	- -	3.5
Other (primarily currency effect)	0.2	5.2	0.9	63.3	-	69.6
Balance as of December 27, 2003	$  47.2	$ 50.8	$13.2	$597.9	$  -	$709.1
Currency effect	-	3.7	0.7	22.8	-	27.2
Balance as of December 25, 2004	$ 47.2	$  54.5	$13.9	$620.7	$  -	$736.3

     During the fourth quarter of 2004, the Company reevaluated its allocation of goodwill arising from vertically integrated acquisitions. The Company determined that a portion of the goodwill previously assigned to Global Supply Chain related to synergies realized by its commercial operations from vertically integrated acquisitions occurring prior to the beginning of its 2002 fiscal year. As such, the Company reallocated goodwill among Global Supply Chain, Americas, Europe and Asia using a relative fair value allocation approach. The revised carrying value of goodwill for each of the Company's reporting units was less than their respective fair values determined in connection with annual impairment tests completed during the fourth quarters of 2002, 2003 and 2004. The revised allocation has been reflected in all balances included in the previous table.

6.     Acquired Intangible Assets

The components of intangible assets as of December 25, 2004 and December 27, 2003 are as follows:

	December 25, 2004		December 27, 2003
	Gross Carrying Amount	Accumulated Amortization	Gross Carrying Amount	Accumulated Amortization
Trade names	$ 97.1	$ 36.7	$ 95.2	$ 27.7
Technology and patents	86.4	68.9	84.8	62.4
Developed technology	83.6	18.1	80.0	13.3
License agreements	39.8	18.5	36.4	13.7
Intellectual property	25.9	7.0	25.9	4.9
Physician information &    customer database	24.3	3.6	22.7	2.5
	$357.1	$152.8	$345.0	$124.5

     Amortization expense of intangibles was $24.9 and $25.6 for 2004 and 2003, respectively. Estimated amortization expense of intangibles presently owned by the Company for each of the next five succeeding fiscal years is as follows:

Fiscal Year Ending	Amount
December 31, 2005 December 30, 2006 December 29, 2007 December 27, 2008 December 26, 2009	$24.1 21.5 21.5 18.6 16.1

7.Related Party Transaction

In April 2003, the Company advanced $9.3 to Control Delivery Systems (CDS), then a partner in the development of implant technology for treating retinal and other back-of-the-eye diseases in which the Company has an equity interest. Such advances have been recoverable through the Company's ability to apply such amounts to future obligations due under an arrangement with CDS to provide research and development (R&D) activities as to certain technologies; the achievement of certain milestones such as the completion of clinical testing, NDA filings, and FDA approvals; royalty payments; or through cash repayment by CDS. In May

Page 42

2003, the Company and CDS announced a delay of up to three years in the regulatory filing for the diabetic macular edema indication for its proposed Retisert implant. The primary reason for the delay was the FDA's indication that it would require additional safety data before considering an application for approval for this indication. As a result, the Company reevaluated its role in the on-going development and approval process and decided to conduct and supervise directly the day-to-day development and clinical activities, after a brief transition period. Subsequently, the Company announced that it would not at this time pursue approval of the diabetic macular edema indication for the proposed Retisert implant.
     The Company now primarily bases the recoverability of the funds advanced on the future milestones and royalties or repayment by CDS, as CDS is no longer performing research and development activity on the Company's behalf. The achievement of the milestones giving rise to the Company's payment obligations and the eventual commercialization of the product are not completely controllable by the Company and are subject to the ordinary risks associated with the development and approval of any FDA regulated product. Therefore, the Company recorded a $4.1 reserve in the second quarter of 2003 to reflect this uncertainty. During the fourth quarter of 2003, the Company renegotiated its arrangement with CDS to formalize the change in the on-going development and approval process described above and as a result received $4.0 from CDS.
     In June 2004, the Company determined that it had incurred an obligation for an additional $3.0 milestone payment under the original agreement. As such, the $3.0 was applied against funds advanced resulting in a charge to R&D expenses. This charge was partially offset by a decrease in selling, administrative and general expenses to adjust the reserve established in the second quarter of 2003. There were no other changes in the Company's relationship or arrangement with CDS in 2004.

8.     Other Short- and Long-Term Investments

At December 29, 2001, the Company owned common stock in Charles River Laboratories, Inc., which represented the retention of a minority equity interest from the sale of the Charles River Laboratories business during 1999. This investment was classified as available-for-sale under SFAS No. 115, Accounting for Certain Investments in Debt and Equity Securities. During 2001, approximately 1,300,000 shares or 51.0% of the Company's original minority equity interest were sold, resulting in realized gains of $12.6, net of taxes. As of December 29, 2001, the investment was valued at $41.9. A resulting unrealized holding gain of $20.9, net of taxes, recorded at December 29, 2001, is reflected in the Statements of Changes in Shareholders' Equity. During the first quarter of 2002, the Company liquidated its remaining shares and recorded a realized gain of $18.1, net of taxes.

9.     Provision for Income Taxes

An analysis of the components of income before income taxes and minority interest and the related provision for income taxes is presented below:

	2004	2003	2002
(Loss) income before      income taxes and minority interest
U.S.	$(42.1)	$(36.4)	$(70.9)
Non-U.S.	288.9	233.4	207.9
	$246.8	$197.0	$137.0
Provision for income taxes
Federal
Current	$   8.2	$   7.5	$  13.7
Deferred	(14.6)	(7.7)	(19.9)
State
Current	1.9	2.3	2.2
Deferred	(1.0)	(3.1)	(2.4)
Foreign
Current	78.6	87.1	58.0
Deferred	9.6	(19.1)	(4.4)
	$  82.7	$  67.0	$  47.2

     Deferred taxes, detailed below, recognize the impact of temporary differences between the amounts of assets and liabilities

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recorded for financial statement purposes and such amounts measured in accordance with tax laws. Realization of the tax loss benefits ($4.4 of non-U.S. net operating loss benefits and $14.3 of U.S. state net operating and capital loss benefits as of December 25, 2004) and credit carryforwards ($83.2 as of December 25, 2004, $37.9 of which is related to foreign tax credits and $45.3 related to U.S. federal and state credits), $90.8 of which expire between 2005 and 2024, and $11.1 which have no expiration, is contingent on future taxable income in the appropriate jurisdictions and of the appropriate character. Valuation allowances have been recorded for such deferred tax assets, which may not be realized. In general, each deferred tax asset, including carryforwards, is reviewed for expected utilization, and valuation allowances are established to reduce the deferred tax assets to their net realizable value to the extent that it is more likely than not that some portion or all of the deferred tax assets will not be realized, based on the character of the carryforward item (credit, loss, etc.), the associated taxing jurisdiction (U.S., state, non-U.S., etc.), the relevant history for the particular item, the applicable expiration dates, operating projects that would impact utilization, and identified actions under the control of the Company in realizing the associated carryforward benefits. Additionally, the Company's utilization of U.S. foreign tax credit and state investment credit carryforwards is dependent on related statutory limitations that involve numerous factors beyond overall positive income, all of which have been taken into account by the Company in its evaluation. The Company assesses the available positive and negative evidence surrounding the recoverability of the deferred tax assets and applies its judgment in estimating the amount of valuation allowance necessary under the circumstances. The Company continues to assess and evaluate strategies that will enable the carryforwards to be utilized, a nd will reduce the valuation allowance appropriately for each item at such time when it is determined that the "more likely than not" approach is satisfied for the related item, or portion thereof. Net increases to the valuation allowance were $5.7, $1.4 and $1.8 in 2004, 2003 and 2002, respectively.

		Deferred Taxes December 25, 2004		Deferred Taxes December 27, 2003
	Assets		Liabilities		Assets	Liabilities
Current:
Sales and allowance accruals	$  37.9		$        -		$  30.9	$       -
Employee benefits and compensation	27.4		-		17.6	-
Inventories	10.9		-		5.7	-
Unrealized foreign exchange transactions	6.1		0.2		12.5	-
Other accruals	4.4		1.9		10.0	1.7
Valuation allowance	(17.8)		-		(13.6)	-
	$  68.9		$   2.1		$  63.1	$    1.7
Non-current:
Tax loss and credit carryforwards	$101.9		$       -		$103.9	$       -
Employee benefits and compensation	31.6		-		36.1	-
Depreciation and amortization	79.9		73.8		65.1	56.9
Other accruals	7.4		1.3		-	13.1
Valuation allowance	(45.1)		-		(43.6)	-
Intercompany investments	-		162.8		-	195.9
	175.7		237.9		161.5	265.9
	$244.6		$240.0		$224.6	$267.6

     Reconciliation of the statutory U.S. federal income tax rate to the effective tax rates for continuing operations are as follows:

	2004	2003	2002
Statutory U.S. tax rate	35.0%	35.0%	35.0%
Valuation allowance	2.4	0.5	1.5
State income taxes, net of federal tax benefit	0.2	(0.9)	(0.1)
Extraterritorial income exclusion benefit	(1.3)	(0.8)	(0.6)
Difference between non-U.S. and U.S. tax rates	(1.8)	4.2	0.6
Orphan drug credit	(2.1)	(2.6)	(2.5)
Other	1.1	(1.4)	0.6
Effective tax rate	33.5%	34.0%	34.5%

     Statutory expiration or legislative rescission of the orphan drug or other credits currently benefiting the Company could have an adverse impact on the Company's effective tax rate.
     At December 25, 2004, income considered to be permanently reinvested in non-U.S. subsidiaries totaled approximately $959.7.

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Deferred income taxes have not been provided on this income, as the Company does not plan to initiate any action that would require the payment of income taxes. It is not practicable to estimate the amount of additional tax that might be payable on this undistributed foreign income.
     On October 22, 2004, the American Jobs Creation Act of 2004 was signed into law. The bill creates a temporary incentive for U.S. corporations to repatriate accumulated income earned abroad by providing a dividends received deduction of 85% for certain dividends from controlled foreign corporations. The deduction is subject to a number of limitations and uncertainty remains as to how to interpret numerous of the bill's provisions. As such, the Company is not yet in a position to decide on whether, and to what extent, the Company might repatriate foreign earnings that have not yet been remitted to the U.S. Based on analysis to date, the range of possible amounts that the Company is considering for repatriation is between $0 and $805, with the respective tax liability ranging from $0 to $60. Assuming Congress and the U.S. Treasury issue the necessary clarifications in the first quarter of 2005, the Company expects to be in a position to finalize its assessment by the end of the sec ond quarter of 2005.

10.     Debt

The Company had no short-term notes payable at December 25, 2004 and December 27, 2003.To support its liquidity requirements, the Company generally maintains U.S. revolving credit agreements. In January 2003, the Company entered into a $400 syndicated revolving credit agreement. Under the terms of this agreement, the facility was reduced to $250 effective August 4, 2003 when the Company completed the issuance of $210 of notes and convertible notes. The facility includes covenants that require the Company to maintain certain EBITDA to interest and debt ratios. In the event of violation of the covenants, the facility would not be available for borrowing until the covenant provisions were waived, amended or satisfied. There were no covenant violations during 2004 or 2003 and the Company does not anticipate that a violation of these covenants is likely to occur. The interest rate under the agreement is based on the Company's credit rating and, at the Co mpany's option, LIBOR or the base rate of one of the lending banks. There were no outstanding borrowings under syndicated revolving credit agreements as of December 25, 2004 or December 27, 2003. In addition, a number of subsidiary companies outside the U.S. have credit facilities to meet their liquidity requirements. There were no outstanding borrowings under these non-U.S. credit facilities as of December 25, 2004 or December 27, 2003.
     Average short-term interest rates were 6.3% and 6.4% for the years ended 2004 and 2003, respectively. The maximum amount of short-term debt at the end of any month was $0.1 in 2004 and $2.6 in 2003. Average short-term month-end borrowings were less than $0.1 in 2004 and $0.5 in 2003.
     The components of long-term debt were:

		Principal Outstanding
	Coupon Interest Rate Percentage	December 25, 2004	December 27, 2003
Fixed rate notes
Notes due in 2004 1	6.75	$       -	$194.6
Notes due in 2005 2	6.50	100.0	100.0
Notes due in 2007 3, 4	6.95	150.0	150.0
Notes due in 2008 3, 5	5.90	50.0	50.0
Debentures due in 2028 3	7.13	183.9	183.9
Variable rate and other borrowings
Convertible Senior Notes due in 2023 6, 7	1.64	4.1	160.0
Senior Convertible Securities due in 2023 7	1.64	155.9	-
Other	Various	0.2	8.5
		644.1	847.0
Less current portion		(100.8)	(195.0)
		$543.3	$652.0

1     The net effective rate, including issuance costs and proceeds from a swap termination was 4.19%. The debt was repaid during December 2004.
²     Notes contained a put/call option exercisable at 100% of par in 2005. The Company had also entered into a remarketing agreement which allowed the agent to call the debt from the holders on the option exercisable date, and then remarket them. If the rights were exercised, the coupon rate paid by the Company would reset to a rate higher than the then current market rate. Following the Company's debt rating downgrade by Moody's Investors Service during March 2002, the agents exercised their right to put the remarketing agreement back to the Company. As a result, the debt will mature in 2005. Net remarketing option expense and interest rate swap proceeds were deferred and are being amortized to interest expense over the remaining life of the debt, resulting in a net effective rate, including issuance costs, of 6.29%.
³     The Company, at its option, may call these notes/debentures at any time pursuant to a make-whole redemption provision, which would compensate holders for

Page 45

any changes in interest rate levels of the notes/debentures upon early extinguishment. The Company currently has no intention to call these notes/debentures.
⁴     In May 2002, the Company entered into an interest rate lock agreement to hedge the benchmark interest rate associated with this debt issue. Losses associated with the hedge have been deferred to other comprehensive income and are being amortized to interest expense over the remaining life of the debt, resulting in a net effective rate, including issuance costs, of 8.63%.
⁵     In August 2003, simultaneous with the issuance of this debt maturing in 2008, an interest rate swap agreement converted this note to a variable-rate liability at a rate of six-month LIBOR plus 2.37%, which was 4.36% and 3.52% at December 25, 2004 and December 27, 2003, respectively. Also in May 2002, the Company entered into an interest rate lock agreement to hedge the benchmark interest rate associated with this debt issue. Losses associated with the hedge have been deferred to other comprehensive income and are being amortized to interest expense over the debt term. The combination of the interest rate swap and the rate lock resulted in a net effective rate, including issuance costs, of 6.56% and 5.75% at December 25, 2004 and December 27, 2003, respectively.
⁶     These notes accrue interest at six-month LIBOR plus 0.5%, with the rate reset on a semiannual basis in advance. The initial coupon interest rate was 1.64%, the coupon interest rate as of December 25, 2004 was 2.49%. The net effective rate, including issuance costs, at December 25, 2004 and December 27, 2003 was 2.89% and 2.00%, respectively.
⁷     In December 2004, the Company completed an offer to exchange up to $160.0 of the variable-rate convertible senior notes due in 2023 (Old Notes) for an equal amount of its 2004 Senior Convertible Securities due 2023 (New Securities). The terms of the New Securities are primarily consistent with those of the Old Notes except that settlement upon conversion of the New Securities will be paid in cash up to the principal amount of the converted New Securities with any excess of the conversion value settled in shares of the Company's stock. An amount equal to $155.9 of the Old Notes, or 97.4% of the outstanding issue, was tendered in exchange for an equal amount of the New Securities. The New Securities accrue interest at six-month LIBOR plus 0.5%, with the rate reset on a semiannual basis in advance. The initial net effective rate for the New Securities, including issuance and exchange costs, at December 25, 2004 was 2.89%.

     In November 2002, the Company issued $150.0 of five-year 6.95% fixed-rate senior notes under a $500.0 Shelf Registration filed with the Securities and Exchange Commission in June 2002. Proceeds from the offering were used for general corporate purposes, including the refinancing of existing debt obligations. In August 2003, the Company issued $210.0 in concurrent offerings of notes and convertible notes. The first offering was a $50.0 public offering of five-year fixed-rate senior notes with a coupon rate of 5.90%, also issued under the $500.0 Shelf Registration ($300.0 of which remained available for issuance). The Company simultaneously executed an interest rate swap agreement effectively converting the $50.0 of fixed-rate notes to a variable rate. The effective cost of the notes, which includes both the impact of the interest rate swap and the settlement of a $50.0 cash flow hedge designated to hedge the benchmark interest rate in connection with the of fering, was 6.56% and 5.75% at December 25, 2004 and December 27, 2003, respectively. The second offering was a $160.0 placement of variable-rate convertible senior notes due in 2023. The notes accrue interest at six-month LIBOR plus 0.5% with the rate reset on a semiannual basis in advance. The initial interest rate was 1.64%; the coupon rate as of December 25, 2004 was 2.49%. The notes will be convertible into shares of the Company's Common stock under certain conditions, such as when the closing sale price of the Company's Common stock is greater than 120% of the initial conversion price of $61.44 per share for at least 20 trading days in a period of 30 consecutive trading days ending on the last trading day of a calendar quarter. The conversion price represented a 50% premium over the closing price of the Company's Common stock on the date the notes were offered. On October 30, 2003, the Company filed a Registration Statement on Form S-3 with the Securities and Exchange Commission in satisfaction of cert ain registration rights granted to the holders of the $160.0 convertible notes. The registration became effective on January 8, 2004. In connection with the sale of the convertible notes, the Company repurchased one million shares of its Common stock during August 2003 at an average price per share of $40.96. The Company used the remaining proceeds of the offerings primarily to refinance existing debt obligations.
     In December 2004, the Company completed its offer to exchange up to $160.0 of the variable-rate convertible senior notes due in 2023 (Old Notes) for an equal amount of its 2004 Senior Convertible Securities due 2023 (New Securities). The terms of the New Securities are largely consistent with those of the Old Notes except that settlement upon conversion of the New Securities will be paid in cash up to the principal amount of the converted New Securities with any excess of the conversion value settled in shares of the Company's stock. An amount equal to $155.9 of the Old Notes, or 97.4% of the outstanding issue, was tendered in exchange for an equal amount of the New Securities.
     During 2004, the Company retired $194.6 of various notes due in 2004. During 2003, the Company retired $200.7 of various notes due in 2003, 2015, 2026 and 2028. Interest rate swap agreements on long-term debt issues resulted in a decrease in the long-term effective interest rate from 6.15% to 5.70% in 2004 and from 6.53% to 5.86% in 2003. At December 25, 2004 and December 27, 2003, the Company had $50.0 of outstanding interest rate swaps. Long-term borrowing maturities during the next five years are $100.8 in 2005, $0.7 in 2006, $150.6 in 2007, $50.1 in 2008 and $0.1 in 2009.

11.     Accounting for Derivatives and Hedging Activities

In accordance with SFAS No. 133, Accounting for Derivative Instruments and Hedging Activities, the Company records all derivative instruments on the balance sheet at their respective fair values. Changes in the fair value of derivatives are recorded each period in current income unless the instruments have been designated as cash flow or net investment hedges, in which case such changes are recorded in other comprehensive income. The Company does not apply hedge accounting to contracts utilized to offset foreign exchange exposures related to foreign currency denominated assets and liabilities because they are marked to market through income at the same time that the exposed asset/liability is remeasured through income; both are recorded in foreign exchange loss (gain).

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     Derivative gains and losses attributable to hedge ineffectiveness are also recorded in current earnings. For instruments designated as either fair value or cash flow hedges, net interest expense of $0.2 and $1.6 was recognized for hedge ineffectiveness for the years ended December 27, 2003 and December 28, 2002, respectively. Hedge ineffectiveness had no impact on income for the year ended December 25, 2004.

Fair Value Hedges In August 2003, the Company issued $210.0 in concurrent offerings of notes and convertible notes. The first was a $50.0 public offering of five-year fixed-rate senior notes with a coupon rate of 5.90%. The Company simultaneously executed a $50.0 interest rate swap agreement under which the Company receives interest at a fixed rate and pays interest at a variable rate. This swap is designated as a fair value hedge effectively converting the fixed-rate notes to a variable rate of interest, and was outstanding at December 25, 2004 and December 27, 2003. The second offering was a $160.0 placement of variable-rate convertible senior notes due in 2023 (see Note 10 ¾ Debt for a discussion regarding the exchange of $155.9 principal amount of these notes for new Senior Convertible Securities due in 2023), containing two embedded derivatives, a bond parity clause and a contingent interest provision. The fair value of the embedded derivatives contained in both the $155.9 exchanged securities and the $4.1 original issue notes was $0.0 at December 25, 2004 and December 27, 2003.

Cash Flow Hedges During 2002, to hedge interest payments on forecasted borrowings, the Company entered into, extended and re-designated an interest rate lock agreement in the notional amount of $200.0 which was designated as a cash flow hedge of ten semi-annual interest payments based on the benchmark interest rate related to changes in the five-year U.S. Treasury rate. On November 18, 2002, the Company issued $150.0 of fixed-rate debt and the proportionate amount associated with the cash flow hedge was recorded to other comprehensive income and is being amortized to interest expense in the period in which interest expense related to the hedged debt is recognized. The remaining $50.0 of the cash flow hedge was re-designated to hedge the benchmark interest rate associated with ten semi-annual interest payments on future forecasted borrowings and was settled during the first quarter of 2003. Simultaneous with the hedge settlement, the Company entered into a new $50.0 cash flow hedge, which was design ated to hedge the benchmark interest rate associated with ten semi-annual interest payments on future forecasted borrowings. This $50.0 cash flow hedge was settled in July 2003 in conjunction with the Company's $50.0 public offering of five-year fixed-rate senior notes. The amount associated with the 2003 settlements was recorded to other comprehensive income and is being amortized to interest expense in the period in which interest expense related to the hedged debt is recognized.
     The Company utilizes forward contracts to hedge foreign currency exposure associated with intercompany loans. The Company designated as a cash flow hedge forward contracts in the notional amounts of $41.0 and $43.3 at December 25, 2004 and December 27, 2003, respectively to hedge foreign currency exposure associated with an intercompany loan denominated in Japanese yen. During the third quarter of 2003, the Company permanently invested an intercompany loan in its Europe region. This permanent investment eliminated the ongoing exposure of principal and interest payments to fluctuations in foreign currency exchange rates and therefore the need to hedge such exposure.
     Reclassifications from other comprehensive income into income for cash flow hedge transactions were net losses of $1.9, $1.7 and $3.6 for the years ended December 25, 2004, December 27, 2003 and December 28, 2002, respectively. As of December 25, 2004 an estimated $3.3 pre-tax loss was expected to be reclassified into income over the next twelve months.

Net Investment Hedges At December 25, 2004 and December 27, 2003, the Company had designated foreign denominated intercompany loans with notional amounts of $194.9 and $180.8, respectively, as hedges of foreign currency exposure associated with net investments in non-U.S. subsidiaries. For derivatives designated as hedging instruments to hedge foreign currency exposures of net investments in non-U.S. subsidiaries, net after-tax hedging losses of $9.4, $13.7 and $3.5 were included in the cumulative translation adjustment in the years ended December 25, 2004, December 27, 2003 and December 28, 2002, respectively.

Page 47

12.     Financial Instruments

The carrying amount of cash and cash equivalents approximates fair value, as maturities are less than one year in duration. The Company's remaining financial instruments consisted of the following:

	December 25, 2004		December 27, 2003
	Carrying Value	Fair Value	Carrying Value	Fair Value
Non-derivatives
Other investments	$     5.5	$     5.5	$     6.1	$     6.1
Long-term debt, including current portion	(644.1)	(718.2)	(847.0)	(897.4)
Derivatives held for purposes other than trading
Foreign exchange instruments
Other current assets	$     8.1	$     8.1	$     8.0	$     8.0
Accrued liabilities	(6.5)	(6.5)	(6.9)	(6.9)
Net foreign exchange instruments	$     1.6	$      1.6	$     1.1	$      1.1
Interest rate instruments
Other current assets	$        -	$         -	$     0.6	$     0.6
Accrued liabilities	(0.1)	(0.1)	-	-
Net interest rate instruments	$   (0.1)	$   (0.1)	$     0.6	$     0.6

     Fair value of other investments was determined based on contract terms and an evaluation of expected cash flows and investment risk. Fair value of long-term debt was estimated using either quoted market prices for the same or similar issues or current rates offered to the Company for debt with similar maturities. The fair value of foreign exchange and interest rate instruments was determined using a model that estimates fair value at market rates, or was based upon quoted market prices for similar instruments with similar maturities.
     The Company enters into forward foreign exchange contracts primarily to offset foreign exchange exposures related to foreign currency transactions and equity investments in non-U.S. subsidiaries. At December 25, 2004 and at December 27, 2003, the Company managed aggregate exposures of $692.2 and $408.5, respectively, by entering into forward foreign exchange contracts requiring the purchase or sale of U.S. and foreign currencies. The Company selectively hedges firm commitments that represent both a right and an obligation, mainly for committed purchase orders for foreign-sourced inventory.
     At December 25, 2004 and at December 27, 2003, the Company was party to interest rate instruments that had aggregate notional amounts of $50.0.
     Counterparties to the financial instruments discussed above expose the Company to credit risks to the extent of non-performance. The credit ratings of the counterparties, which consist of a diversified group of major financial institutions, are regularly monitored and thus credit loss arising from counterparty non-performance is not anticipated.

13.     Employee Benefits

The Company's benefit plans, which in the aggregate cover substantially all U.S. employees and employees in certain other countries, consist of defined benefit pension plans, a participatory defined benefit postretirement plan and defined contribution plans.

Pension and Postretirement Benefit Plans The fair value of plan assets in the Company's U.S. defined benefit pension plan represent approximately 72% of the fair value of all defined benefit pension plan assets as of December 25, 2004. The plan is a noncontributory defined benefit pension plan covering eligible salaried and hourly employees. Under the plan's current formula, each participant earns a benefit, payable at normal retirement age, expressed as an account balance that is credited annually with a percent of a participant's compensation and stated interest. In October 2004, the Company's Board of Directors passed a resolution to freeze the plan effective December 31, 2004. After December 31, 2004, no new participants will be accepted into the plan and no current participants will accrue any additional benefits except for an interest allocation on the December 31, 2004 account balance. All of the pension benefits that have already been earned up to December 31, 2004, however, will be preserv ed and will be

Page 48

paid out when due in accordance with the normal provisions of the plan. During the fourth quarter of 2004, the Company recognized a $1.8 curtailment loss associated with the freezing of the pension plan which is reflected in the table below entitled Net Periodic Benefit Cost.
     The Company's postretirement benefit plan provides life and medical insurance benefits to participating employees of the Company upon retirement. Upon meeting the eligibility requirements based on age and years of service, retirees and their eligible dependents are able to retain medical and life insurance after retirement. Contributions necessary to fund benefits under the plan are made by the Company. Retirees are required to pay for a portion of the coverage provided at retirement, based upon their years of service. In October 2004, the Company's Board of Directors passed a resolution amending the plan to eliminate Company contributions to postretirement medical and life insurance coverage for participants who do not meet the minimum requirements of age and service on January 1, 2005. However, future retirees who do not meet the minimum requirements of age and service on January 1, 2005, but who attain age 55 and 10 years of service, will be eligible, at retirement, to purcha se retiree medical insurance through the Company. During the fourth quarter of 2004, the Company recognized a $0.7 curtailment gain associated with the elimination of coverage for those ineligible employees which is reflected in the table below entitled Net Periodic Benefit Cost.
     In December 2003, the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (the Act) was signed into law. The Act introduces a prescription drug benefit under Medicare, as well as a federal subsidy to sponsors of retiree health care benefits plans that provide a benefit that is at least actuarially equivalent to Medicare Part D. The Company adopted the provisions of FSP FAS 106-2 as of July 1, 2004 which provides final accounting guidance related to the Act (see New Accounting Guidance in Note 1 ¾ Accounting Policies). The FSP requires companies to record any expected amount of subsidy under the Act as an actuarial gain to be amortized into income over the average working life of the Company's employees. The reduction in the accumulated postretirement benefit obligation related to benefits attributed to past service was $12.6 as of the date of adoption. The reduction in current period service cost due to the subsidy was $0.8 in 2004, which includes a $0.2 reduction in service cost, a $0.4 reduction in interest cost and a $0.2 reduction in amortization of net loss.
     Components of net periodic benefit cost, benefit obligation, change in plan assets, asset allocation and funded status are summarized below for the Company's U.S. and major non-U.S. pension plans and the postretirement plan. For 2004 and 2003, the funded status of the pension and postretirement plans presented herein were measured as of December 31.

Net Periodic Benefit Cost Components of net periodic benefit cost and weighted-average assumptions used to determine net periodic cost for the plans for fiscal years 2004, 2003 and 2002 were as follows:

	Pension Benefit Plans			Postretirement Benefit Plan
	2004	2003	2002	2004	2003	2002
Service cost	$15.0	$13.0	$12.2	$ 1.6	$ 1.4	$ 1.0
Interest cost	19.1	18.4	17.9	4.9	5.9	6.1
Expected return on plan assets	(20.3)	(16.6)	(19.3)	(3.1)	(2.6)	(3.4)
Amortization of transition obligation	0.1	0.2	0.4	-	-	-
Amortization of prior-service cost	0.5	2.2	0.7	(0.1)	(0.1)	(0.1)
Amortization of net loss	6.1	7.5	2.0	-	0.3	-
Net periodic benefit cost	20.5	24.7	13.9	3.3	4.9	3.6
Curtailment loss (gain)	1.8	0.4	0.7	(0.7)	-	-
Settlement loss	-	0.3	-	-	-	-
Net periodic cost after curtailment	$22.3	$25.4	$14.6	$2.6	$ 4.9	$ 3.6

    The 2004 curtailment loss in the Pension Benefit Plans related to the freezing of the Company's U.S. defined benefit pension plan. The 2004 curtailment gain in the Postretirement Benefit Plan was associated with the elimination of Company contributions to postretirement medical and life insurance coverage for participants who do not meet the minimum requirements of age and service on January 1, 2005. The 2003 curtailment and settlement losses in Pension Benefit Plans related to making lump-sum payments to the participants of one of the Company's foreign plans which is expected to have a final settlement in 2006. The 2002 curtailment loss in Pension Benefit Plans related to the restructuring actions taken in 2002.

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     Weighted Average Assumptions

	Pension Benefit Plans			Postretirement Benefit Plan
	2004	2003	2002		2004	2003	2002
U.S. Benefit Plans:
Discount rate	6.00%	6.75%	7.50%		6.00%	6.75%	7.50%
Expected return on plan assets	9.00%	9.00%	10.00%		8.00%	8.00%	9.00%
Rate of compensation increase	4.00%	4.25%	5.00%		4.00%	4.25%	5.00%
Non-U.S. Pension Benefit Plans: 1
Discount rate	4.90%	5.23%	5.04%
Expected return on plan assets	6.12%	6.07%	5.85%
Rate of compensation increase	3.09%	3.05%	3.77%

1     The Company does not have non-U.S. postretirement benefit plans.

     For the Company's U.S. Pension Plan, the expected return is 9.0%. Passively managed portfolios with asset allocations similar to the Company's U.S. Pension Plan would have earned in the 11% - 13% range over the last 10, 20 and 30 years. In view of low current interest rates and the recent performance of the equity markets over the last several years, the Company believes that Plan returns over the near term may not achieve historical returns.

Benefit Obligation The tables below present components of the change in benefit obligation and the weighted average assumptions used to determine the benefit obligation for the two-year period ended December 25, 2004.

     Change in Benefit Obligation

	Pension Benefit Plans			Postretirement Benefit Plan
	2004	2003	2004		2003
Obligation at beginning of year	$343.9	$292.6	$96.5		$90.1
Service cost	15.0	13.0	1.6		1.4
Interest cost	19.1	18.4	4.9		5.9
Participant contributions	1.6	1.3	1.5		-
Plan amendments	-	1.6	-		-
Currency translation adjustments	8.8	12.6	-		-
Curtailment (gain) loss	(16.5)	0.1	(2.7)		-
Benefit payments	(20.0)	(22.9)	(10.0)		(8.8)
Settlement payments	-	(1.0)	-		-
Actuarial loss (gain)	24.0	28.2	(13.1)		7.9
Obligation at end of year	$375.9	$343.9	$78.7		$96.5

     The accumulated benefit obligation for the Company's pension benefit plans was $356.5 and $306.4 at December 25, 2004 and December 27, 2003, respectively. For the Company's postretirement benefit plan the accumulated benefit obligation was $78.7 and $96.5 at December 25, 2004 and December 27, 2003, respectively.

     Weighted Average Assumptions

	Pension Benefit Plans			Postretirement Benefit Plan
	2004	2003	2004		2003
U.S. Benefit Plans:
Discount rate	5.75%	6.00%	5.75%		6.00%
Rate of compensation increase	-	4.00%	4.00%		4.00%
Non-U.S. Pension Benefit Plans: 1
Discount rate	4.43%	4.87%
Rate of compensation increase	3.41%	3.02%

Page 50

1     The Company does not have non-U.S. postretirement benefit plans.

     Assumed health care cost trend rates have a significant effect on the amounts reported as postretirement benefits. For 2004, an 11% annual rate of increase in the per capita cost of covered health care benefits for all participants was assumed. The trend rate grades down by 1.0% per year to an ultimate annual rate of 5.0% in 2013. To demonstrate the significance of this rate on the expense reported, a one-percentage point change in the assumed health care cost trend rate would have the following effect:

	1% Increase	1% Decrease
Effect on total service and interest cost components of    net periodic postretirement health care benefit cost	$0.8	$(0.7)
Effect on the health care component of the accumulated    postretirement benefit obligation	7.7	(6.1)

Plan Assets The table below presents components of the change in plan assets for the two-year period ended December 25, 2004.

