<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
WARNER-LAMBERT COMPANY
.................................................................
(Name of Registrant as Specified In Its Charter)
.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
.................................................................
2) Aggregate number of securities to which transaction
applies:
.................................................................
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how it was
determined):
.................................................................
4) Proposed maximum aggregate value of transaction:
.................................................................
5) Total fee paid:
.................................................................
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
.................................................................
2) Form, Schedule or Registration Statement No.:
.................................................................
3) Filing Party:
.................................................................
4) Date Filed:
.................................................................
<PAGE>
NOTICE OF ANNUAL
MEETING AND PROXY
STATEMENT
-----------------
1995
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<TABLE>
<S> <C>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS 201 Tabor Road
APRIL 25, 1995 Morris Plains
- ----------------------------------------- New Jersey 07950
</TABLE>
The Annual Meeting of Stockholders of Warner-Lambert Company
('Warner-Lambert') will be held at the Parsippany Hilton Hotel, One Hilton
Court, Parsippany, New Jersey on Tuesday, April 25, 1995, at 10:30 a.m., Eastern
Daylight Saving Time, for the following purposes:
1 to elect a Board of twelve directors of Warner-Lambert to hold office for the
ensuing year;
2 to approve the appointment of independent accountants for 1995;
3 to consider and act upon a proposal of a stockholder relating to
Warner-Lambert's director compensation program; and
4 to transact such other business as may properly come before the meeting or any
adjournment or adjournments thereof.
The Board of Directors of Warner-Lambert has fixed the close of business on
February 24, 1995 as the record date for the determination of stockholders
entitled to receive notice of and to vote at the meeting. A list of the
stockholders entitled to vote will be open to the examination of stockholders at
Warner-Lambert Company, 35 Waterview Boulevard, Parsippany, New Jersey during
ordinary business hours from April 11, 1995 to the date of the meeting.
Whether or not you plan to attend the meeting in person, please vote, sign
and date the enclosed proxy and return it in the enclosed envelope, which
requires no postage if mailed in the United States, as soon as possible in order
that you may be represented at the meeting. If you attend the meeting and wish
to vote in person, your Proxy will not be used.
Admittance Cards are required for attendance at the meeting. If you plan to
attend the meeting, please mark the box provided on the Proxy, and an Admittance
Card will be sent to you. If you do not wish to send the Proxy, you may enclose
your own request in the envelope and receive an Admittance Card.
Warner-Lambert has approximately 43,000 holders of Common Stock, many of
whom own less than 100 shares. To ensure proper representation at the meeting,
it is important, however small your holdings, that you vote, sign, date and
return your Proxy promptly. Prompt return of your Proxy will reduce expense to
Warner-Lambert.
By Order of the Board of Directors
Rae G. Paltiel
Secretary
March 7, 1995
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<TABLE>
<S> <C>
PROXY STATEMENT FOR ANNUAL MEETING OF STOCKHOLDERS OF 201 Tabor Road
WARNER-LAMBERT COMPANY Morris Plains
- ----------------------------------------------------- New Jersey 07950
</TABLE>
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Warner-Lambert Company ('Warner-Lambert' or the 'Company')
of Proxies to be voted at the Annual Meeting of Stockholders to be held on
Tuesday, April 25, 1995, and any adjournment or adjournments thereof, for the
purposes set forth in the accompanying Notice of Meeting. The mailing of this
Proxy Statement and accompanying form of Proxy to stockholders will commence on
March 7, 1995.
GENERAL
The Board of Directors knows of no business which will be presented to the
meeting other than the matters referred to in the accompanying Notice of
Meeting. However, if any other matters are properly presented to the meeting, it
is intended that the persons named in the Proxy will vote the same and act in
accordance with their judgment. Shares represented by properly executed Proxies
received on behalf of Warner-Lambert will be voted at the meeting in the manner
specified therein. If no instructions are specified in a signed Proxy returned
to Warner-Lambert, the shares represented thereby will be voted in favor of the
election of the directors listed in the enclosed Proxy, in favor of the
appointment of Price Waterhouse LLP as independent accountants for 1995 and
against the stockholder proposal relating to Warner-Lambert's director
compensation program. Any Proxy may be revoked by the person giving it at any
time prior to being voted.