	Pension Benefit Plans			Postretirement Benefit Plan
	2004	2003	2004		2003
Fair value of plan assets at beginning of year	$239.0	$206.6	$37.0		$33.3
Actual gain or (loss) on plan assets	31.1	38.3	6.8		4.5
Employer contributions	25.2	8.7	8.3		8.0
Participant contributions	1.6	1.3	1.5		-
Benefit payments	(20.0)	(22.9)	(10.0)		(8.8)
Settlement payments	-	(1.0)	-		-
Currency translation adjustments	4.8	8.0	-		-
Fair value of plan assets at end of year	$281.7	$239.0	$43.6		$37.0

     The Company's funding policy for its pension plans is to make contributions that meet or exceed the minimum funding statutory requirements. These contributions are determined based upon actuarial valuation recommendations made by the actuary under accepted actuarial principles. Company contributions for its postretirement plan are made at intervals and in amounts determined by the plan administrator, based on actual claims incurred and reported by participants and providers. The Company expects to contribute up to $13.0 to all pension benefit plans and $7.0 to its postretirement benefit plan in 2005.

     Estimated future benefit payments, which reflect expected future service, as appropriate, are to be paid as follows:

		Postretirement Benefit Plan
Fiscal Year Ending	Pension Benefit Plans	Benefit Payments	Subsidy Receipts
December 31, 2005	$19.1	$7.4	$   -
December 30, 2006 1	45.1	7.3	0.8
December 29, 2007	20.2	7.3	0.8
December 27, 2008	21.4	7.2	0.8
December 26, 2009	23.9	7.1	0.8
Fiscal years 2010 - 2014	133.4	34.0	3.7

1     The 2006 future benefits for the pension benefit plans include a $26.1 payment in connection with one of the Company's foreign plans expected to have a final settlement in 2006.

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     The weighted average asset allocations for the two-year period ended December 25, 2004, by asset category, are as follows:

	Pension Benefit Plans		Postretirement Benefit Plan
	2004	2003	2004	2003
U.S. Pension Benefit Plans:
Equity securities	74%	71%	97%	97%
Fixed income (debt) securities	26%	29%	3%	3%
Total	100%	100%	100%	100%
Non-U.S. Pension Benefit Plans: 1
Equity securities	65%	66%
Fixed income (debt) securities	19%	17%
Other	16%	17%
Total	100%	100%

1     The Company does not have non-U.S. postretirement benefit plans.

     The Company's U.S. Pension Plan has a target asset allocation of 60% U.S. equity securities, 10% non-U.S. equity securities and 30% fixed income (debt) securities. Approximately 70% of U.S. equity securities are passively managed; the remainder of Plan assets are actively managed.
     U.S. equity securities are diversified among large-, mid- and small-cap value and growth strategies. Non-U.S. equity securities are invested in a broad range of equity securities diversified among equity style and geographic location. Fixed income (debt) securities are invested in investment grade bonds and similar instruments.
     Equity securities shown above for both 2004 and 2003 include 52,800 shares of the Company's Common stock with a market value of $3.4 (1.8% of total plan assets) and $2.7 (1.5% of total plan assets) at December 25, 2004 and December 27, 2003, respectively.

Funded Status The table below presents components of the funded status for the two-year period ended December 25, 2004.

		Pension Benefit Plans			Postretirement Benefit Plan
	2004		2003	2004		2003
Fair value of plan assets	$281.7		$239.0	$ 43.6		$ 37.0
Benefit obligation	375.9		343.9	78.7		96.5
Funded status at end of year	(94.2)		(104.9)	(35.1)		(59.5)
Unrecognized transition obligation	0.4		0.5	-		-
Unrecognized prior-service cost (benefit)	0.1		2.4	(1.5)		0.4
Unrecognized actuarial loss	84.2		90.5	1.0		17.8
Net amount recognized at end of year	$  (9.5)		$  (11.5)	$(35.6)		$(41.3)

     The following table provides the amounts recognized in the balance sheets as of the end of each year:

	Pension Benefit Plans		Postretirement Benefit Plan
	2004	2003	2004	2003
Prepaid benefit cost	$       -	$   2.2	$       -	$       -
Accrued benefit liability	(74.9)	(78.2)	(35.6)	(41.3)
Intangible asset	0.6	2.1	-	-
Accumulated other comprehensive income	64.8	62.4	-	-
Net amount recognized at end of year	$  (9.5)	$(11.5)	$(35.6)	$(41.3)

     The following table provides information related to the Company's underfunded pension plans:

	2004	2003
Projected benefit obligation	$375.9	$299.8
Accumulated benefit obligation	356.5	275.8
Fair value of plan assets	281.7	199.6

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     The Company's postretirement benefit plan was underfunded for each of the past two years.

Defined Contribution Plans The Company sponsors a 401(k) plan which is a defined contribution plan covering substantially all U.S. employees of the Company. Employees may elect to participate in the plan on their date of hire if they are scheduled to work at least 1,000 hours per plan year. In general, participants' contributions, up to 3% of compensation, qualified for 100% Company match and 50% Company match for the next 2% of participant contributions. Additionally, for all participants who have completed one year of eligible service, the Company provided a base contribution of 0.5% of a participant's eligible compensation. Effective January 1, 2005, the Company will increase its match to 150% for participant contributions up to 5% of compensation. The Company's base contribution will increase to 2.5% of a participant's eligible compensation. The 401(k) will become the Company's principle vehicle for providing retirement income to U.S. employees, replacing the defined benefit pension plan that w as frozen effective December 31, 2004. The Company sponsors defined contribution plans covering employees outside the U.S. which are managed on a local basis.
     Total Company costs associated with defined contribution plans totaled $13.8, $11.6 and $11.7 for 2004, 2003 and 2002, respectively.

14.     Stock Compensation Plans

Stock Incentive Plan The 2003 Long-Term Incentive Plan was approved by the shareholders of the Company on April 29, 2003 and will terminate on April 29, 2013. Under this plan, a total of 6,000,000 shares were authorized for issuance, of which no more than 1,800,000 shares may be issued pursuant to awards other than options and stock appreciation rights. Any employee or non-employee director is eligible to participate under the plan. Stock options, stock appreciation rights, restricted stock, performance awards and other stock unit awards may be granted under such plan.
     Prior to the 2003 Long-Term Incentive Plan, the Company provided shares available for grant in each calendar year, equal to three percent of the total number of outstanding shares of Common stock as of the first day of each such year, under its Stock Incentive Plan which had an evergreen provision. In October 2002, the Company's Board of Directors amended the plan to eliminate the evergreen feature and provide a pool of shares of 1,600,000 to be available for future grants. As of the adoption of the 2003 Long-Term Incentive Plan on April 29, 2003, no additional shares will be issued under this plan.
     The Company had also adopted a stock incentive plan for non-officers effective January 22, 2001. The number of shares available for grant each year were no greater than two percent of the total number of outstanding shares of Common stock as of the first day of each such year. Options and awards under this plan were granted only to employees of the Company or any subsidiary corporation of the Company who were neither officers nor directors of the Company. Effective January 1, 2003, no additional shares will be issued under this plan.

Stock Options The Company has granted stock options under the plans discussed above. These options typically vest ratably over three years for employee options and 100% after one year for non-employee director options, and they expire ten years from the date of grant. Vesting is contingent upon a continued employment relationship with the Company. (See Note 1 ¾ Accounting Policies for a discussion relating to the Company's accounting for stock-based employee compensation plans).
     For purposes of this disclosure, the fair value of each fixed option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted average assumptions used for grants issued each year:

	2004	2003	2002
Risk-free interest rate	3.06%	3.37%	2.87%
Dividend yield	1.18%	1.18%	1.21%
Volatility factor	35.97%	36.02%	38.39%
Weighted average expected life (years)	6	6	5

     The weighted average value of options granted was $19.19, $10.98 and $12.41, in 2004, 2003 and 2002, respectively.
A summary of the status of the Company's fixed stock option plans at year-end 2004, 2003 and 2002 is presented below:

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	2004		2003		2002
	Number of Shares (000s)	Weighted Average Exercise Price (Per Share)	Number of Shares (000s)	Weighted Average Exercise Price (Per Share)	Number of Shares (000s)	Weighted Average Exercise Price (Per Share)
Outstanding at beginning of year	7,530	$43.66	7,060	$46.60	6,072	$49.87
Granted	1,125	54.86	1,444	30.65	1,858	37.74
Exercised	(1,853)	42.27	(312)	38.97	(70)	35.81
Forfeited and canceled	(281)	60.62	(662)	48.68	(800)	51.78
Outstanding at year end	6,521	45.31	7,530	43.66	7,060	46.60
Options exercisable at year end	3,996	$46.94	4,680	$48.80	4,242	$49.83

     The following represents additional information about fixed stock options outstanding at December 25, 2004:

	Options Outstanding			Options Exercisable
Range of Exercise Prices (Per Share)	Number Outstanding (000s)	Weighted Average Remaining Contractual Life (Years)	Weighted Average Exercise Price (Per Share)		Number Exercisable (000s)	Weighted Average Exercise Price (Per Share)
$26.00 to 40.49	3,171	7.1	$34.36		1,760	$35.29
40.50 to 45.49	867	5.0	44.07		861	44.09
45.50 to 55.49	1,269	7.8	53.48		287	50.90
55.50 to 65.49	717	6.1	61.61		591	61.98
65.50 to 72.97	497	4.4	72.97		497	72.97
	6,521	6.6	$45.31		3,996	$46.94

Stock Awards The Company also issues restricted stock awards to officers and other key personnel. These awards have vesting periods up to seven years with vesting criteria based on the attainment of specific performance goals such as average sales and cumulative earnings per share targets and based on continued employment until applicable vesting dates.
     Compensation expense is recorded based on applicable vesting criteria and, for those awards with performance goals, as such goals are met. In 2004, 2003 and 2002, 42,300, 103,800 and 379,422, shares related to such awards were granted at weighted average market values of $54.67, $40.25 and $37.36 per share, respectively. As of December 25, 2004, 348,765 awards remain outstanding.

15.     Minority Interest

The minority interest liability at the end of 2004 and 2003 represents outside interests in non-U.S. commercial and manufacturing joint ventures, which are fully consolidated in the Company's results. At December 29, 2001, the minority interest in subsidiaries primarily represented an outside partnership interest of 22% in Wilmington Partners L.P. (the Partnership). The remaining partnership interests were held by four wholly owned subsidiaries of the Company. The Partnership is a separate legal entity from the Company, but for financial reporting purposes, assets, liabilities and results of operations from the Partnership are included in the Company's consolidated financial results. The outside investor's limited partnership interest was recorded as minority interest totaling $200.0 in the Company's consolidated financial statements at December 29, 2001. During March 2002, the outside partner exercised its put right for all of its partnership interest, and the Com pany recorded a one-time early liquidation premium of $7.0, net of taxes, in connection with the early termination of the outside partner's interest. The termination of the minority interest obligation and payment of the associated early liquidation premium occurred in May 2002.

16.     Operating Leases

The Company leases land, buildings, machinery and equipment under noncancelable operating leases. Total annual rental expense for 2004, 2003 and 2002 amounted to $31.3, $28.0 and $28.1, respectively.Minimum future rental commitments having noncancelable lease terms in excess of one year aggregated $79.0, net of aggregated sublease rentals of $3.8, as of December 25, 2004 and are payable as follows: 2005, $26.0; 2006, $18.7; 2007, $11.7;

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2008, $8.2; 2009, $5.3 and beyond, $9.1.

17.     Commitments and Contingencies

Lines of Credit The Company guarantees indebtedness of its subsidiaries under lines of credit used for working capital. Availability under such lines of credit totaled approximately $90.1 and $51.3 at the end of 2004 and 2003, respectively. There were no outstanding balances at December 25, 2004 and December 27, 2003.

Letters of Credit The Company had outstanding standby letters of credit totaling approximately $20.8 and $20.4 at the end of 2004 and 2003, respectively, to ensure payment of possible workers' compensation, product liability and other insurance claims. At the end of 2004 and 2003, the Company had recorded liabilities of approximately $11.1 related to workers' compensation, product liability and property insurance claims.

Guarantees The Company guarantees a real property mortgage loan of a research and development partner. The mortgage is secured by the property with a current appraised value of $4.0. The Company's guarantee has a five-year term expiring July 2007. The principal balance of the guaranteed loan totaled approximately $3.5 and $4.0 at the end of 2004 and 2003, respectively. This guarantee would require payment from the Company in the event of default by the research partner and failure of the security to fully satisfy the then outstanding debt.
     The Company also guarantees a lease obligation of a customer in connection with a joint marketing alliance. The lease obligation has a term of ten years expiring November 2011. At the end of 2004 and 2003, the amount guaranteed was approximately $10.0. In the event of default, the guarantee would require payment from the Company. Sublease rights as specified under the agreement would reduce the Company's exposure.
     The Company believes the likelihood is remote that material payments will be required in either circumstance. The Company has not recorded any liabilities under these guarantees.

Tax Indemnifications In connection with divestitures, the Company has agreed to indemnify certain tax obligations arising out of tax audits or administrative or court proceedings relating to tax returns for any periods ending on or prior to the closing date of the divestiture. The Company believes that any claim would not have a material impact on the Company's financial position. The Company has not recorded any liabilities associated with these claims.

Environmental Indemnifications The Company has certain obligations for environmental remediation and Superfund matters related to current and former Company sites. The Company has an ongoing program in place designed to identify and manage potential environmental liabilities through such actions as having a rotating schedule of regular assessments performed to identify and manage potential issues at Company sites before they occur, a domestic waste disposal contract which contains indemnification of the Company from the vendor for disposal of all waste once it leaves Company property, a regular schedule of training and prevention programs designed to keep employees in Company plants aware of their responsibilities, environmental due diligence for business acquisitions and real estate transactions and ongoing tracking of significant laws and regulations affecting the Company in any of the countries where it operates. In those instances where the Company may identify environmental liability, the Comp any manages directly all remedial investigations, negotiation of approved remediation plans with applicable governmental authorities and implementation of all approved remediation activities.
     At December 25, 2004, estimated future remediation costs of approximately $0.6 were accrued by the Company, excluding estimates for legal expenses. The estimate for future remediation costs follows guidelines established by the American Standards for Testing and Materials (ASTM) Document E2137-01. All known current potential Company environmental liabilities are considered in this estimate. It is reasonable to expect that the Company's recorded estimates of its liabilities may change and there is no assurance that additional costs greater than the amounts accrued will not be incurred, or that changes in environmental laws or their interpretation will not require additional amounts to be spent. The Company does not believe that its financial position, results of operations, and cash flows are likely to be materially affected by environmental liabilities.

Other Commitments and Contingencies The Company is involved in lawsuits, claims, investigations and proceedings, including patent, trademark, commercial and environmental matters, which are being handled and defended in the ordinary course of business as described in Note 22 ¾ Other Matters.

Product Warranties The Company estimates future costs associated with expected product failure rates, material usage and service costs in the development of its warranty obligations. Warranty reserves are established based on historical experience of warranty claims and generally will be estimated as a percentage of sales over the warranty period or as a fixed dollar amount per

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unit sold. In the event that the actual results of these items differ from the estimates, an adjustment to the warranty obligation would be recorded. Changes in the Company's product warranty liability during 2003 and 2004 were as follows:

Balance at December 28, 2002	$5.9
Accruals for warranties issued	7.5
Changes in accruals related to pre-existing warranties	0.5
Settlements made	(5.8)
Balance at December 27, 2003	$8.1
Accruals for warranties issued	6.8
Changes in accruals related to pre-existing warranties	(1.1)
Settlements made	(5.9)
Balance at December 25, 2004	$7.9

Deferred Service Revenue Service revenues are derived from service contracts on surgical equipment sold to customers and are recognized over the term of the contracts while costs are recognized as incurred. Changes in the Company's deferred service revenue during 2003 and 2004 were as follows:

Balance at December 28, 2002	$4.9
Accruals for service contracts	12.5
Changes in accruals related to pre-existing service contracts	1.3
Revenue recognized	(12.2)
Balance at December 27, 2003	$6.5
Accruals for service contracts	14.2
Changes in accruals related to pre-existing service contracts	(0.3)
Revenue recognized	(12.5)
Balance at December 25, 2004	$7.9

18.     Forward Equity Contracts

During 2001, the Company's Board of Directors authorized the repurchase of up to 2,000,000 shares of the Company's Common stock. The Company executed an agreement with a financial institution for the future purchase of such shares through one or more forward purchase transactions. Such purchases, which may have had settlement dates as long as two years, could have been settled, at the Company's election, on a physical share, net cash or net share basis. As of December 28, 2002, the Company had entered into forward purchases covering 750,000 shares. During March 2003, at the expiration of the forward purchase agreement, the Company paid $30.7 for the 750,000 shares, at an average price of $40.89 to settle its obligation. This repurchase of Common stock was recorded as treasury stock in the Company's consolidated financial statements during the quarter ended March 29, 2003.

19.     Supplemental Balance Sheet Information

	December 25, 2004	December 27, 2003	December 28, 2002
Allowances for Losses on Trade Receivables
Balance at beginning of year	$21.3	$25.6	$20.7
Provision charge to operating income	4.3	2.9	6.2
Gross write-offs of trade receivables accounts	(4.0)	(9.3)	(3.5)
Recoveries on trade receivables accounts       previously written off	0.5	0.1	0.9
Currency effect	0.8	2.0	1.3
Balance at end of year	$22.9	$21.3	$25.6

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	December 25, 2004	December 27, 2003
Inventories, net
Raw materials and supplies	$    50.0	$    42.6
Work in process	17.8	19.3
Finished products	136.6	145.4
	$  204.4	$  207.3

	December 25, 2004	December 27, 2003
Property, Plant and Equipment, net
Land	$    19.1	$    18.3
Buildings	341.5	328.2
Machinery and equipment	977.4	954.7
Leasehold improvements 1	28.7	30.1
Equipment on operating lease 2	16.5	12.4
	1,383.2	1,343.7
Less accumulated depreciation	(802.3)	(795.6)
	$  580.9	$  548.1

1     Upon initial application of SFAS No. 143, Accounting for Asset Retirement Obligations, the Company recorded an initial liability and an increase to leasehold improvements of $1.8. Cumulative accretion and accumulated depreciation were measured from the commencement date of the leases to the date of adoption. A cumulative charge of initially applying this statement of $0.9,net oftax,was reported in the first quarter of 2003 as a change in accounting principle in the Statements of Income.
²     See Note 4 ¾ Net Investment in Sales-Type and Operating Leases for additional information regarding equipment on operating lease.

20.     Restructuring Charges and Asset Write-offs

Profitability Improvement Program and Transfer of PureVision Contact Lens Manufacturing In July 2002, the Company announced plans to improve operating profitability through a comprehensive plan which included plant closures and consolidations; manufacturing efficiencies and yield enhancements; procurement process enhancements; the rationalization of certain contact lens and surgical product lines; distribution initiatives; and the development of a global information technology (IT) platform. These plans included the elimination of approximately 465 jobs worldwide associated with those actions. Restructuring charges and asset write-offs of $22.8 before taxes associated with these initiatives were recorded in the third quarter of 2002. The Company also recorded a pre-tax amount of $3.7 during the third quarter of 2002 for severance associated with the elimination of approximately 145 jobs due to the transfer of PureVision extended wear contact lens manufacturing from the U.S. to Waterfo rd, Ireland following a ruling against the Company in a U.S. patent lawsuit. During the fourth quarter of 2003, the Company reversed $6.3 in severance charges as certain termination actions and plant closures did not occur due to an increased demand for certain product lines.
     At the conclusion of the Profitability Improvement Program and the transfer of PureVision contact lens manufacturing, 468 jobs were eliminated. Related expenses of $16.8 and $3.4 of asset write-offs were charged against the liability. Cash payments for severance and other related expenses were $10.8 and $6.0 in 2003 and 2002, respectively. All actions related to this restructuring plan were completed by the end of 2003.

2001 Program In December 2001, the Company's Board of Directors approved a comprehensive restructuring plan designed to reduce ongoing operating costs by eliminating approximately 800 jobs on a global basis. During the first quarter of 2002, a pre-tax amount of $23.5 was recorded for Phase II of the restructuring and additional asset write-offs. During the third quarter of 2002, the Company reversed $1.0 pre-tax of severance and other costs that were not required.
     Cash payments for severance and other related expenses were $26.3 in 2002. All actions related to this restructuring program were completed as of September 28, 2002.

21.     Discontinued Operations

On June 26, 1999, the Company completed the sale of its eyewear segment to Luxottica Group S.p.A. (Luxottica). During 2000,

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Luxottica proposed certain purchase price adjustments in connection with this transaction. On January 22, 2002, the Company reached an agreement with Luxottica relative to these proposed adjustments. The net result of the resolution was an after-tax charge to discontinued operations of $21.1 ($0.39 per diluted share) in 2001. The net cash impact of this settlement was a $23.0 payment to Luxottica in January 2002.

22.     Other Matters

The Company is engaged in various lawsuits, claims, investigations and proceedings including patent, trademark, commercial and environmental matters that are in the ordinary course of business. The Company cannot at this time estimate with any certainty the impact of such matters on its financial position.

23.     Quarterly Results, Stock Prices and Selected Financial Data

Quarterly Results (unaudited) The following table presents reported net sales, gross profit (net sales less cost of products sold), net income and earnings per share for each quarter during the past two years. Net sales and gross profit are reported on the same basis as amounts in the accompanying Statements of Income on page 28.

				Earnings Per Share
	Net Sales	Gross Profit	Net Income	Basic	Diluted
2004
First	$   510.3	$   289.9	$ 23.5	$0.45	$0.43 2
Second	566.5	338.9	41.4	0.78	0.76 2
Third	548.9	317.5	43.3	0.81	0.79 2
Fourth	606.6	351.1	51.4	0.97	0.94 2
	$2,232.3	$1,297.4	$159.6	$3.03	$2.93 2
2003
First	$   448.0	$   249.8	$  15.6	$0.29	$0.29
Second	512.5	298.8	28.3	0.53	0.53
Third	508.9	299.3	32.2	0.61	0.60 2
Fourth	550.1	313.6	49.4 1	0.94	0.92 2
	$2,019.5	$1,161.5	$125.5	$2.37	$2.34 2

     The amounts in the following references are all presented after taxes.

1     Includes R&D expense of $3.7 associated with the acquisition of an early-stage pharmaceutical technology, a $4.1 reversal of previously recorded restructuring reserves for the Company's Profitability Improvement Program (see Note 20 ¾ Restructuring Charges and Asset Write-offs) and net foreign currency income of $4.5 realized upon the liquidation of certain non-U.S. subsidiaries.
²     Includes the dilution effect from the Company's application of EITF Issue 04-8, The Effect of Contingently Convertible Debt on Diluted Earnings Per Share (see Note 2 ¾ Earnings Per Share). Dilutive shares were retroactively restated for periods ended prior to December 25, 2004 with no change to previously reported EPS. Dilutive shares outstanding for the first, second and third quarters of 2004 were restated to 54,566; 54,569 and 54,628 from 54,499; 54,431 and 54,460, respectively. Dilutive shares outstanding for the 2003 third quarter and year to date periods were restated to 53,423 and 53,519 from 53,379 and 53,491, respectively.

Quarterly Stock Prices (unaudited) The Company's Common stock is listed on the New York Stock Exchange and is traded under the symbol BOL. There were approximately 7,700 and 8,000 Common shareholders of record at year-end 2004 and 2003, respectively. The following table shows the price range of the Common stock for each quarter for the past two years:

	2004		2003
	Price Per Share		Price Per Share
	High	Low	High	Low
First	$61.64	$50.70	$37.00	$29.35
Second	66.67	57.63	40.74	32.11
Third	69.00	57.42	45.74	36.05
Fourth	67.95	57.17	52.66	43.70

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Selected Financial Data (unaudited)

Dollar Amounts in Millions - Except Per Share Data

2004 2003 2002 2001 2000

Results for the Year
Net sales 1	$2,232.3	$2,019.5	$1,816.7	$1,665.5	$1,718.7
Income from Continuing Operations 2	159.6	126.4	72.5	42.0	83.4
Net Income	159.6	125.5	72.5	21.2	83.4
Continuing Operations - Basic earnings per    share 2	3.03	2.39	1.35	0.78	1.54
Net Income - Basic earnings per share	3.03	2.37	1.35	0.39	1.54
Continuing Operations - Diluted earnings per    share 2	2.93	2.36	1.34	0.78	1.52
Net Income - Diluted earnings per share	2.93	2.34	1.34	0.39	1.52
Dividends per share	0.52	0.52	0.65	1.04	1.04
Year End Position
Working capital	$   548.0	$   545.0	$   455.7	$   693.7	$   899.8
Total assets	3,022.1	3,006.4	2,773.4	2,993.5	3,239.3
Short-term debt	100.8	195.0	187.9	123.3	235.2
Long-term debt	543.3	652.0	656.2	703.2	763.1
Shareholders' equity	1,426.9	1,203.4	1,017.8	975.0	1,039.4
Other Ratios and Statistics
Return on sales from continuing operations 1,2	7.1%	6.3%	4.0%	2.5%	4.9%
Return on average Shareholders' equity	12.5%	11.9%	7.4%	2.1%	7.9%
Return on invested capital	9.1%	8.5%	6.0%	3.1%	6.1%
Return on average total assets	5.2%	4.4%	2.5%	0.7%	2.3%
Effective income tax rate for continuing    operations before minority interest	33.5%	34.0%	34.5%	33.8%	40.8%
Current ratio	1.7	1.6	1.5	2.0	2.1
Total debt to Shareholders' equity	45.1%	70.4%	82.9%	84.8%	96.0%
Total debt to capital	31.1%	41.3%	45.3%	45.9%	49.0%
Capital expenditures	$   118.9	$    91.5	$    91.9	$    96.4	$    95.0

1     Amounts prior to 2002 have been reclassified to reflect the adoption of EITF 01-09 as described in Note 1 ¾ Accounting Policies.
²     Amounts for 2000 have been reclassified as prescribed by SFAS No. 145. A previously recorded extraordinary gain of $1.4, net of taxes, has been reclassified to Income from Continuing Operations.

Item 9.     Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not Applicable.

Item 9A.     Controls and Procedures

Evaluation of Disclosure Controls and Procedures - As of the end of the period covered by this report, the Company carried out an evaluation, under the supervision and with the participation of the Company's Chairman and Chief Executive Officer along with the Company's Senior Vice President and Chief Financial Officer, of the effectiveness of disclosure controls and procedures as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Based on such evaluation, the Company's Chairman and Chief Executive Officer and the Company's Senior Vice President and Chief Financial Officer have concluded that as of the end of the period covered by this report, the Company's disclosure controls and procedures were effective in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in the Company's periodic filings with the Securities and Exchange Commission.

Page 59

Management's Report on Internal Control Over Financial Reporting - Management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rule 13a-15(f) under the Exchange Act. Internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States of America.
     The Company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company's assets that could have a material effect on the financial statements.
     Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
     Management conducted an evaluation of the effectiveness of internal control over financial reporting based on the framework in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that the Company's internal control over financial reporting was effective as of December 25, 2004. Management's assessment of the effectiveness of the Company's internal control over financial reporting has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which is included herein.

Changes in Internal Controls - During the last fiscal year, the Company continued to implement its global enterprise reporting system at its commercial operations and shared financial services center in the United Kingdom and at certain manufacturing facilities in the U.S. and Europe. Other than the foregoing, there were no changes in the Company's internal control over financial reporting that occurred during the Company's last fiscal year that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting. The Company is continuing to implement the global enterprise reporting system, and in that process, expects that there will be future material changes in internal controls as a result of this implementation.

Item 9B.     Other Information

Not Applicable.

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Part III

Item 10.     Directors and Executive Officers of Bausch & Lomb Incorporated

The items required by Part III, Item 10 are incorporated herein by reference from those relevant portions of the registrant's Proxy Statement. The names, ages (as of March 1, 2005), positions and offices held by and a brief account of the business experience during the past five years of each executive officer is set forth at the end of Part I of this Report on Form 10-K and is incorporated herein by reference. Additionally, the section to be entitled "Section 16(a) Beneficial Ownership Reporting Compliance" that shall be included in the Proxy Statement is incorporated herein by reference.
     The Company has adopted a Code of Ethics that applies to its senior financial officers. The Code of Ethics is located on the Company's internet web site at http://www.bausch.com/us/vision/about/investor/governance.jsp.

Item 11.     Executive Compensation

The items required by Part III, Item 11 are incorporated herein by reference from those relevant portions of the registrant's Proxy Statement.

Item 12.     Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The section to be entitled "Security Ownership of Certain Beneficial Owners and Directors and Executive Officers" which shall be included in the Proxy Statement is incorporated herein by reference.
     The section entitled Equity Compensation Plan Information as set forth on page 7 of this Report on Form 10-K under Part II, Item 5. Market for Bausch & Lomb Incorporated's Common Stock and Related Shareholder Matters, is incorporated herein by reference.

Item 13.     Certain Relationships and Related Transactions

The items required by Part III, Item 13 are incorporated herein by reference from that relevant portion of the section to be entitled "Related Transactions, Employment Contracts and Termination of Employment and Change in Control Arrangements" of the Proxy Statement.

Item 14.     Principal Accounting Fees and Services

The items required by Part III, Item 14 are incorporated herein by reference from that relevant portion of the section to be entitled "Report of the Audit Committee" of the Proxy Statement.

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Part IV

Item 15.     Exhibits and Financial Statement Schedules

The following documents or the portions thereof indicated are filed as a part of this Report.

(a)	Index to Financial Statements and Financial Statement Schedules Covered by Reports of Independent Auditors.		Page
	1.	Financial statements filed herewith:
		Report of Independent Registered Public Accounting Firm	64
		Balance Sheets at December 25, 2004 and December 27, 2003	29
		For the years ended December 25, 2004, December 27, 2003 and December 28, 2002:
		Statements of Income	28
		Statements of Cash Flows	30
		Statements of Changes in Shareholders' Equity	31
		Notes to Financial Statements	33-59
All schedules have been omitted because the required information is not present or not present in amounts sufficient to require submission of the schedule, or because the information required is included in the financial statements or the notes thereto.

(b)

Item 601 Exhibits

Those exhibits required to be filed by Item 601 of Regulation S-K are listed in the Exhibit Index immediately preceding the exhibits filed herewith and such listing is incorporated herein by reference. Each of Exhibits (10)-a through (10)-g, (10)-i through (10)-p and (10)-r through (10)-z is a management contract or compensatory plan or arrangement required to be filed as an exhibit to this Form pursuant to Item 15(c) of this report.

Page 62

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant) BAUSCH & LOMB INCORPORATED                                                                                                               

By (Signature and Title*) /s/ Ronald L. Zarrella                                                                                                                           
Ronald L. Zarrella
Chairman and Chief Executive Officer

Date: March 8, 2005

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

Principal Executive Officer

By (Signature and Title*) /s/ Ronald L. Zarrella                                                                                                                           
Ronald L. Zarrella
Chairman and Chief Executive Officer

Date: March 8, 2005

Principal Financial Officer

By (Signature and Title*) /s/ Stephen C. McCluski                                                                                                                       
Stephen C. McCluski
Senior Vice President and Chief Financial Officer

Date: March 8, 2005

Controller

By (Signature and Title*) /s/ Jurij Z. Kushner                                                                                                                            
Jurij Z. Kushner
Vice President and Controller

Date: March 8, 2005

Directors

Alan M. Bennett
Domenico De Sole
Paul A. Friedman
Jonathan S. Linen
Ruth R. McMullin
John R. Purcell
Linda Johnson Rice
William H. Waltrip
Barry W. Wilson
Kenneth L. Wolfe
Ronald L. Zarrella

Date: March 8, 2005

By: /s/ Robert B. Stiles                                                                                                                                                  
Robert B. Stiles
Attorney-in-Fact

Page 63

Report of Independent Registered Public Accounting Firm

Tothe Shareholders and Board of Directors of Bausch & Lomb Incorporated:

We have completed an integrated audit of Bausch & Lomb Incorporated's December 25, 2004 consolidated financial statements and of its internal control over financial reporting as of December 25, 2004 and audits of its December 27, 2003 and December 28, 2002 consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Our opinions, based on our audits, are presented below.

Consolidated Financial Statements In our opinion, the consolidated financial statements listed in the accompanying index appearing under Item 15(a)(1) present fairly, in all material respects, the financial position of Bausch & Lomb Incorporated and its subsidiaries at December 25, 2004 and December 27, 2003, and the results of their operations and their cash flows for each of the three years in the period ended December 25, 2004 in conformity with accounting principles generally accepted in the United States of America. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material m isstatement. An audit of financial statements includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
     As discussed in Notes 1 and 13 of the consolidated financial statements, as of December 25, 2004, the Company has reduced its accumulated postretirement benefit obligation to conform with the provisions of FSP FAS 106-2, Accounting and Disclosure Requirements Related to the Medicare Prescription Drug, Improvement and Modernization Act of 2003. As discussed in Note 19 of the consolidated financial statements, as of December 27, 2003, the Company has recognized asset retirement costs to conform with the provisions of Statement of Financial Accounting Standards No. 143, Accounting for Asset Retirement Obligations.

Internal Control Over Financial Reporting Also, in our opinion, management's assessment, included in the Management's Report on Internal Control Over Financial Reporting appearing under Item 9A, that the Company maintained effective internal control over financial reporting as of December 25, 2004 based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO), is fairly stated, in all material respects, based on those criteria. Furthermore, in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 25, 2004, based on criteria established in Internal Control - Integrated Framework issued by the COSO. The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting. Our responsibility is to express opinions on management's assessment and on the effectiveness of the Company's internal control over financial reporting based on our audit. We conducted our audit of internal control over financial reporting in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. An audit of internal control over financial reporting includes obtaining an understanding of internal control over financial reporting, evaluating management's assessment, testing and evaluating the design and operating effectiveness of internal control, and performing such other procedures as we consider necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinions.
     A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Page 64

     Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP

Rochester, New York
March 8, 2005

Page 65

Exhibit Index

S-K Item 601 No.	Document
(3)-a	Certificate of Incorporation of Bausch & Lomb Incorporated (filed as Exhibit (3)-a to the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 1985, File No. 1-4105 and incorporated herein by reference).
(3)-b	Certificate of Amendment of Bausch & Lomb Incorporated (filed as Exhibit (3)-b to the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1988, File No. 1-4105 and incorporated herein by reference).
(3)-c	Certificate of Amendment of Bausch & Lomb Incorporated (filed as Exhibit (3)-c to the Company's Annual Report on Form 10-K for the fiscal year ended December 26, 1992, File No. 1-4105 and incorporated herein by reference).
(3)-d	By-Laws of Bausch & Lomb Incorporated, as amended, effective October 26, 1998 (filed as Exhibit (3)-a to the Company's Form 10-Q for the quarter ended September 26, 1998, File No. 1-4105 and incorporated herein by reference).
(4)-a	See Exhibit (3)-a.
(4)-b	See Exhibit (3)-b.
(4)-c	See Exhibit (3)-c.
(4)-d	Form of Indenture, dated as of September 1, 1991, between the Company and Citibank, N.A., as Trustee, with respect to the Company's Medium-Term Notes (filed as Exhibit (4)-a to the Company's Registration Statement on Form S-3, File No. 33-42858 and incorporated herein by reference).
(4)-e	Supplemental Indenture No. 1, dated May 13, 1998, between the Company and Citibank, N.A. (filed as Exhibit 3.1 to the Company's Current Report on Form 8-K, dated July 24, 1998, File No. 1-4105 and incorporated herein by reference).
(4)-f	Supplemental Indenture No. 2, dated as of July 29, 1998, between the Company and Citibank, N.A. (filed as Exhibit 3.2 to the Company's Current Report on Form 8-K, dated July 24, 1998, File No. 1-4105 and incorporated herein by reference).
(4)-g	Supplemental Indenture No. 3, dated November 21, 2002, between the Company and Citibank, N.A. (filed as Exhibit 4.8 to the Company's Current Report on Form 8-K, dated November 18, 2002, File No. 1-4105 and incorporated herein by reference).
(4)-h	Supplemental Indenture No. 4, dated August 1, 2003, between the Company and Citibank, N.A. (filed as Exhibit 4.1 to the Company's Current Report on Form 8-K, dated August 6, 2003, File No. 1-4105 and incorporated herein by reference).
(4)-i	Fifth Supplemental Indenture, dated August 4, 2003, between the Company and Citibank, N.A. (filed as Exhibit 4.2 to the Company's Current Report on Form 8-K, filed August 6, 2003, File No. 1-4105, and incorporated herein by reference).
(4)-j	Sixth Supplemental Indenture, dated December 20, 2004 between the Company and Citibank, N.A. (filed herewith).
(10)-a	Change of Control Employment Agreement with certain executive officers of the Company (filed as Exhibit (10)-a to the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 1990, File No. 1-4105 and incorporated herein by reference).

Page 66

(10)-b	Change of Control Employment Agreement with certain executive officers of the Company (filed as Exhibit (10)-b to the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 1996, No. 1-4105 and incorporated herein by reference).
(10)-c	Amended and Restated Supplemental Retirement Income Plan II (filed as Exhibit (10)-f to the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 1990, File No. 1-4105 and incorporated herein by reference).
(10)-d	Amended and Restated Supplemental Retirement Income Plan III, dated December 31, 2000 filed as Exhibit (10)-d to the Company's Annual Report on Form 10-K for the fiscal year ended December 30, 2000, File No. 1-4105 and incorporated herein by reference).
(10)-e	Annual Retainer Stock Plan for Non-Employee Directors (filed as Exhibit (10)-dd to the Company's Annual Report on Form 10-K for the fiscal year ended December 28, 1996, File No. 1-4105 and incorporated herein by reference).
(10)-f	Management Incentive Compensation Plan (filed as Exhibit (10)-b to the Company's Form 10-Q for the quarter ended June 27, 1998, File No. 1-4105 and incorporated herein by reference).
(10)-g	Employment Agreement dated November 9, 2001 between Bausch & Lomb Incorporated and Ronald L. Zarrella, Chairman and Chief Executive Officer (filed as Exhibit (10)-z to the Company's Annual Report on Form 10-K for the fiscal year ended December 29, 2001, File No. 1-4105 and incorporated herein by reference).
(10)-h	Amended and Restated 1990 Stock Incentive Plan (filed as Exhibit (10)-s to the Company's Form 10-K for the year ended December 28, 2002, File No. 1-4105 and incorporated herein by reference).
(10)-i	Amendment No. 6 to the Bausch & Lomb Incorporated 1990 Stock Incentive Plan (filed as Exhibit (10)-t to the Company's Form 10-K for the year ended December 28, 2002, File No. 1-4105 and incorporated herein by reference).
(10)-j	Corporate Officer Separation Plan (filed as Exhibit (10)-v to the Company's Form 10-K for the year ended December 28, 2002, File No. 1-4105 and incorporated herein by reference).
(10)-k	Amended and Restated 2001 Stock Incentive Plan for Non-Officers, as approved by the Committee on Management on January 22, 2001 and amended on July 23, 2001 (filed as Exhibit (10)-w to the Company's Form 10-K for the year ended December 28, 2002, File No. 1-4105 and incorporated herein by reference).
(10)-l	Amendment No. 2 to the Bausch & Lomb Incorporated 2001 Stock Incentive Plan for Non-Officers, effective January 1, 2003 (filed as Exhibit (10)-x to the Company's Form 10-K for the year ended December 28, 2002, File No. 1-4105 and incorporated herein by reference).
(10)-m	Five-Year Credit Agreement, dated as of January 23, 2003 among Bausch & Lomb Incorporated and the initial lenders named therein and Salomon Smith Barney Inc. and Banc of America Securities LLC and Bank of America N.A. and Fleet National Bank and Citibank, N.A. (filed as Exhibit (10)-y to the Company's Form 10-K for the year ended December 28, 2002, File No. 1-4105 and incorporated herein by reference).
(10)-n	2003 Long-Term Incentive Plan as amended and restated on July 15, 2003 (filed as Exhibit (10)-b to the Company's Form 10-Q for the quarter ended June 28, 2003, File No. 1-4105 and incorporated herein by reference).
(10)-o	Amendment No. 1 to the Amended and Restated Supplemental Retirement Income Plan III (filed as Exhibit (10)-b to the Company's Form 10-Q for the quarter ended September 27, 2003, File No. 1-4105 and incorporated herein by reference).

Page 67

(10)-p	Stock Unit Award Agreement pursuant to the 2003 Long-Term Incentive Plan (filed as Exhibit (10)-c to the Company's Form 10-Q for the quarter ended September 27, 2003, File No. 1-4105 and incorporated herein by reference).
(10)-q	Restricted Stock Award Agreement pursuant to the 2003 Long-Term Incentive Plan (filed as Exhibit (10)-d to the Company's Form 10-Q for the quarter ended September 27, 2003, File No. 1-4105 and incorporated herein by reference).
(10)-r	Bausch & Lomb Incorporated Annual Incentive Compensation Plan, as amended and restated on January 25, 2005 (filed herewith).
(10)-s	Director Deferred Compensation Plan as amended and restated on December 1, 2003 (filed as Exhibit (10)-w to the Company's Form 10-K for the year ended December 27, 2003, File No. 1-4105 and incorporated herein by reference).
(10)-t	Restricted Stock Deferred Compensation Plan, as amended and restated on December 1, 2003 (filed as Exhibit (10)-x to the Company's Form 10-K for the year ended December 27, 2003, File No. 1-4105 and incorporated herein by reference).
(10)-u	Executive Deferred Compensation Plan, as amended and restated on December 1, 2003 (filed as Exhibit (10)-y to the Company's Form 10-K for the year ended December 27, 2003, File No. 1-4105 and incorporated herein by reference).
(10)-v	Stock Option Agreement Pursuant to 2003 Long-Term Incentive Plan (filed as Exhibit (10)-z to the Company's Form 10-K for the year ended December 27, 2003, File No. 1-4105 and incorporated herein by reference).
(10)-w	Description of certain employment terms for Paul G. Howes, Senior Vice President and President, Americas Region, dated November 12, 2003 (filed herewith).
(10)-x	Sixth Supplemental Indenture, dated December 20, 2004, between the Company and Citibank, N.A. (filed herewith as Exhibit (4)-j).
(12)	Statement Regarding Computation of Ratio of Earnings to Fixed Charges (filed herewith).
(21)	Subsidiaries (filed herewith).
(23)	Consent of Independent Registered Public Accounting Firm (filed herewith).
(24)	Power of Attorney with respect to the signatures of directors in this Report on Form 10-K (filed herewith).
(31)-a	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
(31)-b	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 (filed herewith).
(32)-a	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350 (furnished herewith).
(32)-b	Certification pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350 (furnished herewith).
(99)-a	Information Concerning Forward-Looking Statements (filed herewith).

Page 68

EX-4.J

Exhibit 4(J)

BAUSCH & LOMB INCORPORATED

________________________________

Sixth Supplemental Indenture

Dated as of December 20, 2004
________________________________

Citibank, N.A.,
Trustee

2004 Senior Convertible Securities due 2023

ARTICLE 1		2004 SENIOR CONVERTIBLE SECURITIES DUE 2023		1
	Section 1.01		Establishment	1
	Section 1.02		Definitions	2
	Section 1.03		Payment of Principal and Interest	8
	Section 1.04		Denominations	12
	Section 1.05		Global Securities	12
	Section 1.06		Redemption at the Option of the Company	12
	Section 1.07		Purchase at the Option of the Holder Upon a Fundamental Change	13
	Section 1.08		Purchase of Senior Convertible Notes at the Option of the Holder	14
	Section 1.09		Further Conditions and Procedures for Purchase Upon a Fundamental Change and Purchase at the Option of the Holder	15
	Section 1.10		Conversion of Senior Convertible Notes	20
	Section 1.11		Additional Events of Default; Withholding Notice; Rescission	30
	Section 1.12		Amendment; Supplement; and Waiver	31
	Section 1.13		Register of Securities; Paying Agent; Conversion Agent	32
	Section 1.14		Calculations in Respect of the 2004 Senior Convertible Notes	33
	Section 1.15		Tax Treatment	33
	Section 1.16		Transfer and Exchange	33
ARTICLE 2		MISCELLANEOUS PROVISIONS		38
	Section 2.01		Recitals by the Company	38
	Section 2.02		Ratification and Incorporation of Original Indenture	39
	Section 2.03		Executed in Counterparts	39
	Section 2.04		Governing Law	39
Exhibit A		Form of Floating Rate Convertible Senior Note
Exhibit B		Certificate of Authentication of Floating Rate Convertible Senior Note
Exhibit C		Projected Payment Schedule
Exhibit D		Table of Additional Shares

1     This Table of Contents does not constitute part of the Indenture or have any bearing upon the interpretation of any of its terms and provisions.

     THIS SIXTH SUPPLEMENTAL INDENTURE is made as of the 20th day of December 2004, by and between BAUSCH & LOMB INCORPORATED, a corporation duly organized and existing under the laws of the State of New York (herein referred to as the "Company", which term includes any successor Person under the Indenture hereinafter referred to) having its principal office at One Bausch & Lomb Place, Rochester, New York 14604 and CITIBANK, N.A., a national banking association duly organized and existing under the laws of the United States of America, as trustee (hereinafter referred to as the "Trustee", which term includes any successor trustee under the Indenture).

W I T N E S S E T H:

     WHEREAS, the Company and the Trustee have heretofore entered into an Indenture, dated as of September 1, 1991, as amended by Supplemental Indenture No. 1, dated May 13, 1998, Supplemental Indenture No. 2, dated July 29, 1998, Supplemental Indenture No. 3, dated November 21, 2002, Supplemental Indenture No. 4, dated August 1, 2003, Supplemental Indenture No. 5, dated August 4, 2003 (the "Original Indenture"), with the Trustee;

     WHEREAS, the Original Indenture is incorporated herein by this reference and the Original Indenture, as may be amended and supplemented to the date hereof, including by this Sixth Supplemental Indenture, is herein called the "Indenture";

     WHEREAS, under the Indenture, a new series of Securities may at any time be established in accordance with the provisions of the Indenture and the terms of such series may be described by a supplemental indenture executed by the Company and the Trustee;

     WHEREAS, the Company hereby proposes to create under the Indenture a new series of Securities;

     WHEREAS, additional Securities of other series hereafter established, except as may be limited in the Indenture as at the time supplemented and modified, may be issued from time to time pursuant to the Indenture as at the time supplemented and modified;

     WHEREAS, the Company will offer to exchange all of its Floating Rate Convertible Securities due 2023, issued pursuant to the Original Indenture, for the 2004 Senior Convertible Notes issuable hereunder, together with an exchange fee of $2.50 per $1,000 of original principal amount, as described in the Registration Statement; and

     WHEREAS, all conditions necessary to authorize the execution and delivery of this Sixth Supplemental Indenture and to make it a valid and binding obligation of the Company have been done or performed.

     NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows:

ARTICLE 1

2004 SENIOR CONVERTIBLE SECURITIES DUE 2023

     SECTION 1.01 Establishment. There is hereby established a new series of Securities to be issued under the Indenture to be designated as the Company's 2004 Senior Convertible Securities due 2023 (the "2004 Senior Convertible Notes").

     There are to be authenticated and delivered up to $160,000,000 principal amount of the 2004 Senior Convertible Notes, in an amount equal to the aggregate original principal amount of the Company's Floating Rate Convertible Senior Notes due 2023 accepted for exchange in the Exchange Offer and no further Senior Convertible Notes shall be authenticated and delivered except as provided by Section 304, 305, 306, 906 or 1106 of the Original Indenture, the last paragraph of Section 301 thereof, Section 1.09(f) hereof and Section 1.10(c)(iv) hereof. The 2004 Senior Convertible Notes shall be issued in fully registered form without coupons.

     The 2004 Senior Convertible Notes shall be in substantially the form set out in Exhibit A hereto, and the form of the Trustee's Certificate of Authentication for the 2004 Senior Convertible Notes shall be in substantially the form set forth in Exhibit B hereto.

     Each 2004 Senior Convertible Note shall be dated the date of authentication thereof and shall bear interest from August 1, 2004, or from the most recent Interest Payment Date to which interest has been paid or duly provided for.

     The 2004 Senior Convertible Notes issued on the date hereof will be: (i) offered and issued by the Company in exchange for the Company's Floating Rate Convertible Securities due 2023 issued pursuant to the Fifth Supplemental Indenture in accordance with the terms of an issuer tender offer filed with the Securities and Exchange Commission, and (ii) registered for such exchange on a Registration Statement on Form S-4 filed with the Securities and Exchange Commission.

     SECTION 1.02 Definitions. The following defined terms used herein shall, unless the context otherwise requires, have the meanings specified below for purposes of the 2004 Senior Convertible Notes. Capitalized terms used herein for which no definition is provided herein shall have the meanings set forth in the Original Indenture.

     "Accreted Principal Amount" has the meaning provided in Section 1.03(c).

     "Additional Shares" means the additional shares of Common Stock increasing the Conversion Rate in the event of a Cash Take-Over Transaction as set forth in Section 1.10(g)(vii).

     "Business Day" means, with respect to any security (including the 2004 Senior Convertible Notes), any day, other than a Saturday or Sunday, that is neither a legal holiday nor a day on which commercial banks are authorized or required by law, regulation or executive order to close in The City of New York or a day on which the Corporate Trust Office of the Trustee is closed.

"Calculation Agent" means Citibank, N.A. and any successor Calculation Agent hereunder.
"Cash Take-Over Transaction" means a Change of Control described in clause (ii) of the definition of Change of Control where 10% or more of the consideration for the Common Stock in the transaction consists of cash or securities or other property which are not Publicly Traded Securities.
"Change of Control" will be deemed to have occurred when:
	(i) any "person" or "group" within the meaning of Section 13(d) and 14(d) of the Exchange Act other than the Company, its subsidiaries or its or their employee benefit plans, is or becomes the direct or indirect ultimate "beneficial owner," as defined in Rule 13d-3 and 13d-5 under the Exchange Act, of the Company's common equity representing more than 50% of the combined voting power of the Company's then outstanding common equity entitled to vote generally in the election of directors;
	(ii) consummation of any share exchange, consolidation or merger of the Company pursuant to which the Common Stock will be reclassified into or exchanged into cash, securities or other property or any sale, assignment, conveyance, lease or other transfer in one transaction or a series of transactions of all or substantially all of the consolidated assets of the Company and its subsidiaries, taken as a whole, to any person other than the Company or one or more of its subsidiaries; provided, however, that a transaction where the Holders of the Company's common equity immediately prior to such transaction have directly or indirectly, more than 50% of the combined voting power of all classes of common equity then outstanding of the continuing or surviving corporation or transferee entitled to vote generally in the election of directors immediately after such event, in substantially the same respective proportions as immediately prior to such transaction, shall not be a Change of Control; or
	(iii) any time the Continuing Members of the Company's Board of Directors do not constitute a majority of the Company's Board of Directors (or any successor corporation thereto) where a Continuing Member is, as of any date of determination, any member of the Company's Board of Directors who: (i) was a member of the Board of Directors as of the date of this Sixth Supplemental Indenture, or (ii) was nominated for election or elected to the Board of Directors with the approval of a majority of the Continuing Members who were members of the Board of Directors at the time of such nomination or election.
A Change of Control will not be deemed to have occurred in respect of clauses (i) and (ii) above, however, if either:
	(i) the Closing Sale Price of the Common Stock for any five Trading Days within the 10 consecutive Trading Days ending immediately after the later of the Change of Control or the public announcement of a Change of Control (in the case of a Change of Control under clause (ii) above), equals or exceeds 110% of the accreted Conversion Price of the 2004 Senior Convertible Notes in effect on the date of the Change of Control or the public announcement thereof, or
	(ii) at least 90% of the consideration, excluding cash payments for fractional shares, in the transaction or transactions constituting the Change of Control consists of Publicly Traded Securities and as a result of this transaction or transactions the 2004 Senior Convertible Notes become convertible into cash in the amount of the Principal Return and such Publicly Traded Securities, excluding cash payments for fractional shares.
For purposes of this Sixth Supplemental Indenture the term capital stock of any Person means any and all shares (including ordinary shares or American Depositary Shares), interests, participations, or other equivalents, however designated, of corporate stock or other equity participations, including partnership interests, whether general or limited, of such Person and any rights (other than debt securities convertible or exchangeable into an equity interest), warrants or options to acquire an equity interest in such Person.
"Clearstream" means Clearstream Banking, societe anonyme, Luxembourg.
"Closing Sale Price" of the Common Stock on any Trading Day means the last reported per share sale price (or if the last sale price is not reported, the average of the high and low sale prices) on such date as reported on the New York Stock Exchange or, if the Common Stock is not then listed on the New York Stock Exchange, such other U.S. national or regional securities exchange on which the Common Stock is then listed or, if the Common Stock is not listed on a U.S. national or regional securities exchange, as reported by the Nasdaq National Market. If the Common Stock is not listed for trading on a U.S. national or regional securities exchange and not reported by the Nasdaq National Market on the relevant date, the "Closing Sale Price" will be the last quoted bid price for the Common Stock in the over-the-counter market on the relevant date as reported by the National Quotation Bureau or similar organization. If the Common Stock is not so quoted, the &quo t;Closing Sale Price" will be the average of the mid-point of the last bid and asked prices for the Common Stock on the relevant date quoted by each of at least three nationally recognized independent investment banking firms selected by the Company for this purpose.
"Common Stock" means the common stock, $0.40 par value, of the Company.
"Company Purchase Notice" has the meaning provided in Section 1.09(a) hereof.
"Company Purchase Notice Date" has the meaning provided in Section 1.09(a) hereof.
"Contingent Interest" has the meaning provided in Section 1.03(e).
"Conversion Agent" means the Trustee or such other office or agency designated by the Company where Senior Convertible Notes may be presented for conversion.
"Conversion Date" has the meaning provided in Section 1.10(c)(i) hereof.
"Conversion Price" means $1,000 divided by the Conversion Rate.