Only holders of Common Stock, $1 par value, whose names appear of record on
the books of Warner-Lambert at the close of business on February 24, 1995, are
entitled to vote at the meeting. At the close of business on that date there
were 134,642,159 shares of Common Stock outstanding. Each share of Common Stock
is entitled to one vote on each matter to be presented at the meeting.
For purposes of determining the number of votes cast on any matter, only
those cast for or withheld from a nominee for director or those cast for or
against the other matters to be voted upon are included. Abstentions and broker
non-votes are counted only for purposes of determining whether a quorum is
present.
ELECTION OF DIRECTORS
Pursuant to authority contained in the By-Laws, the Board of Directors has
established the number of directors to be elected at the 1995 Annual Meeting of
Stockholders at twelve. Accordingly, a slate of twelve directors, consisting of
the persons named below, is to be elected at the meeting to serve for the
ensuing year. Each nominee is a director at the present time. No nominee for
director is related to any other nominee or officer of Warner-Lambert or its
subsidiaries or other affiliates. All nominees were recommended to the
stockholders for election at the Annual Meeting by the Board of Directors at its
January meeting, based upon a prior recommendation to the Board by the
Nominating and Organization Committee. Each nominee will be elected a director
by a majority of the votes cast for such nominee.
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[PHOTO OF B. CHARLES AMES]
NOMINEES FOR ELECTION AS DIRECTORS
B. CHARLES AMES
AGE 69 FIRST ELECTED DIRECTOR: 1980
Partner, Clayton, Dubilier & Rice (Investment banking)
Mr. Ames is currently a partner at Clayton, Dubilier & Rice, an investment
banking firm. He served as Chairman and Chief Executive Officer of The Uniroyal
Goodrich Tire Company from 1988 to 1990. Previously, Mr. Ames served as Chairman
of the Board of Acme-Cleveland Corporation from April, 1987 to November, 1987,
Chairman of the Board and Chief Executive Officer from 1983 to 1987 and
President and Chief Executive Officer from 1981 to 1983. Mr. Ames was President
and Chief Executive Officer of Reliance Electric Company from 1976 to December,
1980. He holds a liberal arts degree from Illinois Wesleyan University and an
M.B.A. from Harvard University. Mr. Ames is a director of Diamond Shamrock R&M,
Inc., M.A. Hanna Company and The Progressive Corporation.
[PHOTO OF DONALD C. CLARK]
DONALD C. CLARK
AGE 63 FIRST ELECTED DIRECTOR: 1984
Chairman of the Board of Household International, Inc.
(Financial services)
Mr. Clark joined Household International, Inc. in 1955 and held various
executive positions before serving as President from 1977 to January, 1988, and
Chief Executive Officer from 1982 to September, 1994. Mr. Clark has served as
Chairman of the Board of Household International since 1984. Mr. Clark received
a degree in business administration from Clarkson University and an M.B.A. from
Northwestern University. He is a director of Household International, Inc.,
Ameritech Corporation, Schwitzer Inc., and Scotsman Industries Inc. He is also a
director of the Chicago Council on Foreign Relations, the Lyric Opera and the
Evanston Hospital Board. Mr. Clark is a member of the Mid America Club, The
Conference Board, The Business Roundtable and the Economic Club of Chicago. He
also serves as a National Trustee of Northwestern University.