"Conversion Rate" has the meaning provided in Section 1.10(b) hereof.
"Conversion Settlement Reference Period" means the ten Trading Day period beginning on the third Trading Day immediately following the Conversion Date, or with respect to any 2004 Senior Convertible Note which has previously selected for redemption by the Company pursuant to Section 1.06 hereof, the ten Trading Day period beginning on the third Trading Day immediately following the related Redemption Date.
"Conversion Value" means the product of: (x) the Conversion Rate and (y) the average Closing Sale Price of the Common Stock during the Conversion Settlement Reference Period.
"Current Market Price" per share of Common Stock on any day means the average of the daily Closing Sale Price per share for the ten consecutive Trading Days ending not later than the earlier of: the day in question (including upon the occurrence of a Fundamental Change), and the day before the "ex date" with respect to the distribution requiring such computation. As used herein, the term "ex date," when used with respect to any distribution, shall mean the first date on which the Common Stock trades regular way on the exchange or in the market in which the security trades without the right to receive such distribution.
"Daily Share Amount" means for each $1,000 Original Principal Amount of the 2004 Senior Convertible Notes on each Trading Day an amount equal to the greater of: (a) zero or (b) the number of shares of Common Stock equal to (i) the difference of (x) the product of the Closing Sale Price on such Trading Day and the applicable Conversion Rate minus (y) the Accreted Principal Amount, divided by (ii) the product of ten (10) and the Closing Sale Price on such Trading Day.
"Definitive Securities" has the meaning provided in Section 1.05(a).
"Depository" means DTC, ClearStream or Euroclear, as applicable.
"Determination Date" means the second London Business Day immediately preceding the applicable Interest Reset Date.
"DTC" means The Depository Trust Company, a limited-purpose trust company organized under the New York Banking Law.
"Effective Date" means the date on which a Cash Take-Over Transaction becomes effective or is consummated.
"Euroclear" means Euroclear Bank S.A./N.V., as operator of the Euroclear System.
"Exchange Act" means the Securities and Exchange Act of 1934, as amended.
"Exchange Offer" means the offer of the Company to exchange its outstanding Senior Convertible Notes for an equal principal amount of 2004 Senior Convertibles Notes and an exchange fee of $2.50 for each principal amount of validly tendered Senior Convertible Notes, as described in the Registration Statement.
"Expiration Time" has the meaning provided in Section 1.10(g)(vi) hereof.
"Fifth Supplemental Indenture" means the Original Indenture as amended through the Fifth Supplemental Indenture, dated August 4, 2003, pursuant to which the Senior Convertible Notes were issued.
"Fundamental Change" will be deemed to have occurred at any time after the Original Issue Date upon a Change of Control or a Termination of Trading.
"Fundamental Change Purchase Date" has the meaning provided in Section 1.07(a) hereof.
"Fundamental Change Purchase Notice" has the meaning provided in Section 1.07(b)(i) hereof.
"Fundamental Change Purchase Price" has the meaning provided in Section 1.07(a) hereof.
"Interest Payment Date" means each February 1 and August 1 of each year, commencing February 1, 2005.
"Interest period" means any six-month period from February 1 to July 31 and August 1 to January 31, as appropriate, commencing with the six-month period beginning August 1, 2004.
"Interest Reset Date" has the meaning provided in Section 1.03(a).
"LIBOR Business Day" means any day other than Saturday or Sunday or a day on which banking institutions or trust companies in the City of New York are required or authorized to close and that is also a London Business Day."
"London Business Day" means any day on which dealings in deposits in U.S. dollars are transacted in the London Interbank market.
"Net Share Amount" has the meaning provided in Section 1.10(b)(ii) hereof.
"Option Exercise Date" has the meaning provided in Section 1.03(h) hereof.
"Original Issue Date" means December __, 2004.
"Original Principal Amount" shall mean up to $160,000,000, being the original principal amount of the 2004 Senior Convertible Notes exchanged for the Senior Convertible Notes pursuant to the Exchange Offer.
"Principal Return" has the meaning provided in Section 1.10(b)(i) hereof.
"Public Acquirer Change of Control" means any event constituting a Cash Take-Over Transaction that would otherwise result in an increase of the Conversion Rate pursuant to Section 1.10(g)(vii) where the acquirer has Public Acquirer Common Stock and an election is made pursuant to Section 1.10(g)(viii).
"Public Acquirer Common Stock" means any class of common stock which constitute Publicly Traded Securities issued by the acquirer in a Public Acquirer Change of Control or by: (a) a direct or indirect majority-owned subsidiary of the acquirer, or (b) a corporation that directly or indirectly is the majority owner of the acquirer.
"Publicly Traded Securities" means shares of capital stock traded on a U.S. national securities exchange or quoted on the Nasdaq National Market or which will be so traded or quoted when issued or exchanged in connection with a Change of Control.
"Purchase Price" means an amount equal to the principal amount of the 2004 Senior Convertible Notes to be purchased plus any accrued and unpaid interest to but excluding the Repurchase Date.
"Purchased Shares" has the meaning provided in Section 1.10(g)(vi).
"Record Date" means, with respect to any dividend, distribution or other transaction or event in which the Holders of Common Stock have the right to receive any cash, securities or other property or in which the Common Stock (or other applicable security) is exchanged for or converted into any combination of cash, securities or other property, the date fixed for determination of shareholders entitled to receive such cash, securities or other property (whether such date is fixed by the Board of Directors or by statute, contract or otherwise).
"Redemption Date" has the meaning provided in Section 1.06(a) hereof.
"Redemption Price" has the meaning provided in Section 1.06(a) hereof.
"Registration Statement" means the Registration Statement of the Company on Form S-4 filed with the Securities and Exchange Commission and registering for exchange pursuant to the Exchange Offer the 2004 Senior Convertible Notes.
"Regular Record Date" means, with respect to each Interest Payment Date, the close of business on January 15 and July 15 immediately preceding such Interest Payment Date (whether or not a Business Day).
"Repurchase Date" has the meaning provided in Section 1.08(a) hereof.
"Repurchase Notice" has the meaning provided in Section 1.08(b)(i) hereof.
"Restated Principal Amount" has the meaning provided in Section 1.03(h) hereof.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Convertible Notes" means the Floating Rate Convertible Securities due 2023 issued by the Company pursuant to the terms of the Fifth Supplemental Indenture.
"Six Month LIBOR" has the meaning provided in Section 1.03(a) hereof.
"Spin-off Market Price" per share of the capital stock of, or similar equity interest in, a subsidiary of the Company on any day means the average of the daily Closing Sale Price for the 10 consecutive Trading Days commencing on and including the sixth Trading Day after the "ex date" with respect to the issuance or distribution requiring such computation. As used herein, the term "ex date," when used with respect to any issuance or distribution, shall mean the first date on which such capital stock trades regular way on the exchange or in the market in which the security trades without the right to receive such issuance or distribution.
"Stated Maturity" means August 1, 2023.
"Stock Price" means the price paid for each outstanding share of Common Stock in a Cash Take-Over Transaction if the consideration received by holders of Common Stock in the Cash Take-Over Transaction consists solely of cash, or if the consideration received by such holders is paid in cash and other securities or property, the average of the Closing Sale Price of the Common Stock for the five consecutive Trading Days immediately preceding, but not including, the Effective Date.
"Tax Event" means that the Company shall have received an opinion from independent tax counsel experienced in such matters to the effect that as a result of: (a) any amendment to, or change (including any announced prospective change) in, the laws (or any regulations thereunder) of the United States or any political subdivision or taxing authority thereof or therein; or (b) any amendment to, or change in, an interpretation or application of such laws or regulations by any legislative body, court, governmental agency or regulatory authority, in each case which amendment or change is enacted, promulgated, issued or announced or which interpretation is issued or announced or which action is taken, on or after the date of this Sixth Supplemental Indenture, there is more than an insubstantial risk that accruals of Accreted Principal Amount payable on the 2004 Senior Convertible Notes either: (x) would not be deductible on a current accrual basis; or (y) would not be dedu ctible under any other method, in either case in whole or in part, by the Company (by reason of deferral, disallowance, or otherwise) for U.S. federal income tax purposes.
If any legislative proposal were ever enacted and made applicable to the 2004 Senior Convertible Notes in a manner that would limit the Company's ability to either: (1) deduct the interest, including the accruals of Accreted Principal Amount, payable on the 2004 Senior Convertible Notes on a current accrual basis; or (2) deduct the interest, including the accruals of Accreted Principal Amount, payable on the notes under any other method for U.S. federal income tax purposes, such enactment would result in a Tax Event.
"Tax Event Date" has the meaning provided in Section 1.03(h) hereof.
"Termination of Trading" shall be deemed to have occurred if the Common Stock (or other capital stock into which the 2004 Senior Convertible Notes are then convertible for portions of the Conversion Value in excess of the Accreted Principal Amount) is neither listed for trading on the New York Stock Exchange nor approved for trading on the Nasdaq National Market.
"Trading Day" means (a) if the applicable security is listed on the New York Stock Exchange or other U.S. national securities exchange or admitted for quotation on the Nasdaq National Market, a day on which the New York Stock Exchange or other U.S. national securities exchange or the Nasdaq National Market, as applicable, is open for trading, or (b) if the applicable security is not so listed, admitted for trading or quoted, any Business Day.
"Trading Price" means, on any date, the average of the secondary market bid quotations for the 2004 Senior Convertible Notes obtained by the Trustee for $5,000,000 Original Principal Amount of Senior Convertible Notes at approximately 3:30 p.m., New York City time, on such date from three independent nationally recognized securities dealers selected by the Company; provided that if at least three such bids cannot reasonably be obtained by the Trustee, but two bids are obtained, then the average of the two bids shall be used, and if only one such bid can reasonably be obtained by the Trustee, one bid shall be used; and provided further that if the Trustee cannot reasonably obtain at least one bid for $5,000,000 Original Principal Amount of Senior Convertible Notes from a nationally recognized securities dealer or in the Company's reasonable judgment, the bid quotations are not indicative of the secondary market value of the 2004 Senior Convertible Notes, then the Tra ding Price per $1,000 Original Principal Amount of Senior Convertible Notes shall be deemed to be less than 97% of the product of: (a) the applicable Conversion Rate of the Senior Convertible Notes and (b) the Closing Sale Price on such date.
"Trustee" has the meaning provided in the preamble hereof.
"2004 Senior Convertible Notes" has the meaning provided in Section 1.01 hereof.
"Yield Reset Date" means each February 1 and August 1 of each year, commencing August 1, 2010.
SECTION 1.03 Payment of Principal and Interest. (a) The Accreted Principal Amount of the 2004 Senior Convertible Notes shall be due at Stated Maturity. The 2004 Senior Convertible Notes will bear cash interest on the Original Principal Amount at the annual rate of Six Month LIBOR plus 0.50% reset semi-annually on each Interest Payment Date (such day being an "Interest Reset Date"); provided that such rate will never be less than 0%, from the August 1, 2004, or from the most recent date to which interest has been paid or provided for, until August 1, 2010. During such period, the Company will pay cash interest semi-annually in arrears on each Interest Payment Date to Holders of record at the close of business on each Regular Record Date immediately preceding such Interest Payment Date. The interest rate in effect for the 2004 Senior Convertible Notes on any day will be (a) if that day is an Interest Reset Date, the interest determined as of the Determination Date immediately preceding such Interest Reset Date, or (b) if that day is not an Interest Reset Date, the interest rate determined as of the Determination Date immediately preceding the most recent Interest Reset Date. Each payment of cash interest on the 2004 Senior Convertible Notes will include interest (including Contingent Interest, if any) accrued through the day immediately preceding the most recent Interest Payment Date (or the Repurchase Date, Redemption Date, Fundamental Change Purchase Date or, in certain circumstances, the Conversion Date, as the case may be). Any payment required to be made on any day that is not a Business Day will be made on the next succeeding Business Day.
LIBOR will be determined by the Calculation Agent as of the applicable determination date in accordance with the following provisions ("Six-Month LIBOR"):
	(i) the rate for six-month deposits in US dollars commencing on the related Interest Reset Date, that appears on the Moneyline Telerate Page 3750 as of 11:00 A.M., London time, on the interest Determination Date; or
	(ii) if no rate appears on the particular interest Determination Date on the Moneyline Telerate Page 3750, the rate calculated by the Calculation Agent as the arithmetic mean of at least two offered quotations obtained by the Calculation Agent after requesting the principal London offices of each of four major reference banks in the London interbank market to provide the Calculation Agent with its offered quotation for deposits in US dollars for the period of six months, commencing on the related Interest Reset Date, to prime banks in the London interbank market at approximately 11:00 A.M., London time, on that interest Determination Date and in a principal amount that is representative for a single transaction in US dollars in that market at that time; or
	(iii) if fewer than two offered quotations referred to in clause (ii) are provided as requested, the rate calculated by the Calculation Agent as the arithmetic mean of the rates quoted at approximately 11:00 A.M., New York time, on the particular interest Determination Date by three major banks in The City of New York selected by the Calculation Agent for loans in US dollars to leading European banks for a period of six months and in a principal amount that is representative for a single transaction in US dollars in that market at that time; or
	(iv) if the banks so selected by the Calculation Agent are not quoting as mentioned in clause (iii), six-month LIBOR determined on the preceding interest Determination Date.
	(v) "Moneyline Telerate Page 3750" means the display on Moneyline Telerate (or any successor service) on such page (or any other page as may replace such page on such service) for the purpose of displaying the London interbank rates of major banks for US dollars.
(b) If the Stated Maturity date of the 2004 Senior Convertible Notes falls on a day that is not a LIBOR Business Day, the related payment of principal and interest will be made on the next LIBOR Business Day as if it were made on the date such payment was due, and no interest will accrue on the amounts so payable for the period from and after such Stated Maturity date to the next LIBOR Business Day. If any Interest Reset Date or Interest Payment Date (other than at the date of Stated Maturity) would otherwise be a day that is not a LIBOR Business Day, that Interest Reset Date and Interest Payment Date will be postponed to the next date that is a LIBOR Business Day, except that if such LIBOR Business Day is in the next calendar month, such Interest Reset Date and Interest Payment Date (other than at the date of Stated Maturity) shall be the immediately preceding LIBOR Business Day.
(c) Until August 1, 2010, the accreted principal amount (the "Accreted Principal Amount") of a 2004 Senior Convertible Note will be equal to the Original Principal Amount of $1,000. Beginning August 1, 2010, the 2004 Senior Convertible Note shall not bear interest, except as specified in this paragraph. From such date, the Original Principal Amount shall commence increasing daily by the annual rate of Six Month LIBOR plus 0.50% reset on each Interest Reset Date; provided that such rate will never be less than 0%, to produce the Accreted Principal Amount. The Accreted Principal Amount will compound semi-annually, not daily. On Stated Maturity, the Holder of this 2004 Senior Convertible Note will receive the fully Accreted Principal Amount of this 2004 Senior Convertible Note on such date, unless the 2004 Senior Convertible Note has been earlier redeemed, repurchased or converted. Unless cash interest is payable as provided in Section 1.03(a) or (h) hereof, the accrue d yield shall be added to the Accreted Principal Amount per Senior Convertible Note as of the day preceding the most recent Yield Reset Date. The yield will be calculated using the actual number of days elapsed between the Yield Reset Dates divided by 360.
(d) If the Accreted Principal Amount hereof or any portion of such Accreted Principal Amount is not paid when due (whether upon acceleration pursuant to Section 502 of the Original Indenture, upon the date set for payment of the Redemption Price, upon the date set for payment of the Purchase Price or Fundamental Change Purchase Price or upon the Stated Maturity of the 2004 Senior Convertible Notes) or if installments of cash interest due hereon as provided in Section 1.03(a) or (h) are not paid when due in accordance with this Section, then in each such case, the overdue amount shall, to the extent permitted by law, bear interest at Six Month LIBOR plus 0.50% reset on each Interest Reset Date (provided that such rate will never be less than 0%) as such rate is in effect following the date such overdue amount was originally due to the date payment of such amount, including interest thereon, has been made or duly provided for. All such interest shall be payable on demand. The a ccrual of such interest on overdue amounts shall be in lieu of, and not in addition to, any subsequent increase in the Accreted Principal Amount.
(e) The Company will pay contingent interest ("Contingent Interest") to the Holders of the 2004 Senior Convertible Notes in respect of any six-month interest period from February 1 to July 31 and from August 1 to January 31, commencing on or after August 1, 2010 for which the average Trading Price of a 2004 Senior Convertible Note for the applicable five Trading Day reference period equals or exceeds 120% of the sum of the Accreted Principal Amount and accrued interest, if any, for a 2004 Senior Convertible Note as of the day immediately preceding the first day of the applicable six-month interest period. The "five Trading Day reference period" means the five Trading Days ending on the third Trading Day immediately preceding the relevant Interest Reset Date. For any six-month interest period in respect of which the Contingent Interest is payable, the Contingent Interest payable on each $1,000 principal amount of Notes shall be equal to 0.30% of the average Trading Price of a 2004 Senior Convertible Note for the applicable five Trading Day reference period. No Contingent Interest shall be payable on Senior Convertible Notes redeemed on August 1, 2010 (or, if August 1, 2010 is not a Business Day, on the next following Business Day).
Upon determination that Holders will be entitled to receive Contingent Interest in respect of a six-month interest period, the Company shall notify the Holders. In connection with providing such notice, the Company will issue a press release containing information regarding the Contingent Interest determination or publish such information on the Company's then existing website or through such other public medium as the Company may use at that time.
(f) Interest, including Contingent Interest, if any, on any 2004 Senior Convertible Note that is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the person in whose name that Senior Convertible Note is registered at the close of business on the Regular Record Date for such interest or Contingent Interest, if any, at the office or agency of the Company maintained for such purpose. Each installment of interest or Contingent Interest, if any, on any 2004 Senior Convertible Note shall be paid in same-day funds by transfer to an account maintained by the payee located inside the United States.
(g) The amount of interest, including Contingent Interest, if any, payable for any period shall be computed on the basis of the actual number of days elapsed over a 360-day year. The amount of interest, including Contingent Interest, if any, payable for any partial period shall be computed on the basis of a 360-day year of twelve 30-day months and the actual number of days elapsed in any partial month. In the event that any Interest Payment Date on a 2004 Senior Convertible Note is not a Business Day, then a payment of the interest, including Contingent Interest, if any, payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay) with the same force and effect as if made on the date of the payment was originally payable.
(h) From and after the date (the "Tax Event Date") of the occurrence of a Tax Event after August 1, 2010, the Company shall have the option to elect by notice to the Trustee, in lieu of having Accreted Principal Amount increase, to have interest accrue and be paid in cash at the annual rate equal to Six Month LIBOR plus 0.50%, reset on each Interest Reset Date; provided that such rate shall never be less than 0%, on a Restated Principal Amount per $1,000 Original Principal Amount (the "Restated Principal Amount") equal to the accrued Accreted Principal Amount through the Tax Event Date or the date the Company exercises the option provided for in this section, whichever is later (the "Option Exercise Date"). Such interest shall be payable semi-annually on February 1 and August 1 of each year to Holders of record at the close of business on January 15 and July 15 immediately preceding such Interest Payment Date. Interest will accrue from the most r ecent date on which interest has been paid or, if no interest has been paid, from the Option Exercise Date. The Trustee shall notify Holders of Senior Convertible Notes within 15 days after the Option Exercise Date that the Company has exercised the option provided for in this Section.
SECTION 1.04 Denominations. The 2004 Senior Convertible Notes shall be issued in denominations of $1,000 and any integral multiple thereof.
SECTION 1.05 Global Securities. (a) The 2004 Senior Convertible Notes shall initially be issued in the form of one or more Global Securities registered in the name of the Depositary (which initially shall be The Depository Trust Company) or its nominee. Except under the limited circumstances described below, Senior Convertible Notes represented by such Global Security or Global Securities shall not be exchangeable for, and shall not otherwise be issuable as, Senior Convertible Notes in definitive form ("Definitive Securities"). The Global Securities described in this Article 1 may not be transferred except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or to a successor Depositary or its nominee.
(b) A Global Security shall be exchangeable for Senior Convertible Notes registered in the names of Persons other than the Depositary or its nominee only if (i) the Depositary notifies the Company that it is unwilling or unable to continue as a Depositary for such Global Security and no successor Depositary shall have been appointed by the Company within 90 days of receipt by the Company of such notification, or if at any time the Depositary ceases to be a clearing agency registered under the Exchange Act at a time when the Depositary is required to be so registered to act as such Depositary and no successor Depositary shall have been appointed by the Company within 90 days after it becomes aware of such cessation, or (ii) the Company in its sole discretion determines that such Global Security shall be so exchangeable. Any Global Security that is exchangeable pursuant to the preceding sentence shall be exchangeable for Senior Convertible Notes registered in such names as the Depositary shall direct.
(c) Transfers, exchanges and forms of the 2004 Senior Convertible Notes are further subject to the provisions of Section 1.16.
SECTION 1.06 Redemption at the Option of the Company. The 2004 Senior Convertible Notes are redeemable for cash as a whole, or from time to time in part, on any date (a "Redemption Date") at the option of the Company at 100% of the Accreted Principal Amount of the 2004 Senior Convertible Notes, plus any accrued and unpaid interest to the Redemption Date (the "Redemption Price"), provided that the 2004 Senior Convertible Notes are not redeemable prior to August 1, 2010. If the 2004 Senior Convertible Note has been converted to a semi-annual cash interest paying note following the occurrence of a Tax Event and an Option Exercise Date, the Redemption Price will be equal to the Restated Principal Amount plus accrued and unpaid interest (including Contingent Interest, if any) from the date of such conversion to but not including the Redemption Date; but in no event will the 2004 Senior Convertible Note be redeemable before August 1, 2010.
(b) The Company shall notify each Holder and the Trustee of the redemption pursuant to Section 1104 of the Original Indenture.
(c) If any 2004 Senior Convertible Notes selected for partial redemption are thereafter surrendered for conversion in part before termination of the conversion right with respect to the portion of the 2004 Senior Convertible Notes so selected, the converted portion of such 2004 Senior Convertible Notes shall be deemed (so far as may be), solely for purposes of determining the aggregate principal amount of 2004 Senior Convertible Notes to be redeemed by the Company, to be the portion selected for redemption. 2004 Senior Convertible Notes which have been converted during a selection of 2004 Senior Convertible Notes to be redeemed may be treated by the Trustee as Outstanding for the purpose of such selection. Nothing in this Section 1.06(c) shall affect the right of any Holder to convert any 2004 Senior Convertible Notes before the termination of the conversion right with respect thereto. If the Company decides to redeem fewer than all of the outstanding 2004 Senior Convertible Notes then the Trustee will select the 2004 Senior Convertible Notes to be redeemed (in principal amount of $1,000 or integral multiples thereof) by lot, or on a pro rata basis or by another method the Trustee considers fair and appropriate.
(d) In addition to those matters set forth in Section 1104 of the Indenture, a notice of redemption sent to the Holders of Senior Convertible Notes shall state:
	(i) the name of the Paying Agent and Conversion Agent;
	(ii) the then current Conversion Rate;
	(iii) that the 2004 Senior Convertible Notes called for redemption may be converted at any time prior to the close of business on the second Business Day immediately preceding the Redemption Date; and
	(iv) that Holders who wish to convert 2004 Senior Convertible Notes must comply with the procedures in Section 1.10 hereof and paragraph 7 of the reverse of the 2004 Senior Convertible Notes.
(e) The 2004 Senior Convertible Notes shall not have a sinking fund.
SECTION 1.07 Purchase at the Option of the Holder Upon a Fundamental Change. (a) Each Holder shall have the right, at such Holder's option, to require the Company to purchase any or all of such Holder's 2004 Senior Convertible Notes for cash in integral multiples of $1,000 Original Principal Amount held by such Holder by delivery to the Paying Agent (as hereinafter provided) of a Fundamental Change Purchase Notice no later than 60 Business Days after the occurrence of a Fundamental Change of the Company (a "Fundamental Change Purchase Date") for a Fundamental Change purchase price (the "Fundamental Change Purchase Price") equal to 100% of the Accreted Principal Amount of such 2004 Senior Convertible Notes plus accrued and unpaid interest, including Contingent Interest, if any, to but not including the Fundamental Change Purchase Price Date, which Fundamental Change Purchase Price shall be paid in cash. No 2004 Senior Convertible Notes may be purcha sed at the option of the Holders due to a Fundamental Change if there has occurred and is continuing an Event of Default (other than an Event of Default that is cured by the payment of the Fundamental Change Purchase Price of such 2004 Senior Convertible Notes).
(b) Exercise of Fundamental Change Option. For a 2004 Senior Convertible Note to be so purchased at the option of the Holder pursuant to this Section 1.07, the Paying Agent must receive, no later than 60 Business Days after the occurrence of a Fundamental Change:
	(i) a written notice of purchase (a "Fundamental Change Purchase Notice") substantially in the form entitled "Form of Fundamental Change Purchase Notice" on the reverse of the 2004 Senior Convertible Note duly completed, on or before the close of business on the Business Day immediately preceding the Fundamental Change Purchase Date, subject to extension to comply with applicable law. The Fundamental Change Purchase Notice shall state:
		(1) if certificated, the certificate numbers of the 2004 Senior Convertible Notes which the Holder shall deliver to be purchased;
		(2) the portion of the principal amount of the 2004 Senior Convertible Notes which the Holder shall deliver to be purchased, which portion must be $1,000 or an integral multiple thereof; and
		(3) that such 2004 Senior Convertible Notes shall be purchased as of the Fundamental Change Purchase Date pursuant to the terms and conditions specified in the 2004 Senior Convertible Notes and in the Indenture;
	(ii) delivery or book-entry transfer of such 2004 Senior Convertible Notes prior to, on or after the Fundamental Change Purchase Date (together with all necessary endorsements) at the offices of the Paying Agent, such delivery or transfer being a condition to receipt by the Holder of the Fundamental Change Purchase Price therefor; provided, however, that such Fundamental Change Purchase Price shall be so paid pursuant to this Section 1.07 only if the 2004 Senior Convertible Notes so delivered or transferred to the Paying Agent shall conform in all respects to the description thereof in the related Fundamental Change Purchase Notice.
SECTION 1.08 Purchase of 2004 Senior Convertible Notes at the Option of the Holder. On each of August 1, 2010, August 1, 2013 and August 1, 2018 (each, a "Repurchase Date"), each Holder shall have the right, at such Holder's option, to require the Company to purchase for cash any or all of such Holder's 2004 Senior Convertible Notes. The Company shall purchase such 2004 Senior Convertible Notes at a price equal to 100% of the Accreted Principal Amount of the 2004 Senior Convertible Notes to be purchased plus any accrued and unpaid interest, including Contingent Interest, if any, on the principal amount to be purchased to but excluding the Repurchase Date.
If prior to a Repurchase Date the 2004 Senior Convertible Note has been converted to a semi-annual coupon note following the occurrence of a Tax Event, the Purchase Price will be equal to the Restated Principal Amount plus accrued and unpaid cash interest, including Contingent Interest, if any, from the date of conversion to the Repurchase Date but not including the Repurchase Date.
(b) Exercise of Repurchase Option. For a 2004 Senior Convertible Note to be so purchased at the option of the Holder, the Paying Agent must receive:
	(i) a written notice of purchase (a "Repurchase Notice") substantially in the form entitled "Form of Repurchase Notice" on the reverse of the 2004 Senior Convertible Note duly completed, at any time from the opening of business on the date that is 20 Business Days prior to a Repurchase Date until the close of business on the third Business Day prior to such Repurchase Date. The Repurchase Notice shall state:
		(1) if certificated, the certificate numbers of the 2004 Senior Convertible Notes which the Holder shall deliver to be purchased;
		(2) the portion of the principal amount of the 2004 Senior Convertible Notes which the Holder shall deliver to be purchased, which portion must be $1,000 or an integral multiple thereof; and
		(3) that such 2004 Senior Convertible Notes shall be purchased as of the Repurchase Date pursuant to the terms and conditions specified in the 2004 Senior Convertible Notes and in the Indenture.
	(ii) delivery or book-entry transfer of such 2004 Senior Convertible Notes to the Paying Agent prior to, on or after the Repurchase Date (together with all necessary endorsements) at the offices of the Paying Agent, such delivery or transfer being a condition to receipt by the Holder of the Purchase Price therefor; provided, however, that such Purchase Price shall be so paid pursuant to this Section 1.08 only if the 2004 Senior Convertible Notes so delivered or transferred to the Paying Agent shall conform in all respects to the description thereof in the related Repurchase Notice.
SECTION 1.09 Further Conditions and Procedures for Purchase Upon a Fundamental Change and Purchase at the Option of the Holder.
(a) Notice of Repurchase Date or Fundamental Change. The Company shall send notices (each, a "Company Purchase Notice") to the Holders (and to beneficial owners as required by applicable law) at their addresses shown in the 2004 Senior Convertible Note register maintained by the Security Registrar, and shall deliver a copy of each such notice to the Trustee and Paying Agent, not less than 20 Business Days prior to each Repurchase Date, or on or before the 20th day after the occurrence of the Fundamental Change, as the case may be (each such date of delivery, a "Company Purchase Notice Date"). Any such notice delivered to the Trustee and the Paying Agent with respect to a Fundamental Change shall be accompanied by an Officers' Certificate certifying that a Fundamental Change has occurred and as to the date of the occurrence thereof, on which Certificate the Trustee and the Paying Agent may conclusively rely. Each Company Purchase Notice shall includ e a Form of Repurchase Notice or Fundamental Change Purchase Notice to be completed by a Holder and shall state:
	(i) the applicable Purchase Price or Fundamental Change Purchase Price, excluding accrued and unpaid interest, the applicable Conversion Rate at the time of such notice (and any applicable adjustments to the Conversion Rate) and, to the extent known at the time of such notice, the amount of interest that will be payable with respect to the 2004 Senior Convertible Notes on the applicable Repurchase Date or Fundamental Change Purchase Date;
	(ii) if the notice relates to a Fundamental Change, the events causing the Fundamental Change and the date of the Fundamental Change;
	(iii) the Repurchase Date or Fundamental Change Purchase Date;
	(iv) the last date on which a Holder may exercise its purchase right;
	(v) the name and address of the Paying Agent and the Conversion Agent;
	(vi) that 2004 Senior Convertible Notes must be surrendered to the Paying Agent to collect payment of the Purchase Price or Fundamental Change Purchase Price;
	(vii) that 2004 Senior Convertible Notes as to which a Repurchase Notice or Fundamental Change Purchase Notice has been given by the Holder to the Company may be converted only if the applicable Repurchase Notice or Fundamental Change Purchase Notice has been withdrawn by the Holder in accordance with the terms of this Sixth Supplemental Indenture; provided that the 2004 Senior Convertible Notes are otherwise convertible in accordance with paragraph 7 of the reverse of the 2004 Senior Convertible Notes;
	(viii) that the Purchase Price or Fundamental Change Purchase Price for any 2004 Senior Convertible Notes as to which a Repurchase Notice or a Fundamental Change Purchase Notice, as applicable, has been given and not withdrawn shall be paid by the Paying Agent promptly following the later of the Repurchase Date or Fundamental Change Purchase Date, as applicable, or the time of book-entry transfer or delivery of such 2004 Senior Convertible Notes;
	(ix) the procedures the Holder must follow under Sections 1.07 or 1.08, as applicable, and this Section 1.09;
	(x) briefly, the conversion rights of the 2004 Senior Convertible Notes and whether, at the time of such notice, the Convertible Securities are eligible for conversion;
	(xi) that, unless the Company defaults in making payment of such Purchase Price or Fundamental Change Purchase Price on 2004 Senior Convertible Notes covered by any Repurchase Notice or Fundamental Change Purchase Notice, as applicable, interest will cease to accrue on and after the Repurchase Date or Fundamental Change Purchase Date, as applicable;
	(xii) the CUSIP and, if applicable, the ISIN number of the 2004 Senior Convertible Notes; and
	(xiii) the procedures for withdrawing a Repurchase Notice or Fundamental Change Purchase Notice.
Simultaneously with providing such Company Purchase Notice, the Company will publish a notice containing the information in such Company Purchase Notice in a newspaper of general circulation in The City of New York or publish such information on its then existing web site or through such other public medium as it may use at the time.
At the Company's request, made at least five Business Days prior to the date upon which such notice is to be mailed, and at the Company's expense, the Paying Agent shall give the Company Purchase Notice in the Company's name; provided, however, that, in all cases, the text of the Company Purchase Notice shall be prepared by the Company.
	(b) Effect of Repurchase Notice or Fundamental Change Purchase Notice. Upon receipt by the Paying Agent on behalf of the Company from the Holder of the Fundamental Change Purchase Notice or the Repurchase Notice specified in Section 1.07(b)(i) or Section 1.08(b)(i), as applicable, the Holder of the 2004 Senior Convertible Notes in respect of which such Fundamental Change Purchase Notice or the Repurchase Notice, as the case may be, was given shall (unless such Fundamental Change Purchase Notice or the Repurchase Notice is withdrawn as specified in the following two paragraphs) thereafter be entitled to receive solely the Fundamental Change Purchase Price or the Purchase Price with respect to such 2004 Senior Convertible Notes. Such Fundamental Change Purchase Price or Purchase Price shall be paid by the Paying Agent to such Holder promptly following the later of (x) the Fundamental Change Purchase Date or the Repurchase Date, as the case may be, with respect to such 20 04 Senior Convertible Notes (provided the conditions in Section 1.07(b) or Section 1.08(b), as applicable, have been satisfied), and (y) the time of delivery or book-entry transfer of such 2004 Senior Convertible Notes to the Paying Agent by the Holder thereof in the manner required by Section 1.07(b)(ii) or Section 1.08(b)(ii), as applicable. The 2004 Senior Convertible Notes in respect of which a Fundamental Change Purchase Notice or Repurchase Notice, as the case may be, has been given by the Holder thereof may not be converted on or after the date of the delivery of such Fundamental Change Purchase Notice or Repurchase Notice, as the case may be, unless such Fundamental Change Purchase Notice or Repurchase Notice, as the case may be, has first been validly withdrawn or deemed to have been validly withdrawn as specified in Section 1.09(c); provided that the 2004 Senior Convertible Notes are otherwise convertible in accordance with paragraph 7 of the reverse of the 2004 Senior Convertible Notes.
On or before 10:00 a.m. (New York City time) on the Fundamental Change Purchase Date or the Repurchase Date, as the case may be, the Company shall deposit with the Paying Agent (or if the Company or an Affiliate of the Company is acting as the Paying Agent, shall segregate and hold in trust) the Purchase Price consideration sufficient to pay the aggregate Fundamental Change Purchase Price or the aggregate Purchase Price, as the case may be, of the 2004 Senior Convertible Notes to be purchased pursuant to Section 1.07 or Section 1.08, as applicable. Payment by the Paying Agent of such Fundamental Change Purchase Price or Purchase Price for such 2004 Senior Convertible Notes shall be made promptly following the later of the Fundamental Change Purchase Date or the Repurchase Date, as the case may be, or the time of book-entry transfer or delivery of such 2004 Senior Convertible Notes. If the Paying Agent holds money sufficient to pay the Fundamental Change Purchase Price or Purc hase Price, as the case may be, of such 2004 Senior Convertible Notes on the Business Day following the Fundamental Change Purchase Date or the Repurchase Date, as the case may be, then, on and after such date, such 2004 Senior Convertible Notes shall cease to be outstanding and interest on such 2004 Senior Convertible Notes shall cease to accrue, whether or not book-entry transfer of such 2004 Senior Convertible Notes is made or such 2004 Senior Convertible Notes are delivered to the Paying Agent, and all other rights of the Holder shall terminate (other than the right to receive the Fundamental Change Purchase Price or the Purchase Price, as the case may be, upon delivery or transfer of the 2004 Senior Convertible Notes). Nothing herein shall preclude the Company withholding any tax required by law.
The Company shall require each Paying Agent (other than the Trustee) to agree in writing that the Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of the Fundamental Change Purchase Price or the Purchase Price, as the case may be, and shall notify the Trustee of any default by the Company in making any such payment. If the Company or an Affiliate of the Company acts as Paying Agent, it shall segregate the money held by it as Paying Agent and hold it as a separate trust fund. The Company at any time may require a Paying Agent to deliver all money held by it pursuant to this Section 1.09 to the Trustee and to account for any funds disbursed by the Paying Agent. Upon doing so, the Paying Agent shall have no further liability for the money delivered to the Trustee.
All questions as to the validity, eligibility (including time of receipt) and acceptance of any 2004 Senior Convertible Notes for purchase shall be determined by the Company, whose determination shall be final and binding, absent manifest error.
	(c) Withdrawal of a Repurchase Notice or Fundamental Change Purchase Notice. A Repurchase Notice or Fundamental Change Purchase Notice, as the case may be, may be withdrawn by means of a written notice of withdrawal delivered to the office of the Paying Agent at any time prior to 5:00 p.m. New York City time on the Repurchase Date or the Fundamental Change Purchase Date, as the case may be, to which it relates specifying:
		(i) if certificated, the certificate number of the 2004 Senior Convertible Notes in respect of which such notice of withdrawal is being submitted;
		(ii) the principal amount of the 2004 Senior Convertible Notes with respect to which such notice of withdrawal is being submitted; and
		(iii) the principal amount, if any, of such 2004 Senior Convertible Notes which remains subject to the Repurchase Notice or Fundamental Change Purchase Notice, as the case may be, and which has been or shall be transferred or delivered for purchase by the Company.
The Paying Agent shall promptly notify the Company of the receipt by it of any Repurchase Notice or Fundamental Change Purchase Notice or written notice of withdrawal thereof.
	(d) Notwithstanding the requirements of Sections 1.07 or 1.08 and this Section 1.09, if the 2004 Senior Convertible Notes are represented by Global Securities in book-entry form the appropriate procedures of the Depositary must be complied with for any purchase upon a Fundamental Change or Repurchase Option.
	(e) Effect of Event of Default. There shall be no purchase of any 2004 Senior Convertible Notes pursuant to Section 1.07 or Section 1.08 if an Event of Default has occurred and is continuing (other than a default that is cured by the payment of the Purchase Price or Fundamental Change Purchase Price, as the case may be). The Paying Agent shall promptly return to the respective Holders thereof any 2004 Senior Convertible Notes: (x) with respect to which a Repurchase Notice or Fundamental Change Purchase Notice, as the case may be, has been withdrawn in compliance with this Sixth Supplemental Indenture, or (y) held by it during the continuance of an Event of Default (other than a default that is cured by the payment of the Purchase Price or Fundamental Change Purchase Price, as the case may be) in which case, upon such return, the Repurchase Notice or Fundamental Change Purchase Notice with respect thereto shall be deemed to have been withdrawn.
	(f) 2004 Senior Convertible Notes Purchased in Part. Any 2004 Senior Convertible Notes that are to be purchased only in part shall be surrendered at the office of the Paying Agent (with, if the Company or the Trustee so requires, due endorsement by, or a written instrument of transfer in form satisfactory to the Company and the Trustee duly executed by, the Holder thereof or such Holder's attorney duly authorized in writing) and the Company shall execute and the Trustee or the Authenticating Agent, if any, shall authenticate and deliver to the Holder of such 2004 Senior Convertible Notes, without service charge, a new 2004 Senior Convertible Note or 2004 Senior Convertible Notes, of any authorized denomination, as requested by such Holder in aggregate principal amount equal to, and in exchange for, the portion of the principal amount of the 2004 Senior Convertible Notes so surrendered which is not purchased.
	(g) Covenant to Comply with Securities Laws Upon Purchase of 2004 Senior Convertible Notes. In connection with any offer to purchase 2004 Senior Convertible Notes under Sections 1.07 or 1.08 hereof, the Company shall, to the extent applicable, (i) comply with Rules 13e-4 and 14e-1 (and any successor provisions thereto) under the Exchange Act, if applicable, (ii) file the related Schedule TO (or any successor schedule, form or report) under the Exchange Act, if applicable and (iii) otherwise comply with all applicable federal and state securities laws so as to permit the rights and obligations under Sections 1.07, 1.08 or this Section 1.09 to be exercised in the manner specified in Sections 1.07, 1.08 or this Section 1.09; provided, however, that the Company shall not take any action in violation of any applicable federal or state securities laws.
	(h) Repayment to the Company. The Trustee and the Paying Agent shall return to the Company any cash or property that remains unclaimed as provided in Section 1003 of the Original Indenture, together with any unclaimed interest, held by them for the payment of a Purchase Price or Fundamental Change Purchase Price, as the case may be; provided, however, that to the extent that the aggregate amount of cash deposited by the Company pursuant to Section 1.09(b), as applicable, exceeds the aggregate Purchase Price or Fundamental Change Purchase Price, as the case may be, of the 2004 Senior Convertible Notes or portions thereof which the Company is obligated to purchase as of the Repurchase Date or Fundamental Change Purchase Date, as the case may be, then promptly on and after the Business Day following the Repurchase Date or Fundamental Change Purchase Date, as the case may be, the Trustee or the Paying Agent, as the case may be, shall return any such excess to the Company t ogether with any excess interest held by them for payment to Holders.
	(i) In any case where a Repurchase Date or a Fundamental Change Purchase Date shall not be a Business Day at any Place of Payment, then (notwithstanding any other provision of the Indenture or the 2004 Senior Convertible Notes) payment of interest and the Purchase Price or the Fundamental Change Purchase Price, as the case may be, need not be made at such Place of Payment on such date (provided that all other conditions therefor have been complied with), but may be made on the next succeeding Business Day at such Place of Payment (provided that such conditions have been complied with) with the same force and effect as if made on the Repurchase Date or the Fundamental Change Purchase Date, as the case may be (and without any interest or payment in respect of any such delay).
SECTION 1.10 Conversion of 2004 Senior Convertible Notes.
(a) Right to Convert. During the periods specified in paragraph 7 of the reverse of the 2004 Senior Convertible Notes, a Holder may convert its 2004 Senior Convertible Notes for cash and, if applicable, shares of Common Stock. Each $1,000 of Original Principal Amount of 2004 Senior Convertible Notes shall be convertible for cash equal the Principal Return and, if the Conversion Value exceeds the Accreted Principal Amount, the number of whole shares of Common Stock equal to the sum of the Daily Share Amounts for each Trading Day in the applicable Conversion Settlement Reference Period, as determined by the Company and confirmed in writing to the Trustee and the Conversion Agent, payable as set forth in Section 1.10(b). A Holder may convert a portion of the principal amount of 2004 Senior Convertible Notes if the portion is $1,000 or an integral multiple thereof.
(b) The Conversion Rate; Payment for Converted New Securities. The initial Conversion Rate is 16.2760 shares of Common Stock for each $1,000 Original Principal Amount of a 2004 Senior Convertible Note, subject to adjustment as herein set forth (the "Conversion Rate"). The Company shall pay to holders of converting 2004 Senior Convertible Notes as follows:
	(i) an amount in cash (the "Principal Return") equal to the lesser of (A) the aggregate Conversion Value of the 2004 Senior Convertible Notes to be converted, and (B) the aggregate Accreted Principal Amount of the 2004 Senior Convertible Notes to be converted;
	(ii) if the aggregate Conversion Value of the 2004 Senior Convertible Notes to be converted is greater than aggregate Accreted Principal Amount, the number of whole shares of Common Stock equal to the sum of the Daily Share Amounts for each Trading Day during the applicable Conversion Settlement Reference Period (the "Net Share Amount"); and
	(iii) an amount in cash in lieu of any fractional shares which would otherwise be payable as a result of the calculation in subsection (ii) above, calculated as provided in Section 1.10(d).
The Company shall determine the Conversion Value, the Principal Return and Net Share Amount promptly after the end of the applicable Conversion Settlement Reference Period.
(c) Conversion Procedures. To convert 2004 Senior Convertible Notes, the requirements set forth in this Section 1.10(d) and in paragraph 7 of the reverse of the 2004 Senior Convertible Notes must be satisfied.
	(i) To convert the 2004 Senior Convertible Notes, a Holder must: (1) complete and manually sign the irrevocable conversion notice on the back of the 2004 Senior Convertible Notes (or complete and manually sign a facsimile of such notice) and deliver such notice to the Conversion Agent at the office maintained by the Conversion Agent for such purpose, (2) with respect to 2004 Senior Convertible Notes in certificated form, surrender the 2004 Senior Convertible Notes to the Conversion Agent or with respect to 2004 Senior Convertible Notes represented by Global Securities, cause the book-entry transfer thereof to the Conversion Agent, (3) furnish appropriate endorsements and transfer documents if required by the Conversion Agent, the Company or the Trustee and (4) pay any transfer or similar tax, if required. The date on which the Holder satisfies all such requirements is the conversion date (the "Conversion Date"). As soon as practicable, but in no event later than the third Business Day following the determination of average Closing Sale Price during the Conversion Settlement Reference Period, the Company shall deliver to the Holder, through the Conversion Agent: (A) cash equal to the Principal Return, (B) if the Conversion Value exceeds the Accreted Principal Amount, a certificate (or credit the book-entry transfer of such shares of Common Stock) for the number of full shares of Common Stock issuable upon the conversion, and (C) cash in lieu of any fractional share determined pursuant to Section 1.10(d).
	(ii) Holders of 2004 Senior Convertible Notes at the close of business on a Regular Record Date will receive payment of interest payable on the corresponding Interest Payment Date notwithstanding the conversion of such 2004 Senior Convertible Notes at any time after the close of business on such Regular Record Date. The 2004 Senior Convertible Notes surrendered for conversion by a Holder during the period from the close of business on any Regular Record Date to the opening of business on the corresponding Interest Payment Date must be accompanied by payment of an amount equal to the interest that the Holder is to receive on the 2004 Senior Convertible Notes; provided, however, that no such payment need be made with respect to 2004 Senior Convertible Notes in respect of which a Redemption Date or Fundamental Change Purchase Date has been set that falls within this period or on such Interest Payment Date or to the extent any overdue interest exists at the time of such conversio n. Except as described above, no payment or adjustment will be made for accrued interest on converted 2004 Senior Convertible Notes. Upon conversion of 2004 Senior Convertible Notes, a Holder will not receive any cash payment of interest (unless such conversion occurs between a Regular Record Date and the Interest Payment Date to which it relates) and the Company will not adjust the Conversion Rate to account for accrued and unpaid interest.
	(iii) The Person in whose name any certificate for shares of Common Stock is registered shall be treated as a stockholder of record on and after the Conversion Date; provided, however, that no surrender of 2004 Senior Convertible Notes on any date when the stock transfer books of the Company shall be closed shall be effective to constitute the Person or Persons entitled to receive the shares of Common Stock upon such conversion as the record Holder or Holders of such shares of Common Stock on such date, but such surrender shall be effective to constitute the Person or Persons entitled to receive such shares of Common Stock as the record Holder or Holders thereof for all purposes at the close of business on the next succeeding day on which such stock transfer books are open; such conversion shall be at the Conversion Rate in effect on the date that such 2004 Senior Convertible Notes shall have been surrendered for conversion, as if the stock transfer books of the Company had n ot been closed. Upon conversion of 2004 Senior Convertible Notes, such Person shall no longer be a Holder of such 2004 Senior Convertible Notes.
	(iv) No payment or adjustment shall be made for dividends on or other distributions with respect to any Common Stock except as provided in Section 1.10(g). If a Holder converts more than one 2004 Senior Convertible Note at the same time, the amount of cash and the number of shares of Common Stock deliverable upon the conversion shall be based on the total principal amount of the 2004 Senior Convertible Notes converted. Upon surrender of a 2004 Senior Convertible Note that is converted in part, the Company shall execute, and the Trustee or the Authenticating Agent shall authenticate and deliver to the Holder, a new 2004 Senior Convertible Note in an authorized denomination equal in principal amount to the unconverted portion of the 2004 Senior Convertible Note surrendered. If the last day on which 2004 Senior Convertible Notes may be converted is not a Business Day in a place where a Conversion Agent is located, the 2004 Senior Convertible Notes may be surrendered to that Conv ersion Agent on the next succeeding day that is a Business Day. A Holder of 2004 Senior Convertible Notes is not entitled to any rights of a Holder of Common Stock until such Holder has converted its Senior Convertible Notes to Common Stock, and only to the extent such 2004 Senior Convertible Notes are deemed to have been converted into Common Stock pursuant to this Section 1.10.
	(v) In the event the Company exercises its option pursuant to Section 1.03(h) to have, in lieu of having the Accreted Principal Amount increase, interest accrue on the 2004 Senior Convertible Note following a Tax Event, the Holder will be entitled on conversion to receive the same amount upon conversion of such 2004 Senior Convertible Note as such Holder would have received if the Company had not exercised such option. Increases in the Accreted Principal Amount and cash interest (including Contingent Interest, if any, and interest payable upon the occurrence of a Tax Event, if any) will not be paid on 2004 Senior Convertible Notes that are converted, except accrued cash interest will be payable upon conversion of 2004 Senior Convertible Notes made concurrently with or after acceleration of 2004 Senior Convertible Notes following the Event of Default.
	(vi) If a Holder of 2004 Senior Convertible Notes has already delivered a Fundamental Change Purchase Notice or Repurchase Notice with respect to a 2004 Senior Convertible Note, then the Holder may not surrender such 2004 Senior Convertible Note for conversion until the Holder has withdrawn the applicable Fundamental Change Purchase Notice or Repurchase Notice in accordance with the provisions hereof.
	(vii) On conversion of a 2004 Senior Convertible Note, increases in the Accreted Principal Amount or cash interest (or interest if the Company has exercised its option provided for in Section 1.03(h) hereof) attributable to the period from the Original Issue Date (or, if the Company has exercised the option provided for in Section 1.03(h) hereof, the later of (x) the date of such exercise and (y) the date on which interest was last paid) through the Conversion Date shall not be cancelled, extinguished or forfeited, but rather shall be deemed to be paid in full to the Holder thereof through the delivery of the cash and shares of Common Stock, if any, in exchange for the 2004 Senior Convertible Note being converted pursuant to the terms of the 2004 Senior Convertible Notes, and the cash and shares of Common Stock shall be treated as issued, to the extent thereof, first in exchange for increases in the Accreted Principal Amount or cash interest (or interest, if the Company has e xercised its option provided for in Section 1.03(h) hereof) accrued through the Conversion Date, and the balance, if any, of shall be treated as issued in exchange for the Original Principal Amount of the 2004 Senior Convertible Note being converted pursuant to the provisions of the 2004 Senior Convertible Notes.
(d) Cash Payments in Lieu of Fractional Shares. The Company shall not issue a fractional share of Common Stock upon conversion of 2004 Senior Convertible Notes. Instead the Company shall deliver cash for the current market value of the fractional share. The current market value of a fractional share shall be determined to the nearest 1/10,000th of a share by multiplying the average of the Closing Sale Prices during the applicable Conversion Settlement Reference Period by the fractional amount and rounding the product to the nearest whole cent.
(e) Taxes on Conversion. If a Holder converts 2004 Senior Convertible Notes, the Company shall pay any documentary, stamp or similar issue or transfer tax due on the issue of any shares of Common Stock upon the conversion. However, the Holder shall pay any such tax which is due because the Holder requests the shares of Common Stock to be issued in a name other than the Holder's name. The Conversion Agent may refuse to deliver the certificates representing the Common Stock being issued in a name other than the Holder's name until the Conversion Agent receives a sum sufficient to pay any tax which shall be due because the shares are to be issued in a name other than the Holder's name. Nothing herein shall preclude the Company's withholding any tax required by law.
(f) Covenants of the Company. The Company shall, prior to issuance of any 2004 Senior Convertible Notes hereunder, and from time to time as may be necessary, reserve out of its authorized but unissued Common Stock a sufficient number of shares of Common Stock to permit the payment of any Common Stock portion of the amount payable upon conversion of the 2004 Senior Convertible Notes, as provided in Section 1.10(b)(ii), upon conversion of the 2004 Senior Convertible Notes. All shares of Common Stock delivered upon conversion of the 2004 Senior Convertible Notes shall be newly issued shares or treasury shares, shall be duly and validly issued and fully paid and nonassessable and shall be free from preemptive rights and free of any lien or adverse claim. The Company shall endeavor promptly to comply with all federal and state securities laws regulating the order and delivery of shares of Common Stock upon the conversion of 2004 Senior Convertible Notes, if any, and shall c ause to have listed or quoted all such shares of Common Stock on the New York Stock Exchange, or, if not listed thereon, on each United States national securities exchange or over-the-counter or other domestic market on which the Common Stock is then listed or quoted.
(g) Adjustments to Conversion Rate. The Conversion Rate shall be adjusted from time to time by the Company as follows:
	(i) In case the Company shall pay or make a dividend or other distribution on the Common Stock in Common Stock, the Conversion Rate, as in effect at the opening of business on the day following the date fixed for the determination of stockholders entitled to receive such dividend or other distribution, shall be increased by dividing such Conversion Rate by a fraction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination and the denominator shall be the sum of such number of shares and the total number of shares constituting such dividend or other distribution, such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this Section 1.10(g)(i), the number of shares of Common Stock at any time outstanding shall not include shares held in treasury by the Company but shall include any shares is suable in respect of any scrip certificates issued in lieu of fractions of shares of Common Stock. The Company will not pay any dividend or make any distribution on shares of Common Stock held in treasury by the Company.
	(ii) In case the Company shall issue rights, options or warrants (other than pursuant to any dividend reinvestment or share purchase plans) to all Holders of its Common Stock (not being available on an equivalent basis to Holders of the 2004 Senior Convertible Notes upon conversion of such 2004 Senior Convertible Notes) entitling them, for a period expiring within 60 days after the record date for the determination of stockholders entitled to receive such rights, options or warrants, to subscribe for or purchase shares of Common Stock at a price per share less than the Current Market Price per share of the Common Stock on the date fixed for the determination of stockholders entitled to receive such rights, options or warrants (other than pursuant to a dividend reinvestment plan or share purchase plan), the Conversion Rate in effect at the opening of business on the day following the date fixed for such determination shall be increased by dividing such Conversion Rate by a fra ction of which the numerator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock so offered for subscription or purchase would purchase at such Current Market Price and the denominator shall be the number of shares of Common Stock outstanding at the close of business on the date fixed for such determination plus the number of shares of Common Stock so offered for subscription or purchase at such below Current Market Price, such increase to become effective immediately after the opening of business on the day following the date fixed for such determination. For the purposes of this Section 1.10(g)(ii), the number of shares of Common Stock at any time outstanding shall not include shares held in treasury by the Company but shall include any shares issuable in respect of any scrip certificates issued in lieu of fraction s of shares of Common Stock. The Company shall not issue any such rights, options or warrants in respect of shares of Common Stock held in treasury by the Company.
	(iii) In case outstanding shares of Common Stock shall be subdivided or split into a greater number of shares of Common Stock, the Conversion Rate in effect at the opening of business on the day following the day upon which such subdivision or split becomes effective shall be proportionately increased, and, conversely, in case outstanding shares of Common Stock shall each be combined into a smaller number of shares of Common Stock, the Conversion Rate in effect at the opening of business on the day following the day upon which such combination becomes effective shall be proportionately reduced, such increase or reduction, as the case may be, to become effective immediately after the opening of business on the day following the day upon which such subdivision, split or combination becomes effective.
	(iv) In case the Company shall, by dividend or otherwise, distribute to all Holders of its Common Stock evidences of its indebtedness, shares of capital stock, securities, cash or other property (but excluding any rights, options or warrants referred to in Section 1.10(g)(ii) of this Section, any dividend or distribution paid exclusively in cash and any dividend or distribution referred to in Section 1.10(g)(i)), the Conversion Rate shall be adjusted by dividing the Conversion Rate in effect immediately prior to the close of business on the date fixed for the determination of stockholders entitled to receive such distribution by a fraction of which the numerator shall be the Current Market Price per share of the Common Stock on the date fixed for such determination less the then fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) on such date of the portion of the evidences of indebtedness, s hares of capital stock, securities, cash or other property so distributed applicable to one share of Common Stock and the denominator shall be such Current Market Price per share of the Common Stock, such adjustment to become effective immediately prior to the opening of business on the day following the date fixed for the determination of stockholders entitled to receive such distribution; provided, however, that in the event that the Company makes a distribution to all Holders of its Common Stock consisting of capital stock of, or similar equity interests in, a subsidiary of the Company, the Conversion Rate shall be adjusted by dividing the Conversion Rate in effect immediately prior to the close of business on the date fixed for the determination of stockholders entitled to receive such distribution by a fraction of which the numerator shall be the Spin-off Market Price per share of the Common Stock on the date fixed for such determination less the Spin-off Market Price per share or similar equity interes t of the subsidiary of the Company on such date and the denominator shall be the Spin-off Market Price per share of the Common Stock, such adjustment to become effective 10 trading days after the effective date of such distribution of capital stock of, or similar equity interest in, a subsidiary or other business unit of the Company. In any case in which this Section 1.10(g)(iv) is applicable, Sections 1.10(g)(i) and (ii) shall not be applicable.
	(v) In case the Company shall, (I) by dividend or otherwise, distribute to all Holders of its Common Stock cash (excluding (i) any cash that is distributed in an event to which Section 1.10(h)(iv) applies or (ii) cash that is distributed as part of a distribution referred to in Section 1.10(g)(iv)) in an aggregate amount that, combined together with (II) the aggregate amount of any other distributions to all Holders of its Common Stock made exclusively in cash within the quarterly fiscal period containing the date of payment of such distribution and in respect of which no adjustment pursuant to this Section 1.10(g)(v) or Section 1.10(g)(vi) has been made and (III) the aggregate of any cash plus the fair market value of any securities or other property, as of the expiration of the applicable tender or exchange offer referred to below (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution), of consideration payable in respect of any tender or exchange offer (other than consideration payable in respect of any odd-lot tender offer) by the Company or any of its subsidiaries for all or any portion of the Common Stock concluded within the quarterly fiscal period containing the date of payment of the distribution described in clause (I) above and in respect of which no adjustment pursuant to this Section 1.10(g)(v) or Section 1.10(g)(vi) has been made, exceeds the product of $0.13 (appropriately adjusted from time to time for any stock dividends on or subdivisions or combinations of Common Stock) multiplied by the number of shares of Common Stock outstanding on such date, then, and in each such case, immediately after the close of business on such date for determination, the Conversion Rate shall be increased so that the same shall equal the rate determined by dividing the Conversion Rate in effect immediately prior to the close of business on the date fixed for determination of the stockholders entitled to receive such dist ribution by a fraction (i) the numerator of which shall be equal to the Current Market Price per share of the Common Stock on the date fixed for such determination plus $0.13 (appropriately adjusted from time to time for any stock dividends on or subdivisions or combination of Common Stock) less an amount equal to the quotient of (x) the combined amount distributed or payable in the transactions described in clauses (I), (II) and (III) above and (y) the number of shares of Common Stock outstanding on such date for determination and (ii) the denominator of which shall be equal to the Current Market Price per share of the Common Stock on such date for determination.
	(vi) In case (I) a tender or exchange offer made by the Company or any subsidiary of the Company for all or any portion of the Common Stock (other than consideration payable in respect of any odd-lot tender offer) shall expire and such tender or exchange offer (as amended upon the expiration thereof) shall require the payment to stockholders (based on the acceptance (up to any maximum specified in the terms of the tender or exchange offer) of Purchased Shares) of an aggregate consideration having a fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution) that combined together with (II) the aggregate of the cash plus the fair market value (as determined by the Board of Directors, whose determination shall be conclusive and described in a Board Resolution), as of the expiration of such tender or exchange offer, of consideration payable in respect of any other tender or exchange offer (other than co nsideration payable in respect of any odd-lot tender offer) by the Company or any subsidiary of the Company for all or any portion of the Common Stock expiring within the quarterly fiscal period containing the expiration of such tender or exchange offer and in respect of which no adjustment pursuant to Section 1.10(g)(v) or this Section 1.10(g)(vi) has been made and (III) the aggregate amount of any distributions to all Holders of the Company's Common Stock made exclusively in cash within the quarterly fiscal period containing the expiration of such tender or exchange offer and in respect of which no adjustment pursuant to Section 1.10(g)(v) or this Section 1.10(g)(vi) has been made, exceeds the Current Market Price per share of Common Stock on the Trading Day next succeeding the last time (the "Expiration Time") tenders could have been made pursuant to such tender or exchange offer (as it may be amended), then, and in each such case, immediately prior to the opening of business on the day after th e date of the Expiration Time, the Conversion Rate shall be adjusted so that the same shall equal the rate determined by dividing the Conversion Rate immediately prior to the close of business as of the Expiration Time by a fraction (i) the numerator of which shall be equal to (A) the product of (1) the Current Market Price per share of the Common Stock as of the Expiration Time and (2) the number of shares of Common Stock outstanding (including any tendered shares) as of the Expiration Time less (B) the amount of cash plus the fair market value (determined as aforesaid) of the aggregate consideration payable to stockholders based on the transactions described in clauses (I), (II) and (III) above (assuming in the case of clause (I) the acceptance, up to any maximum specified in the terms of the tender or exchange offer, of Purchased Shares), and (ii) the denominator of which shall be equal to the product of (A) the Current Market Price per share of the Common Stock as of the Expiration Time and (B) the numbe r of shares of Common Stock outstanding (including any tendered shares) as of the Expiration Time less the number of all shares validly tendered and not withdrawn as of the Expiration Time (the shares deemed so accepted, up to any such maximum, being referred to as the "Purchased Shares").
	(vii) If a Cash Take-Over Transaction occurs prior to July 31, 2010, and except as provided in Section 1.10(g)(viii) below, for any conversion of the 2004 Senior Convertible Notes in connection with the Cash Take-Over Transaction, the Company will increase the number of shares of Common Stock payable upon conversion of the New Securities in connection with the Cash Take-Over Transaction by a number of Additional Shares determined by the Effective Date of the Cash Take-Over Transaction and the applicable Stock Price (adjusted as set forth below) as set forth on the table contained as Exhibit D to this Indenture.
	The Stock Prices set forth on the table set forth on Exhibit D hereto will be adjusted as of any date on which the Conversion Rate is adjusted. On such date, the Stock Prices shall be adjusted by multiplying: the Stock Prices applicable immediately prior to such adjustment, by a fraction, of which (x) the numerator is the Conversion Rate immediately prior to the adjustment giving rise to the Stock Price adjustment, and (y) the denominator of which is the Conversion Rate so adjusted.
	(viii) In the event of a Cash Take-Over Transaction which is also a Public Acquirer Change of Control, the Company may, in lieu of increasing the Conversion Rate by the Additional Shares pursuant to Section 1.10(g)(vii) above, elect to adjust the Conversion Rate such that from and after the Effective Date of such Public Acquirer Change of Control, Holders of the 2004 Senior Convertible Notes will be entitled to convert their Notes for an amount equal to the product of multiplying the Conversion Rate in effect immediately before the Public Acquirer Change of Control by a fraction:
	(1) the numerator of which will be (a) in the case of a share exchange, consolidation, merger, binding share exchange, or sale of all or substantially all of the assets pursuant to which the outstanding shares of Common Stock are converted into cash, securities or other property, the fair market value of all cash and any other consideration (as determined by the Board of Directors) paid or payable with respect to each share of Common Stock, or (b) in the case of any other Public Acquirer Change of Control, the average of the Closing Sale Price of the Common Stock for the five consecutive Trading Days immediately preceding but excluding the Effective Date of such Public Acquirer Change of Control, and
	(2) the denominator of which will be the average of the Closing Sale Price of the Public Acquirer Common Stock for the five consecutive Trading Days prior to but not including the Effective Date of such Public Acquirer Change of Control.
	The Company will notify Holders of its election by providing a public company acquisition notice at least five Trading Days prior to, but not including, the expected Effective Date of such Public Acquirer Change of Control, as set forth in Paragraph 7 of the reverse of the 2004 Senior Convertible Notes. The amount payable upon conversion of 2004 Senior Convertible Notes upon an election by the Company under this Section 1.10(g)(viii) shall be settled as provided in Section 1.10(b) provided that in lieu of the Common Stock payable under Section 1.10(b)(ii) there shall be paid that number of whole shares of Public Acquirer Common Stock, calculated in the same manner.
	(ix) All adjustments to the Conversion Rate, shall be calculated to the nearest 1/10,000th of a share of Common Stock (or if there is not a nearest 1/10,000th of a share to the next lower 1/10,000th of a share). No adjustment in the Conversion Rate shall be required unless such adjustment would require an increase or decrease of at least one percent therein; provided, however, that any adjustments which by reason of this subparagraph are not required to be made because they would have required an increase or decrease of less than one percent shall be carried forward and taken into account in any subsequent adjustment.
	(x) Notwithstanding the foregoing provisions of Section 1.10(g)(ii) or (iv), no adjustment shall be made thereunder, nor shall an adjustment be made to the ability of a Holder of a Note to convert, for any distribution described therein if the Holder will otherwise participate in the distribution without conversion of such Holder's Senior Convertible Notes.
	(xi) No adjustment pursuant to the Conversion Rate or a Holder's ability to convert pursuant to this Section 1.10(g) shall be made in connection with the issuance of rights, the distribution of separate certificates representing rights or the exercise, redemption, termination or invalidation of rights pursuant to any stockholder rights plan implemented by the Company which provides that, upon conversion of the 2004 Senior Convertible Notes, the Holders shall receive, in addition to the Common Stock issuable upon such conversion, the rights issued under such stockholder rights plan (notwithstanding the occurrence of an event causing such rights to separate from the Common Stock at or prior to the time of conversion).
	(h) Miscellaneous Provisions Relating to Conversion.
	(i) When No Adjustment Required. No adjustment to the Conversion Rate need be made:
		(1) upon the issuance of any shares of Common Stock pursuant to any present or future plan providing for the reinvestment of dividends or interest payable on securities of the Company and the investment of additional optional amounts in shares of Common Stock under any plan;
		(2) upon the issuance of any shares of Common Stock or options or rights to purchase those shares pursuant to any present or future employee, director or consultant benefit plan or program of or assumed by the Company or any of its Subsidiaries;
		(3) upon the issuance of any shares of Common Stock pursuant to any option, warrant, right, or exercisable, exchangeable or convertible security not described in (2) above and outstanding as of the date the 2004 Senior Convertible Notes were first issued;
		(4) for a change in the par value of the Common Stock; or
		(5) for accrued and unpaid interest.
	To the extent the 2004 Senior Convertible Notes become convertible into cash, assets or property (other than capital stock of the Company or securities to which Section 1.10(h)(iv) applies), no adjustment shall be made thereafter as to the cash, assets or property. Interest shall not accrue on such cash, assets or property.
	(ii) Notice of Adjustment. Whenever the Conversion Rate is adjusted, the Company shall promptly mail to Holders a notice of the adjustment. The Company shall file with the Trustee and the Conversion Agent such notice. The certificate shall, absent manifest error, be conclusive evidence that the adjustment is correct. Neither the Trustee nor any Conversion Agent shall be under any duty or responsibility with respect to any such certificate except to exhibit the same to any Holder desiring inspection thereof.
	(iii) Voluntary Increase. The Company may make such increases in the Conversion Rate, in addition to those required by Section 1.10(g), as the Board of Directors considers to be advisable to avoid or diminish any income tax to Holders of Common Stock or rights to purchase Common Stock resulting from any dividend or distribution of stock (or rights to acquire Common Stock) or from any event treated as such for income tax purposes. To the extent permitted by applicable law, the Company may from time to time increase the Conversion Rate by any amount for any period of time if the period is at least 20 days, the increase is irrevocable during the period and the Board of Directors shall have made a determination that such increase would be in the best interests of the Company, which determination shall be conclusive. Whenever the Conversion Rate is so increased, the Company shall mail to Holders and file with the Trustee and the Conversion Agent a notice of such increase. N either the Trustee nor any Conversion Agent shall be under any duty or responsibility with respect to any such notice except to exhibit the same to any Holder desiring inspection thereof. The Company shall mail the notice at least 15 days before the date the increased Conversion Rate takes affect. The notice shall state the increased Conversion Rate and the period it shall be in effect.
	(iv) Effect of Reclassification, Consolidation, Merger, Binding Share Exchange or Sale. If any of the following events occur, namely (a) any reclassification or change of outstanding shares of Common Stock (other than a change in par value, or from par value to no par value, or from no par value to par value, or as a result of a subdivision or combination), (b) any consolidation, merger or binding share exchange of the Company with another corporation as a result of which Holders of Common Stock shall be entitled to receive stock, securities or other property or assets (including cash) with respect to or in exchange for such Common Stock or (c) any sale or conveyance of all or substantially all of the assets of the Company to any other corporation as a result of which Holders of Common Stock shall be entitled to receive stock, securities or other property or assets (including cash) with respect to or in exchange for such Common Stock, then the Conversion Rate will not be adjusted. If any of the events described in the preceding sentence occur, the Company or the successor or purchasing corporation, as the case may be, shall execute with the Trustee a supplemental indenture or otherwise amend the terms of the 2004 Senior Convertible Notes, to provide that each Senior Convertible Note shall be convertible into the kind and amount of shares of stock, other securities or property or assets (including cash) that the Holder of the 2004 Senior Convertible Note would have received upon such reclassification, change, consolidation, merger, binding share exchange, sale or conveyance if such Holder had converted such 2004 Senior Convertible immediately prior to such reclassification, change, consolidation, merger, combination, binding share exchange, sale or conveyance. Such supplemental indenture or other amendment to the 2004 Senior Convertible Notes shall provide for adjustments which shall be as nearly equivalent as may be practicable to the adjustments provided for in this Sect ion 1.10(h)(iv). The Company shall cause notice of the execution of such supplemental indenture or amendment of the 2004 Senior Convertible Notes to be mailed to each Holder, at its address appearing on the 2004 Senior Convertible Note register, within 20 days after execution thereof. Failure to deliver such notice shall not affect the legality or validity of such supplemental indenture. The above provisions of this Section shall similarly apply to successive reclassifications, changes, consolidations, mergers, combinations, binding share exchanges, sales and conveyances. If this Section 1.10(h)(iv) applies to any event or occurrence, Section 1.10(g) shall not apply.
	(v) Responsibility of Trustee. The Trustee and any other Conversion Agent shall not at any time be under any duty or responsibility to any Holder to determine whether any facts exist which may require any adjustment of the Conversion Rate and shall be protected in relying upon an Officers' Certificate with respect to the same. The Trustee and any other Conversion Agent shall not be accountable with respect to the validity or value (or the kind or amount) of any shares of Common Stock, or of any securities or property, which may at any time be issued or delivered upon the conversion of any 2004 Senior Convertible Notes and the Trustee and any other Conversion Agent make no representations with respect thereto. Neither the Trustee nor any Conversion Agent shall be responsible for any failure of the Company to issue, transfer or deliver any shares of Common Stock or stock certificates or other securities or property or cash upon the surrender of any 2004 Senior Convertibl e Notes for the purpose of conversion or to comply with any of the duties, responsibilities or covenants of the Company contained in this Section 1.10. Without limiting the generality of the foregoing, neither the Trustee nor any Conversion Agent shall be under any responsibility to determine the correctness of any provisions contained in any supplemental indenture entered into pursuant to Section 1.10(h)(iv) relating either to the kind or amount of shares of stock or securities or other property or assets (including cash) receivable by Holders upon the conversion of their Senior Convertible Notes after any event referred to in such Section 1.10(h)(iv) or to any adjustment to be made with respect thereto, but, subject to the provisions of Article Six of the Indenture, may accept as conclusive evidence of the correctness of any such provisions, and shall be protected in relying upon, the Officers' Certificate (which the Company shall be obligated to file with the Trustee prior to the execution of any such sup plemental indenture) with respect thereto. Neither the Trustee nor the Conversion Agent shall be responsible for determining whether any event contemplated by the paragraph 7 of the reverse of the 2004 Senior Convertible Notes has occurred which makes the 2004 Senior Convertible Notes eligible for conversion or no longer eligible therefor until the Company has delivered to the Trustee and the Conversion Agent an Officers' Certificate stating that such event has occurred, on which Certificate the Trustee and the Conversion Agent may conclusively rely, and the Company agrees to deliver such Officers' Certificate to the Trustee and the Conversion Agent immediately after the occurrence of any such event.
In no event shall the Trustee or the Conversion Agent be liable for any indirect, special, punitive or consequential loss or damage of any kind whatsoever, including, but not limited to, lost profits, even if the Trustee or the Conversion Agent have been advised of the likelihood of such loss or damage and regardless of the form of action.
In no event shall the Trustee or the Conversion Agent be liable for any failure or delay in the performance of its obligations hereunder because of circumstances beyond its control, including, but not limited to, acts of God, flood, war (whether declared or undeclared), terrorism, fire, riot, embargo, government action, including any laws, ordinances, regulations, governmental action or the like which delay, restrict or prohibit the providing of the services contemplated by this Indenture.
	(vi) Successive Adjustments. After an adjustment to the Conversion Rate under Section 1.10(g), any subsequent event requiring an adjustment under Section 1.10(g) shall cause an adjustment to the Conversion Rate as so adjusted.
	(vii) General Considerations. Whenever successive adjustments to the Conversion Rate are called for pursuant to Sections 1.10(g) or 1.10(h), such adjustments shall be made to the Current Market Price as may be necessary or appropriate to effectuate the intent of 1.10(g) or 1.10(h) and to avoid unjust or inequitable results as determined in good faith by the Board of Directors.
(i) On conversion of a 2004 Senior Convertible Note, a Holder shall receive no payment for that portion of accrued and unpaid interest on the converted 2004 Senior Convertible Note attributable to the period from the most recent Interest Payment Date (or, if no Interest Payment Date has occurred, from the Original Issue Date) through the Conversion Date with respect to the converted 2004 Senior Convertible Note.
SECTION 1.11 Additional Events of Default; Withholding Notice; Rescission. (a) In addition to those matters set forth in Section 501 of the Original Indenture, an "Event of Default" with respect to the 2004 Senior Convertible Notes shall also mean any of the following events:
	(i) default in the Company's obligation to repurchase 2004 Senior Convertible Notes upon the Company's exercise of its repurchase option pursuant to Section 1.06, upon the occurrence of a Fundamental Change pursuant to Section 1.07 or upon the exercise by a Holder of its option to require the Company to repurchase such Holder's Senior Convertible Notes pursuant to Section 1.08; or
	(ii) default in the Company's obligation to convert the 2004 Senior Convertible Notes upon exercise of a Holder's conversion rights pursuant to Section 1.10 hereof; or
	(iii) default by the Company in its obligation to provide notice of a Fundamental Change.
(b) The Trustee may withhold from the Holders notice of any continuing default or Event of Default (except a default or Event of Default in the payment of principal of, or interest on the 2004 Senior Convertible Notes) if it determines in good faith that withholding notice is in the Holders' interest.
(c) The Holders of a majority in aggregate principal amount of the 2004 Senior Convertible Notes then outstanding by notice to the Trustee may rescind any acceleration of the 2004 Senior Convertible Notes and its consequences if all existing Events of Default (other than the nonpayment of principal of, interest, Contingent Interest, if any, on the 2004 Senior Convertible Notes that has become due solely by virtue of such acceleration) have been cured or waived and if the rescission would not conflict with any judgment or decree of any court of competent jurisdiction. No such rescission will affect any subsequent default or Event of Default or impair any right consequent thereto.
SECTION 1.12 Amendment; Supplement; and Waiver. In addition to those matters set forth in Section 902 of the Original Indenture, with respect to the 2004 Senior Convertible Notes, no amendment or supplemental indenture shall without the consent of the Holder of each Senior Convertible Note affected thereby:
(a) reduce the percentage of the Original Principal Amount of 2004 Senior Convertible Notes whose Holders must consent to an amendment, supplement or waiver;
(b) reduce the principal of, or premium on, or change the fixed Stated Maturity of any 2004 Senior Convertible Note or, except as permitted pursuant to clause (s), (v), (y) or (z) of the immediately following paragraph, alter the provisions with respect to the redemption or repurchase of the 2004 Senior Convertible Notes;
(c) reduce the rate of or change the time for payment of interest, including Contingent Interest, or defaulted interest on any 2004 Senior Convertible Notes;
(d) waive a Default or Event of Default in the payment of principal of or premium, if any, or interest (including Contingent Interest, if any) on the 2004 Senior Convertible Notes (except a rescission of acceleration of the 2004 Senior Convertible Notes by the Holders of at least a majority in aggregate Accreted Principal Amount of the 2004 Senior Convertible Notes and a waiver of the payment default that resulted from such acceleration);
(e) make the principal of, or premium, if any, or interest (including Contingent Interest, if any) on, any 2004 Senior Convertible Note payable in money other than as provided for in the Indenture and in the 2004 Senior Convertible Notes;
(f) make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of Holders of 2004 Senior Convertible Notes to receive payments of principal of, premium, if any, or interest (including Contingent Interest, if any) on the 2004 Senior Convertible Notes;
(g) waive a redemption or repurchase payment with respect to any 2004 Senior Convertible Note;
(h) except as permitted by the Indenture, increase the Conversion Price or modify the provisions of the Indenture relating to conversion of the 2004 Senior Convertible Notes in a manner adverse to the Holders;
(i) make any change to the abilities of Holders of 2004 Senior Convertible Notes to enforce their rights under the Indenture or the foregoing provisions of this Section 1.12 or this provision;
(j) reduce the Redemption Price, Purchase Price or Fundamental Change Purchase Price of the 2004 Senior Convertible Notes; or
(k) make any change that adversely affects the right to convert the 2004 Senior Convertible Notes.
Notwithstanding the foregoing, without the consent of any Holder, the Company and the Trustee may amend or supplement the Indenture or the 2004 Senior Convertible Notes to:
(s) cure any ambiguity, defect or inconsistency or make any other changes in the provisions of the Indenture which they may deem necessary or desirable, provided such amendment does not materially and adversely affect the 2004 Senior Convertible Notes;
(t) provide for uncertificated 2004 Senior Convertible Notes in addition to or in place of certificated Senior Convertible Notes;
(u) provide for the assumption of the Company's obligations to Holders of 2004 Senior Convertible Notes in the circumstances required under the Indenture;
(v) provide for exchange rights of Holders of 2004 Senior Convertible Notes in certain events;
(w) reduce the Conversion Price;
(x) evidence and provide for the acceptance of the appointment under the Indenture of a successor Trustee;
(y) make any change that would provide any additional rights or benefits to the Holders of Senior Convertible Notes or that does not adversely affect the legal rights under the Indenture of any such Holder; or
(z) comply with requirements of the SEC in order to effect or maintain the qualification of the Indenture under the Trust Indenture Act of 1939.
In addition, with respect to the 2004 Senior Convertible Notes, to the extent set forth in Section 513 of the Original Indenture, the Holders of at least a majority in aggregate principal amount of the Outstanding 2004 Senior Convertible Notes may waive an existing default other than: (a) any default by the Company in any payment of the Redemption Price, Purchase Price or Fundamental Change Purchase Price with respect to any 2004 Senior Convertible Notes, or (b) any default which constitutes a failure to convert any 2004 Senior Convertible Note in accordance with its terms and the Indenture.
SECTION 1.13 Register of Securities; Paying Agent; Conversion Agent. Initially, the Trustee shall act as Paying Agent, Conversion Agent and Security Registrar with respect to the 2004 Senior Convertible Notes with the Place of Payment for the 2004 Senior Convertible Notes initially being the Corporate Trust Office. The Company may appoint and change any Paying Agent, Conversion Agent, Security Registrar or co-registrar or approve a change in the office through which any Paying Agent acts without notice, other than notice to the Trustee. The Company or any of its Subsidiaries or any of their Affiliates may act as Paying Agent, Conversion Agent, Security Registrar or co-registrar.
SECTION 1.14 Calculations in Respect of the 2004 Senior Convertible Notes. The Trustee will act as Calculation Agent and will, in consultation with the Company, make all calculations called for under the 2004 Senior Convertible Notes other than calculations of interest. These calculations include, but are not limited to, determination of the Trading Price, Current Market Price, Closing Sale Price, interest rate on the 2004 Senior Convertible Notes, Conversion Rate, and Principal Return of the 2004 Senior Convertible Notes. The Trustee, in consultation with the Company, will make these calculations in good faith and, absent manifest error, these calculations will be final and binding on the Holders. The Trustee will forward its calculations to any Holder upon the request of such Holder.
SECTION 1.15 Tax Treatment. The Company hereby agrees, and by purchasing a beneficial ownership interest in the 2004 Senior Convertible Notes each Holder, and any person (including an entity) that acquires a direct or indirect beneficial interest in the 2004 Senior Convertible Notes, will be deemed to have agreed (i) for United States Federal income tax purposes to treat the 2004 Senior Convertible Notes as indebtedness of the Company that is subject to Treas. Reg. Sec. 1.1275-4 (the "Contingent Payment Regulations"), (ii) for all tax purposes to treat the 2004 Senior Convertible Notes as indebtedness of the Company, (iii) for purposes of the Contingent Payment Regulations to treat the cash and fair market value of any Common Stock beneficially received by a beneficial Holder upon any conversion of the 2004 Senior Convertible Notes (or cash in lieu of Common Stock) as a contingent payment, and (iv) to be bound by the Company's projected payment schedule with respect to the 2004 Senior Convertible Notes. The provisions of this Indenture shall be interpreted to further this intention and agreement of the parties. The comparable yield and the schedule of projected payments are not determined for any purpose other than for the determination of interest accruals and adjustment thereof in respect of the 2004 Senior Convertible Notes for United States Federal income tax purposes. The comparable yield and the schedule of projected payments do not constitute a projection or representation regarding the future stock price or the amounts payable on the 2004 Senior Convertible Notes. For purposes of the foregoing, the Company's determination of the "comparable yield" is 8.28% per annum, compounded semiannually. A Holder of Senior Convertible Notes may obtain the Yield to Maturity, Issue Date, Comparable Yield and Projected Payment Schedule (which Schedule is attached hereto as Exhibit C) by submitting a written request to Bausch & Lomb Incorporated, One Bausch & Lomb Place Rochester, New York 14604, Attention: Chief Financial Officer.
SECTION 1.16 Transfer and Exchange.
(a) Transfer and Exchange of Definitive Securities. When Definitive Securities are presented to the Registrar with a request:
	(i) to register the transfer of such Definitive Securities; or
	(ii) to exchange such Definitive Securities for an equal principal amount of Definitive Securities of other authorized denominations, the Registrar shall register the transfer or make the exchange as requested if its reasonable requirements for such transaction are met; provided, however, that the Definitive Securities surrendered for transfer or exchange:
		(A) shall be duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Registrar, duly executed by the Holder thereof or his attorney duly authorized in writing; and
		(B) are accompanied by the following additional information and documents, as applicable, if such Definitive Securities are Transfer Restricted Securities:
				(x) if such Definitive Securities are being delivered to the Registrar by a Holder for registration in the name of such Holder, without transfer, a certification from such Holder to that effect (in the form set forth on the reverse side of the Transfer Restricted Security); or
				(y) if such Definitive Securities are being transferred to the Company, a certification to that effect (in the form set forth on the reverse side of the Transfer Restricted Security); or
			(C) if such Definitive Securities are being transferred pursuant to an exemption from registration in accordance with Rule 144 under the Securities Act or in reliance upon another exemption from the registration requirements of the Securities Act, (i) a certification to that effect (in the form set forth on the reverse side of the Transfer Restricted Security) and (ii) if the Company so requests, an opinion of counsel or other evidence reasonably satisfactory to it as to the compliance with the restrictions set forth in the legend set forth in Section 1.16(e)(i).
In case of redemption, the Registrar will not be required to register the transfer or exchange of any 2004 Senior Convertible Notes: (i) during a period of 15 days before any selection of Senior Convertible Notes for redemption; (ii) if the 2004 Senior Convertible Notes have been called for redemption in whole or in part, except the unredeemed portion of any 2004 Senior Convertible Notes being redeemed in part; or (iii) in respect of which a Fundamental Change Purchase Notice or Repurchase Notice has been given and not withdrawn, except the portion of the 2004 Senior Convertible Note not purchased of any 2004 Senior Convertible Note being purchased in part.
	(iii) Restrictions on Transfer of a Definitive Security for a Beneficial Interest in a Global Security. A Definitive Security may not be exchanged for a beneficial interest in a Global Security except upon satisfaction of the requirements set forth below. Upon receipt by the Trustee of a Definitive Security, duly endorsed or accompanied by a written instrument of transfer in form reasonably satisfactory to the Company and the Registrar, together with written instructions directing the Trustee to make, or to direct the securities custodian to make, an adjustment on its books and records with respect to such Global Security to reflect an increase in the aggregate principal amount of the securities represented by the Global Security, such instructions to contain information regarding the Depositary account to be credited with such increase, then the Trustee shall cancel such Definitive Security and cause, or direct the securities custodian to cause, in accordance with the standing instructions and procedures existing between the Depositary and the securities custodian, the aggregate principal amount of securities represented by the Global Security to be increased by the aggregate principal amount of the Definitive Security to be exchanged and shall credit or cause to be credited to the account of the Person specified in such instructions a beneficial interest in the Global Security equal to the principal amount of the Definitive Security so canceled. If no Global Securities are then outstanding and the Global Security has not been previously exchanged for certificated securities pursuant to Section 1.05(b), the Company shall issue and the Trustee shall authenticate, upon written order of the Company in the form of an Officers' Certificate, a new Global Security in the appropriate principal amount.
	(b) Transfer and Exchange of Global Securities.
	(i) The transfer and exchange of Global Securities or beneficial interests therein shall be effected through the Depositary, in accordance with this Supplemental Indenture (including applicable restrictions on transfer set forth herein, if any) and the procedures of the Depositary therefor. A transferor of a beneficial interest in a Global Security shall deliver a written order given in accordance with the Depositary's procedures containing information regarding the participant account of the Depositary to be credited with a beneficial interest in such Global Security or another Global Security and such account shall be credited in accordance with such order with a beneficial interest in the applicable Global Security and the account of the Person making the transfer shall be debited by an amount equal to the beneficial interest in the Global Security being transferred.
	(ii) If the proposed transfer is a transfer of a beneficial interest in one Global Security to a beneficial interest in another Global Security, the Registrar shall reflect on its books and records the date and an increase in the principal amount of the Global Security to which such interest is being transferred in an amount equal to the principal amount of the interest to be so transferred, and the Registrar shall reflect on its books and records the date and a corresponding decrease in the principal amount of Global Security from which such interest is being transferred.
	(iii) Notwithstanding any other provisions of this Sixth Supplemental Indenture (other than the provisions set forth in Section 1.05), a Global Security may not be transferred as a whole except by the Depositary to a nominee of the Depositary or by a nominee of the Depositary to the Depositary or another nominee of the Depositary or by the Depositary or any such nominee to a successor Depositary or a nominee of such successor Depositary.