[PHOTO OF LODEWIJK J. R. DE VINK]
LODEWIJK J. R. DE VINK
AGE 50 FIRST ELECTED DIRECTOR: 1991
President and Chief Operating Officer of Warner-Lambert
Mr. de Vink joined Warner-Lambert in 1988 as Vice President and President,
International Operations. In April, 1990 he was appointed Executive Vice
President and President, U.S. Operations, and in August, 1991 he was elected to
his present position as President and Chief Operating Officer. Previously, he
was employed by Schering-Plough Corporation in various management and executive
positions, advancing to Senior Vice President, Schering International, in 1984
and President, Schering International, in 1986. Mr. de Vink graduated from
Nijenrode, The Netherlands School of Business. He holds a B.B.A. from Washburn
University and an M.B.A. from American University. Mr. de Vink is Chairman-Elect
and a director of the Board
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of Pharmaceutical Research and Manufacturers of America (formerly the
Pharmaceutical Manufacturers Association). He is also a director of the National
Actors' Theater and Friends of Hassenfeld. Mr. de Vink is a Trustee of
Morristown Memorial Hospital and the National Foundation for Infectious
Diseases.
[PHOTO OF JOHN A. GEORGES]
JOHN A. GEORGES
AGE 64 FIRST ELECTED DIRECTOR: 1983
Chairman of the Board and Chief Executive Officer of International Paper
(Packaging, paper and forest products)
Mr. Georges joined International Paper in 1979 as Executive Vice President. He
was named Vice Chairman in 1980, President and Chief Operating Officer in 1981,
President and Chief Executive Officer in 1984, and Chairman of the Board and
Chief Executive Officer in 1985. Mr. Georges received a B.S. in chemical
engineering from the University of Illinois and holds an M.S. in business
administration from Drexel University. Mr. Georges is a director of
International Paper, AK Steel Corporation, Ryder System, Inc. and Scitex
Corporation. He is a Board member of and Trustee of the Public Policy Institute
of The Business Council of New York State and a member of The Business Council,
The Business Roundtable and the Trilateral Commission. Mr. Georges is also a
Trustee of Drexel University and a member of the Advisory Committee for Trade
Policy and Negotiations.
[PHOTO OF MELVIN R. GOODES]
MELVIN R. GOODES
AGE 59 FIRST ELECTED DIRECTOR: 1985
Chairman of the Board and Chief Executive Officer of Warner-Lambert
Mr. Goodes joined Warner-Lambert in 1965 and held various managerial and
executive positions, serving as President, Warner-Lambert Mexico from 1970 to
1976, President, Pan-American Zone, from 1976 to 1977, President,
Pan-American/Asian Zone, from 1977 to 1979 and President, Consumer Products
Division, from 1979 to 1983. Mr. Goodes was elected Vice President in 1977,
Senior Vice President in 1980, Executive Vice President and President, U.S.
Operations, in 1984 and President and Chief Operating Officer in 1985. In
August, 1991, he was elected to his current position as Chairman of the Board
and Chief Executive Officer. Mr. Goodes is a graduate of Queen's University,
Kingston, Ontario, Canada, of which he is currently a Trustee, and received an
M.B.A. from the University of Chicago. He is a director of Ameritech
Corporation, Chemical Bank, Chemical Banking Corporation and Unisys Corporation.
He is also a director of the International Executive Service Corps and the New
Jersey Performing Arts Center. Mr. Goodes is a member of the Industry Policy
Advisory Committee, The Conference Board and the Advisory Board of the American
Paralysis Association. He is a director and a member of the Executive Committee
of the National Council on Economic Education and a Trustee of the University of
Chicago Council of the Division of Biological Sciences.
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[PHOTO OF WILLIAM H. GRAY III]
WILLIAM H. GRAY III
AGE 53 FIRST ELECTED DIRECTOR: 1991
President of the United Negro College Fund
Mr. Gray was appointed President of the United Negro College Fund in September,
1991. He has also served as the Senior Minister of the Bright Hope Baptist
Church since 1963. From 1968 through 1972, Mr. Gray was a lecturer at Jersey
City State College, Rutgers University and Montclair State College. He was an
Assistant Professor and a director of St. Peter's College from 1970 to 1974. Mr.