ARTICLE 2

MISCELLANEOUS PROVISIONS

     SECTION 2.01 Recitals by the Company. The recitals in this Sixth Supplemental Indenture are made by the Company only and not by the Trustee, and all of the provisions contained in the Original Indenture in respect of the rights, privileges, immunities, powers and duties of the Trustee shall be applicable in respect of the 2004 Senior Convertible Notes and of this Sixth Supplemental Indenture as fully and with like effect as if set forth herein in full.

     SECTION 2.02 Ratification and Incorporation of Original Indenture. As supplemented hereby, the Original Indenture is in all respects ratified and confirmed, and the Original Indenture and this Sixth Supplemental Indenture shall be read, taken and construed as one and the same instrument.

     SECTION 2.03 Executed in Counterparts. This Sixth Supplemental Indenture may be executed in several counterparts, each of which shall be deemed to be an original, and such counterparts shall together constitute but one and the same instrument.

     SECTION 2.04 Governing Law. THIS SUPPLEMENTAL INDENTURE AND THE 2004 SENIOR CONVERTIBLE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CHOICE OF LAW PRINCIPLES THEREOF.

     IN WITNESS WHEREOF, each party hereto has caused this instrument to be signed in its name and behalf by its duly authorized officers, all as of the day and year first above written.

	BAUSCH & LOMB INCORPORATED By:  /s/ Efrain Rivera      Name: Efrain Rivera Title: Vice President and Treasurer
Attest: /s/ Jean F. Geisel      Name: Jean F. Geisel Title: Secretary
	CITIBANK, N.A., as Trustee By:  /s/ John J. Byrnes   Name: John J. Byrnes Title: Vice President
Attest:  /s/ Wafaa Orey      Name: Wafaa Orey Title: Vice President

SIGNATURE PAGE

EXHIBIT A

FORM OF
2004 FLOATING RATE SENIOR CONVERTIBLE NOTE DUE 2023

FOR PURPOSES OF SECTIONS 1272,1273 AND 1275 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, THIS SECURITY IS A CONTINGENT PAYMENT DEBT INSTRUMENT AND WILL ACCRUE ORIGINAL ISSUE DISCOUNT AT THE ISSUER'S "COMPARABLE YIELD" FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. PURSUANT TO SECTION 1.15 OF THE INDENTURE, THE COMPANY AGREES, AND BY PURCHASING A BENEFICIAL OWNERSHIP INTEREST IN THE 2004 SENIOR CONVERTIBLE NOTES EACH HOLDER, AND ANY PERSON (INCLUDING AN ENTITY) THAT ACQUIRES A DIRECT OR INDIRECT BENEFICIAL INTEREST IN THE 2004 SENIOR CONVERTIBLE NOTES, WILL BE DEEMED TO HAVE AGREED (I) FOR UNITED STATES FEDERAL INCOME TAX PURPOSES TO TREAT THE 2004 SENIOR CONVERTIBLE NOTES AS INDEBTEDNESS OF THE COMPANY THAT IS SUBJECT TO TREAS. REG. SEC. 1.1275-4 (THE "CONTINGENT PAYMENT REGULATIONS"), (II) FOR ALL TAX PURPOSES TO TREAT THE 2004 SENIOR CONVERTIBLE NOTES AS INDEBTEDNESS OF THE COMPANY, (III) FOR PURPOSES OF THE CONTINGENT PAYMENT REGULATIONS, TO TREAT THE CASH AND THE FAIR MARKET V ALUE OF ANY COMMON STOCK BENEFICIALLY RECEIVED BY A BENEFICIAL HOLDER UPON ANY CONVERSION OF THE 2004 SENIOR CONVERTIBLE NOTES AS A CONTINGENT PAYMENT, AND (IV) TO BE BOUND BY THE COMPANY'S PROJECTED PAYMENT SCHEDULE WITH RESPECT TO THE 2004 SENIOR CONVERTIBLE NOTES. THE PROVISIONS OF THIS INDENTURE SHALL BE INTERPRETED TO FURTHER THIS INTENTION AND AGREEMENT OF THE PARTIES. THE COMPARABLE YIELD AND THE SCHEDULE OF PROJECTED PAYMENTS ARE NOT DETERMINED FOR ANY PURPOSE OTHER THAN FOR THE DETERMINATION OF INTEREST ACCRUALS AND ADJUSTMENT THEREOF IN RESPECT OF THE 2004 SENIOR CONVERTIBLE NOTES FOR UNITED STATES FEDERAL INCOME TAX PURPOSES. THE COMPARABLE YIELD AND THE SCHEDULE OF PROJECTED PAYMENTS DO NOT CONSTITUTE A PROJECTION OR REPRESENTATION REGARDING THE FUTURE STOCK PRICE OR THE AMOUNTS PAYABLE ON THE 2004 SENIOR CONVERTIBLE NOTES. FOR PURPOSES OF THE FOREGOING, THE COMPANY'S DETERMINATION OF THE "COMPARABLE YIELD" IS 8.28% PER ANNUM, COMPOUNDED SEMIANNUALLY. A HOLDER OF 2004 SENIOR CONVERTIBLE NOTES MAY OBTAIN THE YIELD TO MATURITY, ISSUE DATE, COMPARABLE YIELD AND PROJECTED PAYMENT SCHEDULE (WHICH SCHEDULE IS ATTACHED AS EXHIBIT C TO THE INDENTURE) BY SUBMITTING A WRITTEN REQUEST TO: BAUSCH & LOMB INCORPORATED, ONE BAUSCH & LOMB PLACE, ROCHESTER, NEW YORK 14604, ATTENTION: CHIEF FINANCIAL OFFICER.

     THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE TRANSFERRED TO, OR REGISTERED OR EXCHANGED FOR SECURITIES REGISTERED IN THE NAME OF, ANY PERSON OTHER THAN THE DEPOSITARY OR A NOMINEE THEREOF AND NO SUCH TRANSFER MAY BE REGISTERED, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE. EVERY SECURITY AUTHENTICATED AND DELIVERED UPON REGISTRATION OR TRANSFER OF, OR IN EXCHANGE FOR OR IN LIEU OF, THIS SECURITY SHALL BE A GLOBAL SECURITY SUBJECT TO THE FOREGOING, EXCEPT IN SUCH LIMITED CIRCUMSTANCES.

     UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), 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 DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), 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.

BAUSCH & LOMB INCORPORATED
2004 Floating Rate Senior Convertible Note due 2023

No. 1 Issue Date: December ___, 2004	CUSIP:                         Original Principal Amount: $
BAUSCH & LOMB INCORPORATED, a New York corporation (the "Company"), promises to pay to CEDE & CO. or registered assigns, on August 1, 2023, the Accreted Principal Amount of this 2004 Senior Convertible Note on such date. This 2004 Senior Convertible Note is issued with an Original Principal Amount of _______________________DOLLARS ($_________).      This 2004 Senior Convertible Note shall not bear interest except as specified on the reverse side of this 2004 Senior Convertible Note. The Accreted Principal Amount of this 2004 Senior Convertible Note will accrue as specified on the reverse of this 2004 Senior Convertible Note. This 2004 Senior Convertible Note may be called for redemption at the option of the Company as specified on the reverse of this 2004 Senior Convertible Note. This 2004 Senior Convertible Note may be subject to repurchase by the Company at the option of the Holder as specified on the reverse of this 2004 Senior Convertible Note. This 2004 Senior Convertible Note is convertible as specified on the reverse of this 2004 Senior Convertible Note.      Additional provisions of this 2004 Senior Convertible Note are set forth on the reverse of this 2004 Senior Convertible Note.      IN WITNESS WHEREOF, the Company has caused this 2004 Senior Convertible Note to be duly executed. Dated:
	BAUSCH & LOMB INCORPORATED By:                                                                Name: Title
TRUSTEE'S CERTIFICATE OF AUTHENTICATION CITIBANK, N.A. as Trustee, certifies that this is one of the 2004 Senior Convertibles Notes referred to in the within-mentioned Indenture.
By:                                         Authorized Officer Dated:

(Reverse of Security)

BAUSCH & LOMB INCORPORATED

2004 SENIOR CONVERTIBLE NOTE DUE 2023

1.	Interest and Contingent Interest.
	(a) The 2004 Senior Convertible Notes will bear cash interest on the Original Principal Amount at the annual rate of Six Month LIBOR plus 0.50%, reset semi-annually on each Interest Payment Date (such day being an "Interest Reset Date"); provided that such rate will never be less than 0%, from August 1, 2004, or from the most recent date to which interest has been paid or provided for, until August 1, 2010. During such period, the Company will pay cash interest semi-annually in arrears on each Interest Payment Date to Holders of record at the close of business on each Regular Record Date immediately preceding such Interest Payment Date. The interest rate in effect for the 2004 Senior Convertible Notes on any day will be: (a) if that day is an Interest Reset Date, the interest determined as of the Determination Date immediately preceding such Interest Reset Date, or (b) if that day is not an Interest Reset Date, the interest rate determined as of the Determination Date immediately preceding the most recent Interest Reset Date. Each payment of cash interest on the 2004 Senior Convertible Notes will include interest (including Contingent Interest, if any) accrued through the day immediately preceding the most recent Interest Payment Date (or the Repurchase Date, Redemption Date, Fundamental Change Date or, in certain circumstances, the Conversion Date, as the case may be). Any payment required to be made on any day that is not a Business Day will be made on the next succeeding Business Day.
	LIBOR will be determined by the Calculation Agent as of the applicable determination date in accordance with the following provisions ("Six-Month LIBOR"):
	(i) the rate for six-month deposits in US dollars commencing on the related Interest Reset Date, that appears on the Moneyline Telerate Page 3750 as of 11:00 A.M., London time, on the interest Determination Date; or
	(ii) if no rate appears on the particular interest Determination Date on the Moneyline Telerate Page 3750, the rate calculated by the Calculation Agent as the arithmetic mean of at least two offered quotations obtained by the Calculation Agent after requesting the principal London offices of each of four major reference banks in the London interbank market to provide the Calculation Agent with its offered quotation for deposits in US dollars for the period of six months, commencing on the related Interest Reset Date, to prime banks in the London interbank market at approximately 11:00 A.M., London time, on that interest Determination Date and in a principal amount that is representative for a single transaction in US dollars in that market at that time; or
	(iii) if fewer than two offered quotations referred to in clause (ii) are provided as requested, the rate calculated by the Calculation Agent as the arithmetic mean of the rates quoted at approximately 11:00 A.M., New York time, on the particular interest Determination Date by three major banks in The City of New York selected by the Calculation Agent for loans in US dollars to leading European banks for a period of six months and in a principal amount that is representative for a single transaction in US dollars in that market at that time; or
	(iv) if the banks so selected by the Calculation Agent are not quoting as mentioned in clause (iii), six-month LIBOR determined on the preceding interest Determination Date.
	"Moneyline Telerate Page 3750" means the display on Moneyline Telerate (or any successor service) on such page (or any other page as may replace such page on such service) for the purpose of displaying the London interbank rates of major banks for US dollars.
	If the Stated Maturity date of the 2004 Senior Convertible Notes falls on a day that is not a LIBOR Business Day, the related payment of principal and interest will be made on the next LIBOR Business Day as if it were made on the date such payment was due, and no interest will accrue on the amounts so payable for the period from and after such Stated Maturity date to the next LIBOR Business Day. If any Interest Reset Date or Interest Payment Date (other than at the date of Stated Maturity) would otherwise be a day that is not a LIBOR Business Day, that Interest Reset Date and Interest Payment Date will be postponed to the next date that is a LIBOR Business Day, except that if such LIBOR Business Day is in the next calendar month, such Interest Reset Date and Interest Payment Date (other than at the date of Stated Maturity) shall be the immediately preceding LIBOR Business Day.
	(b) Until August 1, 2010, the Accreted Principal Amount of a 2004 Senior Convertible Note will be equal to the Original Principal Amount of $1,000. Beginning August 1, 2010, the 2004 Senior Convertible Note shall not bear interest, except as specified in this paragraph of the Indenture. From such date, the Original Principal Amount shall commence increasing daily by the annual rate of Six Month LIBOR plus 0.50% reset on each Interest Reset Date; provided that such rate will never be less than 0%, to produce the Accreted Principal Amount. The Accreted Principal Amount will compound semi-annually, not daily. On the Stated Maturity, the Holder of this 2004 Senior Convertible Note will receive the fully Accreted Principal Amount of this 2004 Senior Convertible Note on such date, unless the 2004 Senior Convertible Note has been earlier redeemed, repurchased or converted. Unless cash interest is payable as provided in paragraph 1(a) or 9 hereof, the accrued y ield shall be added to the Accreted Principal Amount per Senior Convertible Note as of the day preceding the most recent Yield Reset Date. The yield will be calculated using the actual number of days elapsed between the Yield Reset Dates divided by 360.
	(c) If the Accreted Principal Amount hereof or any portion of such Accreted Principal Amount is not paid when due (whether upon acceleration pursuant to Section 502 of the Indenture, upon the date set for payment of the Redemption Price pursuant to paragraph 5 hereof, upon the date set for payment of the Purchase Price or Fundamental Change Purchase Price pursuant to paragraph 6 hereof or upon the Stated Maturity of this 2004 Senior Convertible Note) or if installments of cash interest due hereon are not paid when due in accordance with this paragraph, then in each such case the overdue amount shall, to the extent permitted by law, bear interest at Six Month LIBOR plus 0.50% reset on each Interest Reset Date (provided that such rate will never be less than 0%) as such rate is in effect following the date such overdue amount was due, compounded quarterly, which interest shall accrue from the date such overdue amount was originally due to the date payment of such amount, including interest thereon, has been made or duly provided for. All such interest shall be payable on demand. The accrual of such interest on overdue amounts shall be in lieu of, and not in addition to, any subsequent increase in the Accreted Principal Amount.
	(d) The Company will pay Contingent Interest to the Holders of the 2004 Senior Convertible Notes in respect of any six-month interest period from February 1 to July 31 and August 1 to January 31, commencing on or after August 1, 2010 for which the average Trading Price of a 2004 Senior Convertible Note for the applicable five Trading Day reference period equals or exceeds 120% of the sum of the Accreted Principal Amount and accrued interest, if any, for a 2004 Senior Convertible Note as of the day immediately preceding the first day of the applicable six-month interest period. The "five Trading Day reference period" means the five Trading Days ending on the third Trading Day immediately preceding the relevant six-month interest period. For any six-month interest period in respect of which Contingent Interest is payable, the Contingent Interest payable on each $1,000 principal amount of Notes shall be equal to 0.30% of the average Trading Price of a 2004 Senior Convertible Note for the applicable five Trading Day reference period. No Contingent Interest shall be payable on Senior Convertible Notes redeemed pursuant to this paragraph 6 on August 1, 2010 (or, if August 1, 2010 is not a Business Day, on the next following Business Day).
	Upon determination that Holders will be entitled to receive Contingent Interest in respect of a six-month interest period, the Company shall notify the Holders. In connection with providing such notice, the Company will issue a press release containing information regarding the Contingent Interest determination or publish such information on the Company's then existing website or through such other public medium as the Company may use at that time.
	(e) Interest, including Contingent Interest, if any, on any 2004 Senior Convertible Note that is payable, and is punctually paid or duly provided for, on any Interest Payment Date shall be paid to the person in whose name that Senior Convertible Note is registered at the close of business on the Regular Record Date for such interest or Contingent Interest, if any, at the office or agency of the Company maintained for such purpose. Each installment of interest or Contingent Interest, if any, on any 2004 Senior Convertible Note shall be paid in same-day funds by transfer to an account maintained by the payee located inside the United States.
	(f) The amount of interest, including Contingent Interest, if any, payable for any partial period shall be computed on the basis of a 360-day year of twelve 30-day months and the actual number of days elapsed in any partial month. In the event that any Interest Payment Date on a 2004 Senior Convertible Note is not a Business Day, then a payment of the interest, including Contingent Interest, if any, payable on such date will be made on the next succeeding day which is a Business Day (and without any interest or other payment in respect of any such delay) with the same force and effect as if made on the date the payment was originally payable.
2.	Method of Payment.
	Subject to the terms and conditions of the Indenture, the Company will make payments in respect of Accreted Principal Amount, Principal Return, Redemption Prices, Purchase Prices, Fundamental Change Purchase Prices and on Stated Maturity to Holders who surrender Senior Convertible Notes to a Paying Agent to collect such payments in respect of the 2004 Senior Convertible Notes. In addition, the Company will pay cash interest beginning November 1, 2003 until August 1, 2010, as more fully described in paragraph 1 hereof. The Company will pay any cash amounts in money of the United States that at the time of payment is legal tender for payment of public and private debts. However, the Company may make such cash payments by check payable in such money.
3.	Paying Agent, Conversion Agent and Registrar.
	Initially, Citibank, N.A. (the "Trustee") will act as Paying Agent, Conversion Agent and Registrar. The Company may appoint and change any Paying Agent, Conversion Agent and Registrar or co-registrar without notice, other than notice to the Trustee except that the Company will maintain at least one Paying Agent in the State of New York, The City of New York, Borough of Manhattan, which shall initially be an office or agency of the Trustee. The Company or any of its Subsidiaries or any of their Affiliates may act as Paying Agent, Conversion Agent, Registrar or co-registrar.
4.	Indenture.
	The Company issued the 2004 Senior Convertible Notes pursuant to an Indenture dated as of September 1, 1991, as subsequently supplemented including by the Sixth Supplemental Indenture thereto dated December __, 2004 (the "Indenture"), between the Company and the Trustee. The terms of the 2004 Senior Convertible Notes include those stated in the Indenture and those made part of the Indenture by reference to the 2004 Senior Convertible Notes themselves and the Trust Indenture Act of 1939, as in effect from time to time (the "TIA"). Capitalized terms used herein and not defined herein have the meanings ascribed thereto in the Indenture. The 2004 Senior Convertible Notes are subject to all such terms, and 2004 Senior Convertible Note Holders are referred to the Indenture and the TIA for a statement of those terms. In the event of any inconsistency between the terms hereof and the terms of the Indenture, the terms of the Indenture shall prevail.
	The 2004 Senior Convertible Notes are unsecured and unsubordinated obligations of the Company limited to $160,000,000 aggregate Original Principal Amount but not more than the original principal amount of all of the Company's Floating Rate Senior Convertible Notes due 2023 surrendered in exchange for the 2004 Senior Convertible Notes. The Indenture does not limit other indebtedness of the Company, secured or unsecured.
5.	Redemption at the Option of the Company.
	No sinking fund is provided for the 2004 Senior Convertible Notes. The 2004 Senior Convertible Notes are redeemable in cash as a whole, or from time to time in part, at any time at the option of the Company in accordance with the Indenture at 100% of the Accreted Principal Amount of the 2004 Senior Convertible Notes, plus any accrued and unpaid interest to the Redemption Date, provided that the 2004 Senior Convertible Notes are not redeemable prior to August 1, 2010.
	If less than all of the outstanding 2004 Senior Convertible Notes are to be redeemed, the Trustee will select the 2004 Senior Convertible Notes to be redeemed in Original Principal Amounts of $1,000 or integral multiples of $1,000 Original Principal Amount. In this case, the Trustee may select the 2004 Senior Convertible Notes by lot, pro rata or by any other method the Trustee considers fair and appropriate. If a portion of a Holder's Senior Convertible Notes is selected for partial redemption and the Holder converts a portion of the 2004 Senior Convertible Notes, the converted portion will be deemed to be the portion selected for redemption.
	If this 2004 Senior Convertible Note has been converted to a semi-annual cash interest paying note following the occurrence of a Tax Event, the Redemption Price will be equal to the Restated Principal Amount plus accrued and unpaid interest (including Contingent Interest, if any) from the date of such conversion to but not including the Redemption Date; but in no event will this 2004 Senior Convertible Note be redeemable before August 1, 2010.
	No Contingent Interest shall be payable on 2004 Senior Convertible Notes redeemed pursuant to this paragraph 5 on August 1, 2010 (or if August 1, 2010 is not a Business Day, on the following Business Day).
6.	Purchase by the Company at the Option of the Holder.
	Subject to the terms and conditions of the Indenture, the Company shall become obligated to purchase, at the option of the Holder, the 2004 Senior Convertible Notes held by such Holder on August 1 of 2010, 2013 and 2018 at a Purchase Price in cash equal to 100% of the Accreted Principal Amount of such 2004 Senior Convertible Notes on the applicable Repurchase Date plus accrued and unpaid interest, including Contingent Interest, if any, to but not including the Repurchase Date, upon delivery of a Repurchase Notice containing the information set forth in the Indenture, at any time from the opening of business on the date that is 20 Business Days prior to such Repurchase Date until the close of business on the third Business Day prior to such Repurchase Date and upon delivery of the 2004 Senior Convertible Notes to the Paying Agent by the Holder as set forth in the Indenture.
	If prior to a Repurchase Date this 2004 Senior Convertible Note has been converted to a semi-annual cash interest paying note following the occurrence of a Tax Event, the Purchase Price will be equal to the Restated Principal Amount plus accrued and unpaid cash interest, including Contingent Interest, if any, from the date of conversion to the Repurchase Date but not including the Repurchase Date as provided in the Indenture.
	At the option of the Holder and subject to the terms and conditions of the Indenture, the Company shall become obligated to purchase in cash all or a portion of the 2004 Senior Convertible Notes in integral multiples of $1,000 Original Principal Amount held by such Holder no later than 60 Business Days after the occurrence of a Fundamental Change of the Company for a Fundamental Change Purchase Price equal to 100% of the Accreted Principal Amount of such 2004 Senior Convertible Notes plus accrued and unpaid interest, including Contingent Interest, if any, to but not including the Fundamental Change Purchase Price Date, which Fundamental Change Purchase Price shall be paid in cash.
	Holders have the right to withdraw any Repurchase Notice or Fundamental Change Purchase Notice, as the case may be, by delivering to the Paying Agent a written notice of withdrawal in accordance with the provisions of the Indenture.
	Payment of the Purchase Price for a 2004 Senior Convertible Note for which a Repurchase Notice has been delivered and not withdrawn is conditioned upon book-entry transfer or delivery of such 2004 Senior Convertible Note, together with any necessary endorsements, to the Paying Agent at its office in the Borough of Manhattan, The City of New York, or any other office or the Paying Agent, at any time after delivery of the Repurchase Notice.
	If cash sufficient to pay the Purchase Price or Fundamental Change Purchase Price, as the case may be, of all 2004 Senior Convertible Notes or portions thereof to be purchased as of the Repurchase Date or the Fundamental Change Purchase Price Date, as the case may be, is deposited with the Paying Agent on the Business Day immediately following to the Repurchase Date or on the Fundamental Change Purchase Price Date, as the case may be, such 2004 Senior Convertible Notes (or portions thereof) will cease to be outstanding, the Accreted Principal Amount shall cease to increase, and cash interest, including Contingent Interest, if any, shall cease to accrue on such 2004 Senior Convertible Notes (or portions thereof) on such Repurchase Date or Fundamental Change Purchase Price Date, as the case may be, and the Holder thereof shall have no other rights as such (other than the right to receive the Purchase Price or Fundamental Change Purchase Price, as the case may be, if any, upon s urrender of such 2004 Senior Convertible Notes). This will be the case whether or not book-entry transfer of the 2004 Senior Convertible Note has been made or the 2004 Senior Convertible Note has been delivered to the Paying Agent.
7.	Conversion.
	Conversion Based on Common Stock Price. Subject to the provisions of this paragraph 7 including the settlement provisions described below and notwithstanding the fact that any other condition to conversion described below has not been satisfied, Holders may convert the 2004 Senior Convertible Notes on a Conversion Date at any time starting with the first day of any calendar quarter commencing after December 31, 2004 if the Closing Sale Price of the Common Stock for at least 20 Trading Days in a period of 30 consecutive Trading Days ending on the last Trading Day of such preceding calendar quarter is greater than the conversion trigger price per share. The "conversion trigger price" for any calendar quarter shall be 120% of the accreted Conversion Price per share (as defined below) of Common Stock on the last Trading Day of such preceding calendar quarter. If the foregoing condition is satisfied, then the 2004 Senior Convertible Notes will be convertible at an y time of the option of the Holder, through their maturity.
	The "accreted Conversion Price" per share of Common Stock as of any day equals the quotient of:
	- the Accreted Principal Amount on that day, divided by
	- the Conversion Rate on that day, subject to any adjustments to the Conversion Rate through that day.
	Beginning August 1, 2010, the accreted principal amount of a 2004 Senior Convertible Note will be equal to the Original Principal Amount of $ 1,000 increased daily by the annual rate of Six Month LIBOR plus 0.50%, reset on each Interest Reset Date.
	Conversion Based on Trading Price of 2004 Senior Convertible Notes. Subject to the provisions of this paragraph 7 including the settlement provisions described below and notwithstanding the fact that any other condition to conversion described below has not been satisfied, Holders may convert the 2004 Senior Convertible Notes, prior to August 1, 2020, during each of the five Business Day periods after any ten consecutive Trading Day period in which the Trading Price per $1,000 Original Principal Amount of the 2004 Senior Convertible Notes was less than 97% of the product of (i) the average of Closing Sale Prices over the same ten day Trading Day period, and (ii) the applicable Conversion Rate of the 2004 Senior Convertible Notes. Upon conversion, the Company shall pay the holder of the converted 2004 Senior Convertible Note cash and Common Stock as provided in the Indenture.
	The "Trading Price" means, on any date, the average of the secondary market bid quotations for the 2004 Senior Convertible Notes obtained by the Trustee for $5,000,000 Original Principal Amount of 2004 Senior Convertible Notes at approximately 3:30 p.m., New York City time, on such date from three independent nationally recognized securities dealers selected by the Company; provided that if at least three such bids cannot reasonably be obtained by the Trustee, but two bids are obtained, then the average of the two bids shall be used, and if only one such bid can reasonably be obtained by the Trustee, one bid shall be used; and provided further that if the Trustee cannot reasonably obtain at least one bid for $5,000,000 Original Principal Amount of 2004 Senior Convertible Notes from a nationally recognized securities dealer or in the Company's reasonable judgment, the bid quotations are not indicative of the secondary market value of the 2004 Senior Convertible Notes , then the Trading Price per $1,000 Original Principal Amount of 2004 Senior Convertible Notes shall be deemed to be less than 97% of the product of: (a) the applicable Conversion Rate of the 2004 Senior Convertible Notes, and (b) the Closing Sale Price on such date.
	The Trustee (or other conversion agent appointed by the Company) shall have no obligation to determine the Trading Price unless the Company has requested such a determination; and the Company shall have no obligation to make such request unless a Holder provides it with reasonable evidence that the Trading Price per $1,000 Original Principal Amount of 2004 Senior Convertible Notes would be less than 97% of the product of the average Closing Sale Prices over the same ten Trading Day period and applicable Conversion Rate. If such evidence is provided, the Company shall instruct the Trustee (or other conversion agent) to determine the Trading Price of the 2004 Senior Convertible Notes beginning on the next Trading Day and on each successive Trading Day until the Trading Price per $1,000 Original Principal Amount of 2004 Senior Convertible Notes is greater than 97% of the product of the average Closing Sale Price and the applicable Conversion Rate of the 2004 Senior Convertible Notes.
	Conversion upon Redemption. Subject to the provisions of this paragraph 7 including the settlement provisions described below and notwithstanding the fact that any other condition described herein to conversion has not been satisfied, a Holder may convert a 2004 Senior Convertible Note or portion of a 2004 Senior Convertible Note which has been called for redemption pursuant to paragraph 5 hereof, provided such 2004 Senior Convertible Notes are surrendered for conversion prior to the close of business on the Business Day immediately preceding the Redemption Date.
	Conversion Upon Occurrence of Certain Corporate Transactions. Subject to the provisions of this paragraph 7 including the settlement provisions described below and notwithstanding the fact that any other condition described herein to conversion has not been satisfied, in the event the Company is a party to a consolidation, merger or binding share exchange or a transfer of all or substantially all of the Company's assets pursuant to which the Common Stock would be converted into cash, securities or other property as set forth in the Indenture, the 2004 Senior Convertible Notes may be surrendered for conversion at any time from and after the date which is 15 days prior to the date announced by the Company as the anticipated effective time of such transaction until 15 days after the actual effective date of such transaction, and, unless the transactions is a Cash Take-Over Transaction, as defined in the Indenture, at the effective time of such transaction the right to con vert a 2004 Senior Convertible Note will be deemed to have changed into a right to convert it into the kind and amount of cash, securities or other assets of the Company or another person which the Holder would have received if the Holder had converted its 2004 Senior Convertible Note immediately prior to the transaction. If such transaction is a Cash Take-Over Transaction, the Additional Shares as provided in Section 1.10(g)(vii) shall be added to the number of shares of Common Stock to be delivered upon conversion as provided in Section 1.10(b)(ii) of the Indenture, unless the transaction is with an acquirer which has a class of publicly traded securities and the Company elects to treat the transaction as a Public Acquirer Change of Control under Section 1.10(g)(viii) of the Indenture. If the Company elects to treat the transaction as a Public Acquirer Change of Control, the Company shall cause notice of such election to be mailed to each Holder, at its address appearing on the 2004 Senior Note register, a s soon as practicable and at least 5 trading days prior to the anticipated Effective Date of such transaction and, as of the Effective Date of the Public Acquirer Change of Control, the 2004 Senior Convertible Notes shall be convertible as described in Section 1.10(g)(viii) of the Indenture. If any transaction described in this paragraph also constitutes a Fundamental Change, a Holder will be able to require the Company to purchase all or a portion of such Holder's 2004 Senior Convertible Notes pursuant to Paragraph 6 and of the Indenture.
	Conversion Upon Other Events. Subject to the provisions of this paragraph 7 including the settlement provisions described below and notwithstanding the fact that any other condition to conversion has not been satisfied, in the event that the Company declares a dividend or distribution described in Section 1.10(g)(ii) of the Indenture, or a dividend or a distribution described in Section 1.10(g)(iv) of the Indenture where, the fair market value, per share, of such dividend or distribution per share of Common Stock, as determined in the Indenture, exceeds 10% of the Closing Sale Price of the Common Stock on the Business Day immediately preceding the date of declaration for such dividend or distribution or a Fundamental Change occurs other than pursuant to a transaction described in clause entitled "Conversion Upon Occurrence of Certain Corporate Transactions" above, the 2004 Senior Convertible Notes may be surrendered for conversion beginning on the date the Co mpany gives notice to the Holders of such right, which shall not be less than 20 days prior to the Ex-Dividend Date for such dividend or distribution or which shall be within 20 days after the occurrence of such Fundamental Change, as the case may be, and Senior Convertible Notes may be surrendered for conversion at any time thereafter until the earlier of the close of business on the Business Day prior to the Ex-Dividend Date or until the Company announces that such dividend or distribution will not take place, with respect to a dividend or distribution, or within 30 days of such Fundamental Change Purchase Notice, in the case of such a Fundamental Change. No adjustment to the Conversion Rate or the ability of the Holders to convert this 2004 Senior Convertible Note will be made if the Company provides, as permitted in the Indenture, for Holders to participate in the transaction without conversion or in other cases specified in the Indenture.
	A 2004 Senior Convertible Note in respect of which a Holder has delivered a Repurchase Notice or Fundamental Change Purchase Notice exercising the option of such Holder to require the Company to purchase such 2004 Senior Convertible Note may be converted only if such notice of exercise is withdrawn in accordance with the terms of the Indenture.
	Conversion Generally. The initial Conversion Rate is 16.2760 shares of Common Stock per $1,000 Original Principal Amount of each 2004 Senior Convertible Note, subject to adjustment for certain events described in the Indenture. The Company will pay to the holder of any converted 2004 Senior Convertible Note cash and, if the aggregate Conversion Value of the 2004 Senior Convertible Note to be converted exceeds the aggregate Accreted Principal Amount, shares of Common Stock as follows: (i) an amount in cash (the "Principal Return") equal to the lesser of (A) the aggregate Conversion Value of the 2004 Senior Convertible Notes to be converted, and (B) the aggregate Accreted Principal Amount of the 2004 Senior Convertible Notes to be converted; (ii) if the aggregate Conversion Value of the 2004 Senior Convertible Notes to be converted is greater than the Accreted Principal Amount, the number of whole shares of Common Stock equal to the sum of the Daily Share Amoun ts (as defined in the Indenture) for each Trading Day during the applicable Conversion Settlement Reference Period; and (iii) an amount in cash in lieu of any fractional shares which would otherwise be payable as a result of the calculation in subsection (ii) above, calculated as provided in the Indenture. The ability to surrender Senior Convertible Notes for conversion will expire at the close of business on July 31, 2023.
	In the event the Company exercises its option pursuant to Section 1.03(h) of the Indenture to have, in lieu of having the Accreted Principal Amount increase, interest accrue on the 2004 Senior Convertible Note following a Tax Event, the Holder will be entitled on conversion to receive the same number of shares of Common Stock such Holder would have received if the Company had not exercised such option.
	Increases in the Accreted Principal Amount and cash interest (including Contingent Interest, if any, and interest payable upon the occurrence of a Tax Event, if any) will not be paid on 2004 Senior Convertible Notes that are converted, except accrued cash interest will be payable upon conversion of Senior Convertible Notes made concurrently with or after acceleration of 2004 Senior Convertible Notes following an Event of Default. Any 2004 Senior Convertible Notes surrendered for conversion during the period from the close of business on any Regular Record Date next preceding any Interest Payment Date to the opening of business on such Interest Payment Date shall be entitled to receive such interest payable on such 2004 Senior Convertible Notes on the corresponding Interest Payment Date and, except Senior Convertible Notes to be redeemed within this period, 2004 Senior Convertible Notes surrendered for conversion during such periods must be accompanied by payment of an amount equal to the interest, including Contingent Interest, with respect thereto that the registered Holder is to receive.
	To exercise its conversion right, a Holder must (1) complete and manually sign the conversion notice (or complete and manually sign a facsimile of such notice) and deliver such notice to the Conversion Agent, (2) surrender the 2004 Senior Convertible Note to the Conversion Agent, (3) furnish appropriate endorsements and transfer documents if required by the Conversion Agent, the Company or the Trustee and (4) pay any transfer or similar taxes, if required.
	A Holder may convert a portion of a 2004 Senior Convertible Note if the Original Principal Amount of such portion is $1,000 or an integral multiple of $1,000. No payment or adjustment will be made for dividends on the Common Stock except as provided in the Indenture. On conversion of a 2004 Senior Convertible Note, increases in the Accreted Principal Amount or cash interest (or interest if the Company has exercised its option provided for in paragraph 9 hereof) attributable to the period from the Issue Date (or, if the Company has exercised the option referred to in paragraph 9 hereof, the later of (x) the date of such exercise and (y) the date on which interest was last paid) through the Conversion Date shall not be cancelled, extinguished or forfeited, but rather shall be deemed to be paid in full to the Holder thereof through the delivery of the cash and Common Stock, if any, as provided above in exchange for the 2004 Senior Convertible Note being converted pursuant to the terms hereof, and the Principal Return and the fair market value of any shares of Common Stock issued, together with any such cash payment in lieu of fractional shares, shall be treated as paid and issued, to the extent thereof, first in exchange for increases in the Accreted Principal Amount or cash interest (or interest, if the Company has exercised its option provided for in paragraph 9 hereof) accrued through the Conversion Date, and the balance, if any, shall be treated as issued in exchange for the Issue Price of the 2004 Senior Convertible Note being converted pursuant to the provisions hereof.
	The Conversion Rate will be adjusted for dividends or distributions on Common Stock payable in Common Stock or other Capital Stock of the Company; subdivisions, combinations or certain reclassifications of Common Stock; distributions to all Holders of Common Stock of certain rights to purchase Common Stock for a period expiring within 60 days of the record date for such distribution at less than the current market price of the Common Stock at the time of the announcement of the distribution, distributions to such Holders of assets or debt securities of the Company or certain rights to purchase securities of the Company (including cash dividends or distributions) and payments in respect of a tender offer or exchange offer for Common Stock by the Company or by a person other than the Company or one of its subsidiaries to the extent that the cash and value of any other consideration included in the payment per share of Common Stock exceed the current market price per share of Co mmon Stock on the Trading Day next succeeding the last date on which tenders or exchanges may be made pursuant to such tender or exchange offer, as provided in the Indenture. However, no adjustment need be made if 2004 Senior Convertible Note Holders may participate in the transaction or in certain other cases. The Company from time to time may voluntarily increase the Conversion Rate.
	If the Company is a party to a consolidation, merger or binding share exchange or a transfer of all or substantially all of its assets, or upon certain distributions described in the Indenture, the right to convert a 2004 Senior Convertible Note into Common Stock may be changed into a right to convert it into securities, cash or other assets of the Company or another person.
	The Conversion Rate will not be adjusted for increases in the Accreted Principal Amount or accrued cash interest, and Contingent Interest, if any.
8.	Conversion Arrangement on Call for Redemption.
	Any 2004 Senior Convertible Notes called for redemption, unless surrendered for conversion before the close of business on the Redemption Date, may be deemed to be purchased from the Holders of such 2004 Senior Convertible Notes at an amount not less than the Redemption Price, by one or more investment bankers or other purchasers who may agree with the Company to purchase such 2004 Senior Convertible Notes from the Holders, to convert them into Common Stock of the Company and to make payment for such 2004 Senior Convertible Notes to the Trustee in trust for such Holders.
9.	Tax Event.
	From and after the date (the "Tax Event Date") of the occurrence of a Tax Event after August 1, 2010, the Company shall have the option to elect, by notice to the Trustee, in lieu of having Accreted Principal Amount increase, to have interest accrue and be paid in cash at the annual rate equal to Six Month LIBOR plus 0.50% reset on each Interest Reset Date; provided that such rate shall never be less than 0%, on a Restated Principal Amount per $1,000 Original Principal Amount (the "Restated Principal Amount") equal to the accrued Accreted Principal Amount through the Tax Event Date or the date the Company exercises the option provided for in this paragraph 9, whichever is later (the "Option Exercise Date"). Such interest shall be payable semi-annually on February 1 and August 1 of each year to Holders of record at the close of business on January 15 and July 15 immediately preceding such interest payment date. Interest will accrue from the most r ecent date on which interest has been paid or, if no interest has been paid, from the Option Exercise Date.
	The Trustee shall notify Holders of Senior Convertible Notes within 15 days after the Option Exercise Date that the Company has exercised the option provided for in this paragraph.
10.	Defaulted Interest.
	Except as otherwise specified with respect to the 2004 Senior Convertible Notes, any defaulted interest on any 2004 Senior Convertible Note shall forthwith cease to be payable to the registered Holder thereof on the relevant Regular Record Date or accrual date, as the case may be, by virtue of having been such Holder, and such defaulted interest may be paid by the Company as provided for in the Indenture.
11.	Denominations; Transfer; Exchange.
	The 2004 Senior Convertible Notes are in fully registered form, without coupons, in denominations of $1,000 of Original Principal Amount and integral multiples of $1,000. A Holder may transfer or exchange 2004 Senior Convertible Notes in accordance with the Indenture. The Registrar may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and to pay any taxes and fees required by law or permitted by the Indenture. The Registrar need not transfer or exchange any 2004 Senior Convertible Notes selected for redemption (except, in the case of a 2004 Senior Convertible Note to be redeemed in part, the portion of the 2004 Senior Convertible Note not to be redeemed) or any 2004 Senior Convertible Notes in respect of which a Repurchase Notice or Designated Event notice has been given and not withdrawn (except, in the case of a 2004 Senior Convertible Note to be purchased in part, the portion of the 2004 Senior Convertible Note not to be purch ased) or any 2004 Senior Convertible Notes for a period of 15 days before the mailing of a notice of redemption of Senior Convertible Notes to be redeemed.
12.	Persons Deemed Owners.
	The registered Holder of this 2004 Senior Convertible Note may be treated as the owner of this 2004 Senior Convertible Note for all purposes.
13.	Unclaimed Money or Securities.
	The Trustee and the Paying Agent shall return to the Company, upon written request any money or securities held by them for the payment of any amount with respect to the 2004 Senior Convertible Notes that remains unclaimed for two years, subject to applicable unclaimed property laws. After return to the Company Holders entitled to the money or securities must look to the Company for payment as general creditors unless an applicable abandoned property law designates another person.
14.	Amendment; Waiver.
	Subject to certain exceptions, the Indenture or the 2004 Senior Convertible Notes may be amended or supplemented with the consent of the Holders of at least a majority in principal amount of the then outstanding Senior Convertible Notes, and any existing default may be waived with the consent of the Holders of a majority in aggregate Accreted Principal Amount of the then outstanding Senior Convertible Notes.
	Without the consent of any Holder, the Indenture or the 2004 Senior Convertible Notes may be amended to: (s) cure any ambiguity or correct or supplement any defective or inconsistent provision contained in the Indenture, or make any other changes in the provisions of the Indenture which the Company and the Trustee may deem necessary or desirable provided such amendment does not materially and adversely affect the legal rights under the Indenture of the Holders of 2004 Senior Convertible Notes; (t) provide for uncertificated 2004 Senior Convertible Notes in addition to or in place of certificated 2004 Senior Convertible Notes; (u) provide for the assumption of the Company's obligations to Holders of 2004 Senior Convertible Notes in circumstances required under the Indenture; (v) provide for exchange rights of Holders of 2004 Senior Convertible Notes in certain circumstances; (w) reduce the Conversion Price; (x) evidence and provide for the acceptance of the appointment under t he Indenture of a successor Trustee; (y) make any change that would provide any additional rights or benefits to the Holders of 2004 Senior Convertible Notes or that does not adversely affect the legal rights under the Indenture of any such Holder; or (z) comply with the requirements of the Commission in order to effect or maintain the qualification of the Indenture under the TIA.
	Without the consent of each Holder affected, an amendment or waiver may not (with respect to any 2004 Senior Convertible Notes held by a non-consenting Holder): (a) reduce the percentage of Original Principal Amount of 2004 Senior Convertible Notes whose Holders must consent to an amendment, supplement or waiver; (b) reduce the principal of, or premium on, or change the Stated Maturity of any 2004 Senior Convertible Note or, except as permitted pursuant to clause (s), (v), (y) or (z) of the immediately preceding paragraph, alter the provisions with respect to the redemption or repurchase of the 2004 Senior Convertible Notes; (c) reduce the rate of or change the time for payment of interest, including Contingent Interest, or defaulted interest, on any 2004 Senior Convertible Notes; (d) waive a Default or Event of Default in the payment of principal of or premium, if any, or interest (including Contingent Interest, if any) on the 2004 Senior Convertible Notes (except a rescissi on of acceleration of the 2004 Senior Convertible Notes by the Holders of at least a majority in aggregate Accreted Principal Amount of the 2004 Senior Convertible Notes and a waiver of the payment default that resulted from such acceleration); (e) make the principal of, or premium, if any, or interest (including Contingent Interest, if any) on, any 2004 Senior Convertible Note payable in money other than as provided for in the Indenture and in the 2004 Senior Convertible Notes; (f) make any change in the provisions of the Indenture relating to waivers of past Defaults or the rights of Holders of Senior Convertible Notes to receive payments of principal of, premium, if any, or interest (including Contingent Interest, if any) on the 2004 Senior Convertible Notes; (g) waive a redemption or repurchase payment with respect to any 2004 Senior Convertible Note; (h) except as permitted by the Indenture, increase the Conversion Price or modify the provisions of the Indenture relating to conversion of the 2004 Senior Convertible Notes in a manner adverse to the Holders; (i) make any change to the abilities of Holders of Senior Convertible Notes to enforce their rights under the Indenture or the foregoing provisions of this paragraph 14 or this provision; (j) reduce the Redemption Price, Purchase Price or Fundamental Change Purchase Price of the 2004 Senior Convertible Notes; or (k) make any change that adversely affects the right to convert the 2004 Senior Convertible Notes.
15.	Defaults and Remedies.
	An Event of Default is: (a) default for 30 days or more in payment of any installment of interest (including contingent interest, if any) on the 2004 Senior Convertible Notes; (b) default in payment of the principal of, or premium, if any, on the 2004 Senior Convertible Notes, when due at maturity, upon repurchase, upon acceleration or otherwise; (c) default in the Company's obligation to repurchase Senior Convertible Notes upon the Company's exercise of its repurchase option pursuant to Section 1.06 of the Indenture, upon the occurrence of a Fundamental Change pursuant to Section 1.07 of the Indenture or upon the exercise by a Holder of its option to require the Company to repurchase such Holder's Senior Convertible Notes pursuant to Section 1.08 of the Indenture; (d) default by the Company in its obligation to provide notice of a Fundamental Change.; (e) default in the Company's obligation to convert the 2004 Senior Convertible Notes upon exercise of a Holder's conversion r ights pursuant to Section 1.10 of the Indenture; (f) default by the Company for 60 days or more after notice as provided in the Indenture in the observance or performance of any other covenants in the Indenture; (g) default by the Company under any mortgage, indenture or instrument under which there may be issued, or by which there may be secured or evidenced, any indebtedness of the Company for money borrowed which and shall result in more than $20,000,000 in principal amount of such indebtedness becoming declared due and payable, and such acceleration shall not have been rescinded, annulled or discharged within 30 days after notice is given as specified in the Indenture; or (h) certain events involving bankruptcy, insolvency or reorganization of the Company or any Material Subsidiary.
	If an Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate Accreted Principal Amount of the then outstanding Senior Convertible Notes may declare the unpaid principal of, premium, if any, and accrued and unpaid interest (including Contingent Interest, if any) on all Senior Convertible Notes then outstanding to be due and payable immediately, except that in the case of an Event of Default arising from certain events of bankruptcy, insolvency, or reorganization with respect to the Company or any of its Material Subsidiaries, all outstanding Senior Convertible Notes become due and payable without further action or notice. Holders of Senior Convertible Notes may not enforce the Indenture or the 2004 Senior Convertible Notes except as provided in the Indenture. The Trustee may require an indemnity satisfactory to it before it enforces the Indenture or the 2004 Senior Convertible Notes. Subject to certain limitations, Holders of a maj ority in principal amount of the then outstanding Senior Convertible Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders notice of any continuing default (except a default in payment of principal, premium, if any, or interest (including Contingent Interest, if any) if it determines that withholding notice is in their interests. The Company must furnish annual compliance certificates to the Trustee.
16.	Trustee Dealings with the Company.
	Subject to certain limitations imposed by the TIA, the Trustee under the Indenture, in its individual or any other capacity, may become the owner or pledgee of Senior Convertible Notes and may otherwise deal with and collect obligations owed to it by the Company or its Affiliates and may otherwise deal with the Company or its Affiliates with the same rights it would have if it were not Trustee.
17.	No Recourse Against Others.
	A director, officer, employee, agent, representative, stockholder or equity Holder, as such, of the Company shall not have any liability for any obligations of the Company under the 2004 Senior Convertible Notes or this Indenture or for any claim based on, in respect of or by reason of such obligations or their creation. By accepting a 2004 Senior Convertible Note, each 2004Senior Convertible Note Holder shall waive and release all such liability. The waiver and release shall be part of the consideration for the issue of the 2004 Senior Convertible Notes.
18.	Authentication.
	This 2004 Senior Convertible Note shall not be valid until an authorized signatory of the Trustee manually signs the Trustee's Certificate of Authentication on the other side of this 2004 Senior Convertible Note.
19.	Abbreviations.
	Customary abbreviations may be used in the name of a 2004 Senior Convertible Note Holder or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with right of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors Act).
20.	GOVERNING LAW.
	THIS 2004 SENIOR CONVERTIBLE NOTE AND THE INDENTURE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO THE CHOICE OF LAW PRINCIPLES THEREOF.
	The Company will furnish to any 2004 Senior Convertible Note Holder upon written request and without charge a copy of the Indenture that has in it the text of this 2004 Senior Convertible Note in larger type. Requests may be made to:
		Bausch & Lomb Incorporated One Bausch & Lomb Place Rochester, New York 14604 Attention: Chief Financial Officer
			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
UNIF GIFT MIN ACT-				______ Custodian ______ (Cust)                    (Minor)
				under Uniform Gifts to Minors Act
TEN ENT--				as tenants by the entireties
JT TEN--				as joint tenants with rights of survivorship and not as tenants in common ________________       (State)
Additional abbreviations may also be used though not on the above list.

CERTIFICATE TO BE DELIVERED UPON EXCHANGE
OR REGISTRATION OF TRANSFER OF SECURITIES

This Certificate relates to $_____________ principal amount of securities held in (check applicable space) ___ book-entry or ___ definitive form by _________________________ (the "Transferor").
The Transferor (check one box below):
	[   ]		has requested the Trustee by written order to deliver, in exchange for its beneficial interest in the Global Security held by the Depositary, a security or securities in definitive, registered form of authorized denominations in an aggregate principal amount equal to its beneficial interest in such Global Security (or the portion thereof indicated above); or
	[   ]		has requested the Trustee by written order to exchange or register the transfer of a security or securities.
				[INSERT NAME OF TRANSFEROR]
Dated:
		By:

SIGNATURE GUARANTEE

     Signatures must be guaranteed by an "eligible guarantor institution" meeting the requirements of the Security Registrar, which requirements include membership or participation in the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee program" as may be determined by the Security Registrar in addition to, or in substitution for, STAMP, all in accordance with the Securities Exchange Act of 1934, as amended.

[TO BE ATTACHED TO GLOBAL SECURITIES]

SCHEDULE OF INCREASE OR DECREASES IN GLOBAL SECURITY

The following increases or decreases in Principal Amount represented by this Global Security have been made:

Date	Amount of decrease in Principal Amount of   this Global Security	Amount of increase in Principal Amount of   this Global Security	Principal Amount of this Global Security following such decrease           or increase	Signature of authorized signatory of Trustee or Securities Custodian
--------	-------	--------	--------	--------

ASSIGNMENT FORM

To assign this security, fill in the form below:
I or we assign and transfer this security to

                                                                                                                                         
            (Print or type assignee's name, address and zip code)

                                                                                                                                         
            (Insert assignee's social security or tax I.D. No.)

and irrevocably appoint                                                                      agent to transfer this security on the books of the Company. The agent may substitute another to act for him.

Date:                                           Your Signature:                                                             
                                                                                                                                                      
            Sign exactly as your name appears on the other side of this security.

FORM OF CONVERSION NOTICE

To:	Bausch & Lomb Incorporated
The undersigned registered Holder of this security hereby exercises the option to convert this security, or portion hereof (which is $1,000 principal amount or an integral multiple thereof) designated below, for shares of Common Stock of Bausch & Lomb Incorporated in accordance with the terms of the Indenture referred to in this security, and directs that the Principal Return, shares of Common Stock, if any, issuable and deliverable upon such conversion, together with any check for cash deliverable upon such conversion in lieu of fractional shares, and any securities representing any unconverted principal amount hereof, be issued and delivered to the registered Holder hereof unless a different name has been indicated below. If the Principal Return, any shares of Common Stock, or any portion of this security not converted are to be issued in the name of a Person other than the undersigned, the undersigned shall pay all transfer taxes payable with re spect thereto.
This notice shall be deemed to be an irrevocable exercise of the option to convert this security.
Dated:
		Signature(s) Signature(s) must be guaranteed by a commercial bank or trust company or a member firm of a major stock exchange if shares of Common Stock are to be issued, or securities to be delivered, other than to or in the name of the registered Holder.
		Signature Guarantee
Fill in for registration of shares if to be delivered, and securities if to be issued other than to and in the name of registered Holder:
(Name)			Certificate No(s) of securities (not required for Global Securities)
(Street Address)			Principal amount to be converted (if less than all): $           ,000
(City state and zip code) Please print name and address			Social Security or Other Taxpayer I.D. Number

FORM OF FUNDAMENTAL CHANGE PURCHASE NOTICE

To:	Bausch & Lomb Incorporated
The undersigned registered Holder of this security hereby acknowledges receipt of a notice from Bausch & Lomb Incorporated (the "Company") as to the occurrence of a Fundamental Change with respect to the Company and requests and instructs the Company to repurchase this security, or the portion hereof (which is $1,000 principal amount or a integral multiple thereof) designated below, in accordance with the terms and conditions specified in this security and the Indenture referred to in this security and directs that the check in payment for this security or the portion thereof and any securities representing any unrepurchased principal amount hereof, be issued and delivered to the registered Holder hereof unless a different name has been indicated below. If any portion of this security not repurchased is to be issued in the name of a Person other than the undersigned, the undersigned shall pay all transfer taxes payable with respect there to.
Dated:
		Signature(s) Signature(s) must be guaranteed by a commercial bank or trust company or a member firm of a major stock exchange if securities are to be delivered, other than to or in the name of the registered Holder.
		Signature Guarantee
Fill in for registration of shares if to be delivered, and securities if to be issued other than to and in the name of registered Holder:
(Name)			Certificate No(s) of securities (not required for Global Securities)
(Street Address)			Principal amount to be converted (if less than all): $           ,000
(City state and zip code) Please print name and address			Social Security or Other Taxpayer I.D. Number

FORM OF REPURCHASE NOTICE

To:	Bausch & Lomb Incorporated
The undersigned registered Holder of this security hereby acknowledges receipt of a notice from Bausch & Lomb Incorporated (the "Company") as to the Holder's option to require the Company to repurchase this security and requests and instructs the Company to repurchase this security, or the portion hereof (which is $1,000 principal amount or a integral multiple thereof) designated below, in accordance with the terms and conditions specified in this security and the Indenture referred to in this security and directs that the consideration in payment for this security or the portion thereof and any securities representing any unrepurchased principal amount hereof, be issued and delivered to the registered Holder hereof unless a different name has been indicated below. The 2004 Senior Convertible Notes shall be purchased as of the Repurchase Date pursuant to the terms and conditions specified in the 2004 Senior Convertible Notes and in the In denture. In the event the Company elected, pursuant to the notice that it is required to give, to pay the Purchase Price in shares of Common Stock, but the Purchase Price is ultimately paid to the Holder entirely in cash because any of the conditions to payment of the Purchase Price, or any portion of the Purchase Price, in shares of Common Stock is not satisfied prior to the close of business on the last Business Day prior to the Repurchase Date, the undersigned elects [strike out the inapplicable election]: (A) to withdraw the purchase notice as to $          in aggregate principal amount of the 2004 Senior Convertible Notes to which it relates; or (B) to receive cash in respect of the entire Purchase Price for all Senior Convertible Notes subject to the purchase notice. If any portion of this security not repurchased is to be issued in the name of a Person other than the undersigned, the undersigned shall pay all transfer taxes payable with respect there to. The term "consideration" as used within this paragraph shall mean cash or Common Stock.
Dated:
		Signature(s) Signature(s) must be guaranteed by a commercial bank or trust company or a member firm of a major stock exchange if securities are to be delivered, other than to or in the name of the registered Holder.
		Signature Guarantee
Fill in for registration of securities if to be issued other than to and in the name of registered Holder:
(Name)			Certificate No(s) of securities (not required for Global Securities)
(Street Address)			Principal amount to be converted (if less than all): $           ,000
(City state and zip code) Please print name and address			Social Security or Other Taxpayer I.D. Number

EXHIBIT B

CERTIFICATE OF AUTHENTICATION

This is one of the securities of the series designated therein referred to in the within-mentioned Indenture.
	CITIBANK, N.A.,   as Trustee
	By:                                                                       Authorized Offier

EXHIBIT C
PROJECT PAYMENT SCHEDULE

Date	Actual/360 Factor	Projected Stock Price (Based on Return)	Project 6 months LIBOR (annual rate)	Accreted Principal Value of Convertible	Bond Principal Accreted at Comparable Yield	Market Value of Covert Feature (Based on Parity)	Non Contingent Payment	Contingent Payment	Tax Deduction
08/04/2003		$40.96	1.10%	$1,000.00	$1,000.00	$666.66	--	--
02/01/2004	0.503	$42.78	1.17%	$1,000.00	$1,033.59	$696.31	$8.04	$0.00	$41.63
08/01/2004	0.506	$44.69	1.65%	$1,000.00	$1,068.39	$727.45	$8.46	$0.00	$43.27
02/01/2005	0.511	$46.71	2.01%	$1,000.00	$1,102.59	$760.33	$11.01	$0.00	$45.21
08/01/2005	0.503	$48.79	2.75%	$1,000.00	$1,135.87	$794.14	$12.63	$0.00	$45.90
02/01/2006	0.511	$51.00	3.24%	$1,000.00	$1,167.31	$830.04	$16.62	$0.00	$48.07
08/01/2006	0.503	$53.27	3.74%	$1,000.00	$1,197.10	$866.96	$18.81	$0.00	$48.60
02/01/2007	0.511	$55.67	4.18%	$1,000.00	$1,226.11	$906.15	$21.65	$0.00	$50.66
08/01/2007	0.503	$58.15	4.42%	$1,000.00	$1,253.62	$946.44	$23.53	$0.00	$51.04
02/01/2008	0.511	$60.78	4.78%	$1,000.00	$1,281.53	$989.23	$25.14	$0.00	$53.05
08/01/2008	0.506	$63.50	4.88%	$1,000.00	$1,308.50	$1,033.46	$26.67	$0.00	$53.64
02/01/2009	0.511	$66.37	5.15%	$1,000.00	$1,336.38	$1,080.18	$27.50	$0.00	$55.38
08/01/2009	0.503	$69.32	5.28%	$1,000.00	$1,363.61	$1,128.22	$28.40	$0.00	$55.63
02/01/2010	0.511	$72.45	5.49%	$1,000.00	$1,391.79	$1,179.22	$29.53	$0.00	$57.71
08/01/2010	0.503	$75.67	5.54%	$1,000.00	$1,419.62	$1,231.66	$30.11	$0.00	$57.94
02/01/2011	0.511	$79.09	5.70%	$1,030.85	$1,475.92	$1,287.34	$0.00	$3.78	$60.08
08/01/2011	0.503	$82.61	5.69%	$1,062.97	$1,533.48	$1,344.58	$0.00	$3.88	$61.44
02/01/2012	0.511	$86.35	5.81%	$1,096.61	$1,594.25	$1,405.37	$0.00	$4.12	$64.90
08/01/2012	0.506	$90.21	5.97%	$1,131.58	$1,656.72	$1,468.21	$0.00	$4.26	$66.74
02/01/2013	0.511	$94.29	6.06%	$1,168.98	$1,722.33	$1,534.58	$0.00	$4.50	$70.11
08/01/2013	0.503	$98.48	6.03%	$1,207.53	$1,789.40	$1,602.82	$0.00	$4.63	$71.70
02/01/2014	0.511	$102.93	6.09%	$1,247.80	$1,860.21	$1,675.28	$0.00	$4.92	$75.73
08/01/2014	0.503	$107.51	6.12%	$1,289.11	$1,932.60	$1,749.78	$0.00	$5.05	$77.44
02/01/2015	0.511	$112.37	6.16%	$1,332.72	$2,009.02	$1,828.88	$0.00	$5.37	$81.79
08/01/2015	0.503	$117.36	6.33%	$1,377.31	$2,087.14	$1,901.21	$0.00	$5.52	$83.64
02/01/2016	0.511	$122.67	6.36%	$1,425.42	$2,169.61	$1,996.57	$0.00	$5.86	$88.33
08/01/2016	0.506	$128.15	6.38%	$1,474.84	$2,254.38	$2,085.84	$0.00	$6.06	$90.82
02/01/2017	0.511	$133.95	6.38%	$1,526.67	$2,343.38	$2,180.14	$0.00	$6.40	$95.41
08/01/2017	0.503	$139.90	6.39%	$1,579.49	$2,434.36	$2,277.09	$0.00	$6.58	$97.56
02/01/2018	0.511	$146.23	6.38%	$1,635.07	$2,530.40	$2,380.03	$0.00	$6.98	$103.02
08/01/2018	0.503	$152.73	6.47%	$1,691.62	$2,628.56	$2,485.86	$0.00	$7.18	$105.34
02/01/2019	0.511	$159.64	6.45%	$1,751.86	$2,732.18	$2,598.24	$0.00	$7.62	$111.14
08/01/2019	0.503	$166.74	6.43%	$1,813.06	$2,838.08	$2,713.78	$0.00	$7.84	$113.74
02/01/2020	0.511	$174.27	6.40%	$1,877.27	$2,949.87	$2,836.46	$0.00	$8.32	$120.11
08/01/2020	0.506	$182.07	6.37%	$1,942.77	$3,064.75	$2,963.30	$0.00	$8.60	$123.48
02/01/2021	0.511	$190.30	6.34%	$2,011.02	$3,185.36	$3,097.26	$0.00	$9.09	$129.70
08/01/2021	0.503	$198.76	6.30%	$2,080.17	$3,308.62	$3,234.99	$0.00	$9.34	$132.61
02/01/2022	0.511	$207.74	6.27%	$2,152.51	$3,438.72	$3,381.23	$0.00	$9.92	$140.02
08/01/2022	0.503	$216.98	6.22%	$2,225.71	$3,571.67	$3,531.59	$0.00	$10.20	$143.15
02/01/2023	0.511	$226.79	6.18%	$2,302.19	$3,712.00	$3,691.25	$0.00	$10.83	$151.15
08/01/2023	0.503	$236.88	6.06%	$2,379.48	$3,855.39	$3,855.39	$0.00	$11.14	$154.53
							$288.12	$177.99	$3,321.50

Date	Payment Upon Conversion Pri to Maturity	Total Projected Payments	Discount Factor Using Comparable Yield	Present Value of Contingent Payment	Present Value of Total Projected Payments
08/04/2003	-	-	-		-
02/01/2004	-	$8.04	0.9600	$0.00	$7.72
08/01/2004	-	$8.46	0.9215	$0.00	$7.80
02/01/2005	-	$11.01	0.8840	$0.00	$9.74
08/01/2005	-	$12.63	0.8487	$0.00	$10.72
02/01/2006	-	$16.62	0.8143	$0.00	$13.54
08/01/2006	-	$18.81	0.7817	$0.00	$14.70
02/01/2007	-	$21.65	0.7500	$0.00	$16.23
08/01/2007	-	$23.53	0.7200	$0.00	$16.94
02/01/2008	-	$25.14	0.6908	$0.00	$17.37
08/01/2008	-	$26.67	0.6630	$0.00	$17.68
02/01/2009	-	$27.50	0.6361	$0.00	$17.49
08/01/2009	-	$28.40	0.6107	$0.00	$17.35
02/01/2010	-	$29.53	0.5859	$0.00	$17.30
08/01/2010	-	$30.11	0.5625	$0.00	$16.94
02/01/2011	-	$3.78	0.5396	$2.04	$2.04
08/01/2011	-	$3.88	0.5181	$2.01	$2.01
02/01/2012	-	$4.12	0.4970	$2.05	$2.05
08/01/2012	-	$4.26	0.4771	$2.03	$2.03
02/01/2013	-	$4.50	0.4577	$2.06	$2.06
08/01/2013	-	$4.63	0.4394	$2.03	$2.03
02/01/2014	-	$4.92	0.4216	$2.07	$2.07
08/01/2014	-	$5.05	0.4047	$2.05	$2.05
02/01/2015	-	$5.37	0.3883	$2.08	$2.08
08/01/2015	-	$5.52	0.3728	$2.06	$2.06
02/01/2016	-	$5.86	0.3576	$2.09	$2.09
08/01/2016	-	$6.06	0.3433	$2.08	$2.08
02/01/2017	-	$6.40	0.3293	$2.11	$2.11
08/01/2017	-	$6.58	0.3162	$2.08	$2.08
02/01/2018	-	$6.98	0.3033	$2.12	$2.12
08/01/2018	-	$7.18	0.2912	$2.09	$2.09
02/01/2019	-	$7.62	0.2794	$2.13	$2.13
08/01/2019	-	$7.84	0.2682	$2.10	$2.10
02/01/2020	-	$8.32	0.2573	$2.14	$2.14
08/01/2020	-	$8.60	0.2470	$2.12	$2.12
02/01/2021	-	$9.09	0.2370	$2.15	$2.15
08/01/2021	-	$9.34	0.2275	$2.13	$2.13
02/01/2022	-	$9.92	0.2182	$2.17	$2.17
08/01/2022	-	$10.20	0.2095	$2.14	$2.14
02/01/2023	-	$10.83	0.2010	$2.18	$2.18
08/01/2023	$3,855.39	$3,866.53	0.1930	$2.15	$746.17
	$3,855.39	$4,321.50	Total PV	$54.46	$1,000.00

EXHIBIT D

TABLE OF ADDITIONAL SHARES IN EVENT OF CASH TAKE-OVER TRANSACTION PURSUANT TO SECTION 1.10(g)(vii)
OF
SIXTH SUPPLEMENTAL INDENTURE

The following table sets forth the hypothetical Stock Price and number of Additional Shares, subject to adjustment upon adjustment to the Conversion Rate, issuable per $1,000 aggregate principal amount of Securities as provided in Section 1.10(g)(vii) of the Indenture:

ADDITIONAL SHARES ON CASH TAKE-OVER (EXPRESSED AS SHARES PER $1,000 ORIGINAL PRINCIPAL AMOUNT)
Effective	Stock Price on Effective Date of Change of Control
Date	$40.96	$42.00	$46.00	$50.00	$54.00	$58.00	$62.00	$66.00	$100.00	$150.00	$200.00	$250.00
August 1, 2004	9.9935	9.5335	8.0044	6.7860	5.8018	4.9981	4.3337	3.7816	1.4110	0.4093	0.0810	0.0000
August 1, 2005	9.5717	9.0974	7.5277	6.2841	5.2881	4.4825	3.8250	3.2841	0.8763	0.1864	0.0165	0.0000
August 1, 2006	9.3334	8.8471	7.2403	5.9728	4.9633	4.1526	3.4965	2.9619	0.7634	0.1336	0.0025	0.0000
August 1, 2007	8.9233	8.4188	6.7555	5.4506	4.4207	3.6036	2.9521	2.4304	0.5567	0.0744	0.0000	0.0000
August 1, 2008	8.5541	8.0229	6.2716	4.9042	3.8363	3.0031	2.3535	1.8475	0.2664	0.0164	0.0000	0.0000
August 1, 2009	8.2838	7.7119	5.8136	4.3271	3.1790	2.3070	1.6563	1.1792	0.0848	0.0082	0.0000	0.0000
August 1, 2010	8.1381	7.5335	5.4631	3.7240	2.2425	0.9654	0.0000	0.0000	0.0000	0.0000	0.0000	0.0000

Determination of Additional Shares if the Stock Price and Effective Date are not set forth on the table above and the Stock Price is:

1. between two Stock Prices on the table or the Effective Date is between two dates on the table, the number of Additional Shares will be determined by straight-line interpolation between the number of Additional Shares set forth for the higher and lower Stock Price and the two Effective Dates, as applicable, based on a 365-day year;
   
2. in excess of $200.00 per share (subject to adjustment), no Additional Shares will be issued upon conversion; or
   
3. less than $40.96 per share (subject to adjustment), no Additional Shares will be issued upon conversion.
   

Notwithstanding the foregoing, in no event shall the total number of shares of Common Stock issuable upon conversion of the 2004 Senior Convertible Notes exceed 24.4141 for each $1,000 Original Principal Amount.

EX-10.R

Exhibit 10-r

Amended and Restated as of
February 25, 2003
Amended January 27, 2004
Amended July 19, 2004
Amended January 25, 2005

BAUSCH & LOMB INCORPORATED
ANNUAL INCENTIVE COMPENSATION PLAN

I.	Introduction. The Bausch & Lomb Incorporated Annual Incentive Compensation Plan (the "Plan") is established to create effective incentives for managers of Bausch & Lomb Incorporated (the "Company") to set and achieve objectives that are designed to enhance business performance and increase shareholder value. The Plan is also designed to provide competitive levels of compensation to enable the Company to attract and retain managers who are able to exert a significant impact on the value of the Company for its shareholders.
II.	Plan Participants.
	Employees of the Company who are in the mid management band and above and are selected to participate in the Plan are eligible to participate in the Plan ("Participants").
III.	Definitions. Capitalized terms not otherwise defined when used in this Plan shall have the following meanings.

A.	"Approved Incentive Award" or "Bonus". An Approved Incentive Award or Bonus is the incentive which has been approved in accordance with this Plan to be paid by the Company to the Participant.
B.	"Bonus Pool". shall have the meaning set forth in Section VI.A.1.
C.	"Committee". means Compensation Committee of the Company's Board of Directors.
D.	"Performance Management Process (PMP) objectives". PMP objectives are team or individual performance measures which are established in accordance with guidelines issued by the Corporate Senior Vice President - Human Resources, and approved by the immediate manager of the individual or team to whom the measure applies and that person's immediate manager, as further defined in Section IV B hereof.
E.	"Operating Unit Objective". An Operating Unit Objective is a performance target for one or more of the Company's geographic regional businesses (e.g. Americas; Asia; Europe, Middle East and Africa) or functional centers (Research Development & Engineering; Global Supply Chain or Global Category Groups), which is established early in a Plan Year with approval from the relevant Operating Unit head, the Corporate Senior Vice President-Human Resources, the Senior Vice President and Chief Financial Officer and the Chief Executive Officer, as further defined in Article IV B hereof.
F.	"Plan Year" means each one year period coincident with a fiscal year of the Company.
G.	"Standard Incentive Funding". is the Bonus Pool funding at Standard Incentive percentage for all Participants in a particular group or Operating Unit. A standard incentive percentage has been established by job band and is applied to eligible base salary earnings to determine the appropriate funding.
H.	"stretch goal". Defined in Article V.
I.	"target goal". Defined in Article V.
J.	"threshold goal". Defined in Article V.
K.	"Total Company Objective". A Total Company Objective is a performance target set for the Company as a whole, which is established early in a Plan Year with approval by the Committee, as further defined in Article IV B hereof.

IV. Performance Measurement.

A.

Each Plan Year, the Company and each Operating Unit and eligible Participant will set objectives in accordance with this Plan. These will be applied for Incentive Plan purposes either to fund a Bonus Pool (as to Total Company and Operating Unit Objectives) or to allocate a Bonus Pool among Participants.

B.

Total Company, Operating Unit and PMP Objectives will be set early in the Plan Year in which performance is to occur. Total Company performance will be evaluated based on Total Company Objectives which are set with approval from the Committee. Operating Unit Objectives for commercial business units shall be based on objective identifiable measures of business performance, including, for example, sales and operating earnings, return on assets/equity and cash flow. Operating Unit Objectives for units other than commercial business units (e.g., RD&E, Global Supply Chain) shall be based on deliverables required to meet annual plan and longer term objectives, including, for example, cost containment, cost improvement, product launch, product quality and cash flow goals. Global Category Group objectives shall be based on financial measures such as category sales, category distribution margin and/or strategic imperatives such as market share goals. All Operating Unit Objectives shall be approved by the relevant Operating Unit head as well as the Senior Vice President- Human Resources, Senior Vice President and Chief Financial Officer, and the Chief Executive Officer. Company and Operating Unit Objectives will be assigned a weighting for Bonus Pool funding purposes, assuming Company performance at threshold levels as set forth in Section VI.A.1 below . (Bonus Pool funding is described further under Section VI of this Plan). The weighting of Company and Operating Unit Objectives will be approved by the Committee at the time Company Objectives are approved. 2003 Annual Incentive Plan weightings for Bonus Pool Funding are set forth in Appendix B hereto. PMP objectives will be team or individual measures which will, where possible, impact the Operating Unit Objectives and ultimately the Total Company Objectives. PMP objectives shall be set in accordance with guidelines issued by the Senior Vice President-Human Resources, and shall be approved by the immediate manager of the individual or team to whom the measure applies, and that person's immediate manager (i.e., a "one-over-one" approval).

V.

Threshold, Target and Stretch Goals Total Company and Operating Unit Objectives will be set with a "target" goal, a "stretch" goal and a "threshold" goal. Achievement of the "target" goal should reflect performance which is in line with expected performance, and which supports expected Company performance. "Stretch" goals should assume performance well in excess of that required to achieve the target goal, while "threshold" goals should define a minimum level of performance warranting funding of a Bonus Pool. "Stretch" and "threshold" goals must be approved with respect to each Objective at the same time and in the same manner that the respective Objective is approved.

VI.

Bonus Calculation.

A. The amount of an individual Participant's Approved Incentive Award (or Bonus) in any Plan Year is determined as follows:

1.	A Bonus Pool for Corporate Officers, Corporate Staff and for each Operating Unit will be calculated and funded based on a factor taking into account (a) Standard Incentive Funding within the Operating Unit or Staff and (b) performance against Company Objectives and, where applicable, Operating Unit Objectives. Where an Operating Unit has multiple Operating Unit Objectives, performance will be assessed in accordance with guidelines established by the Corporate Senior Vice President - Human Resources. In order for the Operating Unit portion of a Bonus Pool to be funded, the Company must achieve at least the threshold level of performance.
2.	The Bonus Pool which is so determined shall then be allocated among the individual participants within a group (Corporate Officers or Corporate Staff) or Operating Unit based upon achievement by the members of that group or Operating Unit against PMP objectives. The total of Annual Incentive Awards with respect to a group or Operating Unit shall not exceed the Bonus Pool for such group or Operating Unit but may be less than the Bonus Pool.
3.	The Approved Incentive Award is based on the extent to which the relevant Bonus Pool is funded and on an assessment of performance against PMP objectives. Assessment of performance against PMP objectives shall be in accordance with guidelines issued by the Senior Vice President, Human Resources, and shall be subject to discretionary upward or downward modification in accordance with such guidelines.
4.	Where performance against Company or Operating Unit Objectives meets or exceeds the "stretch goal" established with respect to that Objective, the calculation of the funded Bonus Pool which is attributable to that Objective shall be 200% of the Standard Incentive Funding. Conversely, where performance against a Company or Operating Unit Objective meets the "threshold goal" established with respect to that Objective, the calculation of the funded Bonus Pool will start at 0% of the Standard Incentive Funding.
5.	Where actual performance on a particular Objective falls between "threshold", "target" and "stretch" goals, the Bonus Pool Funding which is attributable to that Objective shall be calculated on a pro-rata basis with respect to the payouts set for achievement of goals (50%, 100%, and 200%) depending on where performance lies between such goals.

B. Bonus Pool Funding may be modified as a result of the following:

1.	Performance against Company or Operating Unit Objectives may be modified by the Committee based on the Committee's overall assessment of the manner in which such performance was achieved or, with respect to Operating Unit performance, relative contribution to Total Company Performance.
2.	In addition, Bonus Pool Funding for a group or Operating Unit may be modified by the Chief Executive Officer, in his sole discretion, to reflect a group's or Operating Unit's relative contribution to Total Company performance, provided that such modification shall not have the effect of increasing the total Funded Bonus Pool for the Company as a whole beyond the level approved by the Committee.
3.	Any modification to the Chief Executive Officer's Approved Incentive Award shall be approved by the Committee.

C. An individual Participant's Approved Incentive Award shall be determined based upon relevant performance against PMP objectives, which will allow for allocation to the Participant of a portion of the funded Bonus Pool of such Participant's group or Operating Unit. Assessment of performance against PMP objectives shall be in accordance with guidelines issued by the Senior Vice President, Human Resources. Approved Incentive Awards may vary upward or downward against the targeted level based on evaluation of a participant's performance against PMP objectives. , The total of all Bonuses within each group or Operating Unit cannot exceed 100% of the funded Bonus Pool as to such group or Operating Unit.

VII. Change in Status During Plan Year

A. New Hires and Promotions.

1.

A newly hired or recently promoted employee of the Company who is a Participant in the Plan for at least six months of his/her first Plan Year will be eligible for a Bonus which is based on salary paid during the partial Plan Year after the effective date of hire or promotion, as the case may be.

2.

A newly hired or recently promoted employee of the Company who is a Participant for less than six months in his/her initial Plan Year will be eligible for a Bonus for a portion of that Plan Year after the effective date of hire or promotion, as the case may be, only if the terms of such partial Plan Year bonus are agreed to in writing between the Participant and the Company at the time of hire. These arrangements must be approved in writing in advance by Corporate Senior Vice President Human Resources and normal one-over-one approval matrix.

B. Transfers.

1. Where a Participant transfers from one Operating Unit or group to another during a Plan Year, the Bonus for the Plan Year in which the transfer occurs will be based on Bonus Pool Funding as to the particular Operating Unit or group in which the Participant worked for the majority of the Plan Year, or as otherwise approved by the Corporate Senior Vice President Human Resources.

C. Terminations.

1.	A Participant who terminates voluntarily (other than retirement) from the Company either (i) during a Plan Year or (ii) after the Plan Year ends but before the date on which the Approved Incentive Award or Bonus with respect to such Plan Year is actually paid by the Company to the Participant will not be eligible for any bonus for that Plan Year, or the Plan Year in which the termination occurs.
2.	In cases of retirement or involuntary termination due to death, disability, reduction in work force, or the sale or closing of a plant or business unit before completion by the Participant of at least six months service as an eligible Participant during the Plan Year, such Participant will not be eligible for any Bonus for that Plan Year. In cases of retirement or involuntary termination due to death, disability, reduction in work force, or the sale or closing of a plant or business unit after completion by the Participant of at least six months service as an eligible Participant during the Plan Year, a pro rata Bonus will be calculated and paid in accordance with the Plan.
3.	A Participant who is terminated involuntarily for any other reason either (i) during a Plan Year or (ii) after the Plan Year ends but before the date on which the Approved Incentive Award or Bonus with respect to such Plan Year is actually paid by the Company to the Participant will not be eligible for any Bonus for that Plan Year, or the Plan Year in which the termination occurs.

D.	Leave of Absence.
	An employee whose status as an active employee is changed during a Plan Year as a result of a leave of absence may, at the discretion of the Committee, be eligible for a pro rata Bonus determined in the same way as in Subsection VII A.
E.	Demotions.

1.	An employee who is transferred into a non-eligible group of employees after having served six months during the Plan Year shall be paid a pro-rata Bonus determined in the same manner as in Subsection VII A.
2.	An employee who is transferred into a non-eligible group of employees prior to having served six months during the Plan Year in an eligible group of employees shall not be entitled to a Bonus.
3.	Where an employee is transferred into a lower band position within a Plan Year, such employee's Standard Incentive Award percentage shall be based on the band or position in which the employee spent the majority of the Plan Year.

VIII. Change of Control.

Notwithstanding any other provision of this Plan, a special incentive bonus shall be paid to Participants if there is a change in control of the Company during the Plan Year.

1. The amount of the special incentive bonus shall equal the greater of (a) the Bonus based upon "target" performance without regard to any other calculations under the Plan, prorated where applicable, through the date of termination of the Participant's employment where it is terminated involuntarily other than for good cause, or (b) the Bonus which would be payable to the Participant based on results for the full Plan Year, prorated where applicable, through the date of termination of the Participant's employment where it is terminated involuntarily other than for good cause, as applicable.

A change of control of the Company is defined as follows:

           (a) 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 (i) the then outstanding shares of common stock of the Company (the "Outstanding Company Common Stock") or (ii) 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 the following acquisitions shall not constitute a Change of Control: (i) any acquisition directly from the Company (excluding an acquisition by virtue of the exercise of a conversion privilege unless the security being so converted was itself acquired 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 corporation controlled by the Company or (iv) any acquisition by any corporation pursuant to a reorganization, merger or consolidation, if, following such reorganization, merger or consolidation, the conditions described in clauses (i), (ii) and (iii) of subsection (c) of this Section are satisfied; or

           (b) Individuals who, as of February 25, 2003, 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 February 25, 2003 whose election, or nomination for election by the Company's shareholders, 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 either an actual or threatened election contest (as such terms are 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; or

           (c) Approval by the shareholders of the Company of a reorganization, merger, binding share exchange or consolidation, in each case, unless, following such reorganization, merger, binding share exchange or consolidation, (i) more than 60% of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger, binding share exchange or consolidation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such reorganization, merger, binding share exchange or consolidation in substantially the same proportions as their ownersh ip, immediately prior to such reorganization, merger, binding share exchange or consolidation, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (ii) no Person (excluding the Company, any employee benefit plan (or related trust) of the Company or such corporation resulting from such reorganization, merger, binding share exchange or consolidation and any Person beneficially owning, immediately prior to such reorganization, merger, binding share exchange or consolidation, directly or indirectly, 20% or more of the Outstanding Company Common Stock or Outstanding Voting Securities, as the case may be) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of the corporation resulting from such reorganization, merger, binding share exchange or consolidation or the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of director s and (iii) at least a majority of the members of the board of directors of the corporation resulting from such reorganization, merger, binding share exchange or consolidation were members of the Incumbent Board at the time of the execution of the initial agreement providing for such reorganization, merger, binding share exchange or consolidation; or

           (d) Approval by the shareholders of the Company of (i) a complete liquidation or dissolution of the Company or (ii) the sale or other disposition of all or substantially all of the assets of the Company, other than to a corporation, with respect to which following such sale or other disposition, (A) more than 60% of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors is then beneficially owned, directly or indirectly, by all or substantially all of the individuals and entities who were the beneficial owners, respectively, of the Outstanding Company Common Stock and Outstanding Company Voting Securities immediately prior to such sale or other disposition in substantially the same proportion as their ownership, immediately prior to such sale or other d isposition, of the Outstanding Company Common Stock and Outstanding Company Voting Securities, as the case may be, (B) no Person (excluding the Company and any employee benefit plan (or related trust) of the Company or such corporation and any Person beneficially owning, immediately prior to such sale or other disposition, directly or indirectly, 20% or more of the Outstanding Company Common Stock or Outstanding Company Voting Securities, as the case may be) beneficially owns, directly or indirectly, 20% or more of, respectively, the then outstanding shares of common stock of such corporation and the combined voting power of the then outstanding voting securities of such corporation entitled to vote generally in the election of directors and (C) at least a majority of the members of the board of directors of such corporation were members of the Incumbent Board at the time of the execution of the initial agreement or action of the Board providing for such sale or other disposition of assets of the Company.

IX. Miscellaneous.

A.	Amendments. The Committee shall have the right to modify or amend this Plan from time to time, or suspend it or terminate it entirely; provided that no such modification, amendment, suspension, or termination may, without the consent of any affected Participants (or beneficiaries of such Participants in the event of death), reduce the rights of any such Participants (or beneficiaries, as applicable) to a payment or distribution already payable under Plan terms in effect prior to such change.
B.	Role of the Committee. (i) Interpretation of the Plan. Any decision of the Committee with respect to any issue concerning individuals selected as Participants, the amount, terms, form and time of payment of bonuses, and interpretation of any Plan guideline, definition, term or requirement shall be final and binding. (ii) Administration. The Committee has designated the Corporate Senior Vice President Human Resources to control and manage the operation and administration of the Plan. The Corporate Senior Vice President Human Resources shall administer the Plan in accordance with its terms and shall have all powers necessary to carry out the provisions of the Plan, except such powers as are specifically reserved to the Committee or some other person. These powers include the power to make and publish such rules and regulations as he or she may deem necessary to carry out the provisions of the Plan. (iii) Adjustment to Objectives. If any event occurs during a performance period which requires changes to preserve the incentive features of this Plan, the Committee may make appropriate upward or downward adjustments in the specified performance levels.
C.	Right to Continued Employment; Additional Awards. Participation in the Plan or the receipt of a bonus under the Plan shall not give the recipient any right to continued employment (such employment shall be "at will"), and the right and power to dismiss any employee is specifically reserved to the Company. In addition, the receipt of a bonus with respect to any Plan Year shall not entitle the recipient to any bonus with respect to any subsequent Plan Year, except as expressly provided in the Plan.
D.	Withholding Taxes. The Company shall have the right to deduct from all payments under this Plan any Federal or state taxes required by law to be withheld with respect to such payments.
E.	Deferred Compensation. Participants may elect to defer all or part of a Bonus in accordance with the procedures set forth in the Company's Executive Deferred Compensation Plan.
F.	Interaction with Management Incentive Compensation Plan. Amounts payable under this Plan shall be offset against amounts actually paid to a Participant under the Bausch & Lomb Incorporated Management Incentive Compensation Plan, dated as of January 1, 1998.
G.	Governing Law. This Plan shall be construed in accordance with and governed by the laws of the State of New York.

BAUSCH & LOMB INCORPORATED


By:     /s/ David Nachbar                                  
          David Nachbar
          Corporate Senior Vice President
          Human Resources

          Dated: January 25, 2005

APPENDIX LIST

Appendix A -



Appendix B - STANDARD INCENTIVE PERCENTAGE TABLE



INCENTIVE WEIGHTINGS

APPENDIX A

Amended and Restated as of February 25, 2003
Amended January 27, 2004
Amended July 19, 2004
Amended January 25, 2005

STANDARD INCENTIVE PERCENTAGE

BAND/GRADE	STANDARD INCENTIVE PERCENTAGE (AS A % OF BASE SALARY)
NON-OFFICERS:
MM/T	15%
EXEC	30%
SR. EXEC	35%
OFFICERS*:
*Standard incentive levels will range from 50% to 100% of base salary, depending on position, as approved at the beginning of each Plan Year by the Compensation Committee of the Board of Directors.

Amended and Restated as of February 25, 2003
Amended January 27, 2004
Amended July 19, 2004
Amended January 25, 2005

Appendix B

Bonus Pool Funding

	Total Company	Operating Unit
Corporate Officers(1)	100%	--
Corporate Staff	100%	--
Global Operations and Engineering:	75%	25%
Global Research and Development	75%	25%
Regional/Commercial:	75%	25%
Global Category Groups	75%	25%
Other Operating Units as approved by the CEO	75%	25%

(1) Includes officers with no operating unit responsibilities.

EX-10.W

EXHIBIT 10-w

[BAUSCH & LOMB LOGO]

November 12, 2003

TO:	Paul Howes
FROM:	Ronald L. Zarrella
RE:	Employment Terms

The company provides corporate officers with certain severance benefits set forth in its Corporate Officer Separation Plan, as amended effective April 1, 2003. As part of our offer to you to join Bausch & Lomb, we have agreed to grant you an enhancement to the Plan. Specifically, we have agreed that if your employment is terminated on or before July 1, 2006, and if you are terminated under circumstances which entitle you to severance protection under the Plan, you will be provided a cash payout equal to the fair market value at severance date of the restricted stock grant of 25,000 shares you received as part of your hiring package.

As of July 1, 2003, you have entered into a Change of Control Agreement with the Company. In the event of a Change of Control as defined in that Agreement, the benefits provided herein shall be superseded by the Change of Control Agreement, such that you will not be entitled to a duplication of any amounts payable or benefits provided under this agreement and the Change of Control Agreement.

Please indicate your agreement with these terms by signing in the space below.

	/s/ Ronald L. Zarrella     Ronald L. Zarrella
/s/ Paul Howes                     Paul Howes Date: November 12, 2003

EX-12

Bausch & Lomb Incorporated

Exhibit 12

Statement Regarding Computation of Ratio of Earnings to Fixed Charges

(Dollar Amounts In Millions)

	December 25, 2004	December 27, 2003
Income before Income Taxes and Minority Interest	$246.8	$197.0
Fixed Charges	50.1	54.7
Current Period Amortization of Capitalized Interest	0.5	0.2
Capitalized Interest	(1.1)	(1.1)
Total Earnings as Adjusted	$296.3	$250.8
Fixed Charges
Interest (Including Interest Expense and Capitalized Interest)	$  49.5	$  54.2
Portion of Rents Representative of the Interest Factor	0.6	0.5
Total Fixed Charges	$  50.1	$  54.9
Ratio of Earnings to Fixed Charges	5.9	4.6

EX-21

Exhibit 21

Bausch & Lomb Incorporated
Subsidiaries
(as of December 25, 2004)

Name	Jurisdiction Under Which Organized
B&L CRL Inc.	Delaware
B&L Domestic Holdings Corp.	Delaware
B&L Financial Holdings Corp.	Delaware
B&L SPAF Inc.	Delaware
B&L VPLEX Holdings, Inc.	California
Bausch & Lomb Argentina S.R.L.	Argentina
Bausch & Lomb (Australia) Pty. Limited	Australia
Bausch & Lomb B.V.	Netherlands
Bausch & Lomb B.V.B.A.	Belgium
Bausch & Lomb Canada, Inc.	Canada
Bausch & Lomb China, Inc.	Delaware
Bausch & Lomb (China) Investment Company Limited	China
Bausch & Lomb Danmark A/S	Denmark
Bausch & Lomb Eyecare (India) Private Limited	India
Bausch & Lomb France S.A.S.	France
Bausch & Lomb Fribourg SA	Switzerland
Bausch & Lomb GmbH	Austria
Bausch & Lomb GmbH	Berlin
Bausch & Lomb (Hong Kong) Limited	Hong Kong
Bausch & Lomb International, Inc.	New York
Bausch & Lomb IOM S.p.A.	Italy
Bausch & Lomb Ireland	Ireland
Bausch & Lomb (Jersey) Limited	Jersey
Bausch & Lomb Korea Co., Ltd.	Korea
Bausch & Lomb-Lord (BVI) Incorporated	British Virgin Islands
Bausch & Lomb Luxembourg	Luxembourg
Bausch & Lomb (Malaysia) Sdn. Bhd.	Malaysia
Bausch & Lomb Mexico, S.A. de C.V.	Mexico
Bausch & Lomb (New Zealand) Limited	New Zealand
Bausch & Lomb Nordic AB	Sweden
Bausch & Lomb (Philippines), Inc.	Philippines
Bausch & Lomb Realty Corporation	New York
Bausch & Lomb S.A.	Spain
Bausch & Lomb Saglik Ve Optik Urunleri Ticaret A.S.	Turkey
Bausch & Lomb Scotland Limited	England and Wales
Bausch & Lomb (Shanghai) Trading Company Limited	China
Bausch & Lomb (Singapore) Pte. Ltd.	Singapore
Bausch & Lomb (South Africa) (Pty) Ltd.	South Africa
Bausch & Lomb South Asia, Inc.	Delaware
Bausch & Lomb Swiss AG	Switzerland
Bausch & Lomb Surgical (U.K.)	England and Wales
Bausch & Lomb Taiwan Limited	Taiwan
Bausch & Lomb (Thailand) Limited	Thailand
Bausch & Lomb U.K. Limited	England and Wales
BCF S.A.S.	France
Beijing Bausch & Lomb Eyecare Company, Ltd.	China
BL Industria Otica Ltda.	Brazil
BLEP Holding GmbH	Germany
B.L.J. Company Limited	Japan
Dr. Mann Pharma	Germany
Iolab Corporation	California
P. T. Bausch & Lomb Indonesia (Distributing)	Indonesia
P. T. Bausch & Lomb Manufacturing	Indonesia
RHC Holdings, Inc.	Delaware
Sight Savers, Inc.	Delaware
Technolas GmbH	Germany

EX-23

Exhibit 23

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We hereby consent to the incorporation by reference in the Registration Statement on Forms S-3(Nos. 333-45223, 333-90468, and 333-110094), Forms S-3/A(Nos. 33-51117 and 333-110094), and Forms S-8 (Nos. 333-03611, 333-18057, 333-75924, 333-75922, 333-75920, and 333-118767) of Bausch & Lomb Incorporated of our report dated March 8, 2005 relating to the financial statements, management's assessment of the effectiveness of internal control over financial reporting and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.

/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Rochester, NY
March 8, 2005

EX-24

[Bausch & Lomb Logo]

Exhibit 24

POWER OF ATTORNEY

     The undersigned directors of Bausch & Lomb Incorporated (the "Company"), each hereby constitutes and appoints Ronald L. Zarrella and Robert B. Stiles, or either of them, his or her respective true and lawful attorneys and agents, each with full power and authority to act as such without the other, to sign for and on behalf of the undersigned the Company's Annual Report on Form 10-K for the year ended December 25, 2004, to be filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1933 and the related rules and regulations thereunder, and any amendment or amendments thereto, the undersigned hereby ratifying and confirming all that said attorneys and agents, or either one of them, shall do or cause to be done by virtue hereof.

     IN WITNESS WHEREOF, this instrument has been executed by the undersigned as of this 22^nd day of February 2005.

/s/ Alan M. Bennett            Alan M. Bennett	/s/ Linda Johnson Rice           Linda Johnson Rice
/s/ Domenico De Sole         Domenico De Sole	/s/ William H. Waltrip            William H. Waltrip
/s/ Paul A. Friedman          Paul A. Friedman	/s/ Barry W. Wilson              Barry W. Wilson
/s/ Jonathan S. Linen          Jonathan S. Linen	/s/ Kenneth L. Wolfe             Kenneth L. Wolfe
/s/ Ruth R. McMullin          Ruth R. McMullin	/s/ Ronald L. Zarrella             Ronald L. Zarrella
/s/ John R. Purcell             John R. Purcell

EX-31.A

EXHIBIT (31)-a

Bausch & Lomb Incorporated
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Ronald L. Zarrella, certify that:

1.	I have reviewed this annual report on Form 10-K of Bausch & Lomb Incorporated;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
	a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 8, 2005

/s/ Ronald L. Zarrella           
Ronald L. Zarrella
Chairman and Chief Executive Officer

EX-31.B

EXHIBIT (31)-b

Bausch & Lomb Incorporated
Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Stephen C. McCluski, certify that:

1.	I have reviewed this annual report on Form 10-K of Bausch & Lomb Incorporated;
2.	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.	The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
	a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
	b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
	c) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
	d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.	The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
	a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
	b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: March 8, 2005

/s/ Stephen C. McCluski           
Stephen C. McCluski
Senior Vice President
and Chief Financial Officer

EX-32.A

EXHIBIT 32(a)

Bausch & Lomb Incorporated

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
18 U.S.C. Section 1350

I, Ronald L. Zarrella, Chairman and Chief Executive Officer of Bausch & Lomb Incorporated (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

1.	the Annual Report on Form 10-K of the Company for the annual period ended December 25, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Ronald L. Zarrella     
Ronald L. Zarrella
Chairman and
Chief Executive Officer

Date: March 8, 2005

EX-32.B

EXHIBIT 32(b)

Bausch & Lomb Incorporated

Certification Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002,
18 U.S.C. Section 1350

I, Stephen C. McCluski, Senior Vice President and Chief Financial Officer of Bausch & Lomb Incorporated (the "Company"), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that:

1.	the Annual Report on Form 10-K of the Company for the annual period ended December 25, 2004 as filed with the Securities and Exchange Commission on the date hereof (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.	the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

/s/ Stephen C. McCluski     
Stephen C. McCluski
Senior Vice President and
Chief Financial Officer

Date: March 8, 2005

EX-99.A

EXHIBIT (99)-a

Information Concerning Forward-Looking Statements

Forward-looking statements include statements concerning plans, objectives, goals, projections, strategies, future events or performance, and underlying assumptions and other statements which are other than statements of historical facts. When used in this Annual Report on Form 10-K, the words "anticipate", "appears", "foresee", "should", "expect", "estimate", "project", "will", "are likely" and similar expressions are intended to identify forward-looking statements. The forward-looking statements contained in this Annual Report on Form 10-K under Item 1. Business and elsewhere are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These statements involve predictions of future Company performance, and are thus dependent on a number of factors, which may affect the Company's performance. Where possible, specific factors that may impact performance materially have been identified in connection with specific forward-looking statements. Ad ditional risks and uncertainties include, without limitation, general global and local economic, political and sociological conditions including, without limitation, periods of localized disease outbreak such as the SARS epidemic and the effect on economic, commerce, social and political systems caused by natural disasters (such as, without limitation, earthquakes, hurricanes/typhoons, tornadoes and tsunamis), changes in such conditions, the impact of competition, seasonality and general economic conditions in the global lens and lens care, ophthalmic cataract and refractive and pharmaceutical markets where the Company's businesses compete, effects of war or terrorism, changing currency exchange rates, the general political climate existing between and within countries throughout the world, events affecting the ability of the Company to timely deliver its products to customers, including those which affect the Company's carriers' ability to perform delivery services, changing trends in practitioner and consu mer preferences and tastes, changes in technology, medical developments relating to the use of the Company's products, legal proceedings initiated by or against the Company, including those related to patents and other intellectual property in the U.S. and throughout the world, the impact of Company performance on its financing costs, changes in government regulation of the Company's products and operations, changes in governmental laws and regulations relating to the import and export of products, government pricing changes and initiatives with respect to healthcare products in the U.S. and throughout the world, changes in private and regulatory schemes providing for the reimbursement of patient medical expenses, changes in the Company's credit ratings, or the cost of access to sources of liquidity, the Company's ability to maintain positive relationships with third-party financing resources, the financial well-being and commercial success of key customers, development partners, and suppliers, changes in th e availability of and other aspects surrounding the supply of raw materials used in the manufacture of the Company's products, changes in tax rates or policies or in rates of inflation, changes in accounting principles and the application of such principles to the Company, the performance by third parties upon whom the Company relies for the provision of goods or services, the ability of the Company to successfully execute marketing strategies, the ability of the Company to secure and maintain intellectual property protections, including patent rights, with respect to key technologies in the U.S. and throughout the world, the ability of the Company to secure and maintain copyright protections relative to its customer-valued names, trademarks, trade names and other designations in the U.S. and throughout the world, difficulties or delays in the development, laboratory and clinical testing, regulatory approval, manufacturing, release or marketing of products, the successful completion and integration of acquis itions by the Company, the successful relocation of certain manufacturing processes, the continued successful implementation of efforts in managing and reducing costs and expenses, the continued successful execution of the Company's profitability improvement plans, the Company's success in the process of management testing and auditor attestation of internal controls, as required under the Sarbanes-Oxley Act of 2002, the Company's success in introducing and implementing its enterprise-wide information technology initiatives, including the corresponding impact on internal controls and reporting, the Company's success in the process of management testing, including the evaluation of results, and auditor attestation of internal controls (as required under the Sarbanes-Oxley Act of 2002), the effect of changes within the Company's organization, including the selection and development of the Company's management team and such other factors as are described in greater detail in the Company's filings with the Secur ities and Exchange Commission, including, without limitation, Exhibit 99-a to this 2004 Annual Report on Form 10-K and the Current Report on Form 8-K dated June 14, 2002.