Gray served as a Congressman from the Second District of Pennsylvania from 1979
to 1991. During his tenure, he was Chairman of the House Budget Committee, a
member of the Appropriations Committee, Chairman of the House Democratic Caucus
and Majority Whip. Mr. Gray received a B.A. from Franklin and Marshall College,
a Master of Theology from Drew Theological Seminary and a Master of Theology
from Princeton Theological Seminary. He is a director of Chase Manhattan
Corporation, Lotus Development Corp., Municipal Bond Investors Assurance
Corporation, The Prudential Insurance Company of America, Rockwell International
Corp., Union Pacific Corporation and Westinghouse Electric Corporation.
[PHOTO OF WILLIAM R. HOWELL]
WILLIAM R. HOWELL
AGE 59 FIRST ELECTED DIRECTOR: 1983
Chairman of the Board of J.C. Penney Company, Inc. (Retailing)
Mr. Howell joined J.C. Penney Company, Inc. in 1958. After holding various
management positions, he became Western Regional Vice President in 1976 and a
Senior Vice President and Director of Merchandising and Marketing in 1979. Mr.
Howell was elected Executive Vice President and Board member in 1981, Vice
Chairman of the Board in 1982 and Chief Executive Officer in 1983. Mr. Howell
has served as Chairman of the Board of J.C. Penney since 1983. Mr. Howell holds
a degree in business management from the University of Oklahoma. Mr. Howell is a
director of J.C. Penney Company, Inc., Bankers Trust New York Corporation,
Bankers Trust Company, Exxon Corporation, and Halliburton Company. He is a
Trustee of the National Urban League and a member of the Board of Governors of
United Way of America and The Business Council.
[PHOTO OF LASALLE D. LEFFALL, JR., M.D.]
LASALLE D. LEFFALL, JR., M.D.
AGE 64 FIRST ELECTED DIRECTOR: 1988
Charles R. Drew Professor and Chairman, Department of Surgery, Howard
University College of Medicine; Professorial Lecturer in Surgery, Georgetown
University
Dr. Leffall has served as Professor and Chairman of the Department of Surgery at
Howard University College of Medicine since 1970. In March, 1992, he was named
the Charles R. Drew Professor of Surgery. He is also a Professorial Lecturer in
Surgery at Georgetown University. He received a B.S. from Florida A&M and an
M.D. from Howard University. Dr. Leffall is a director of Mutual of America and
Tyco Toys, Inc. and a consultant to the National Cancer Institute. In
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addition, he is a Diplomate of the American Board of Surgery and a Fellow of the
American College of Surgeons and of the American College of Gastroenterology.
Dr. Leffall is also a member of the National Urban League, the National
Association for Advancement of Colored People, the Young Men's Christian
Association, Cosmos Club and Greater Washington Research Center.
[PHOTO OF PATRICIA SHONTZ LONGE, Ph.D.]
PATRICIA SHONTZ LONGE, Ph.D.
AGE 61 FIRST ELECTED DIRECTOR: 1975
Economist; Senior Partner of The Longe Company (Economic consulting and
investments)
Dr. Longe received a B.S. and an M.B.A. from the University of Detroit and a
Ph.D. in economics from Wayne State University. Dr. Longe has been an economist
since 1963. She served as Professor of Business Administration at the University
of Michigan from 1973 to 1986 and as Adjunct Professor of Business
Administration from 1986 to 1988. Dr. Longe has been a Senior Partner of The
Longe Company, an economic consulting and investment firm, since 1981. She is a
director of Comerica Incorporated, Comerica Bank & Trust, F.S.B., The Detroit
Edison Company, Jacobson Stores, Inc., The Kroger Co. and The Immokalee
Foundation, Inc.
[PHOTO OF LAWRENCE G. RAWL]
LAWRENCE G. RAWL
AGE 66 FIRST ELECTED DIRECTOR: 1986
Retired Chairman of the Board and Chief Executive Officer of Exxon Corporation
(Crude oil, natural gas and petroleum products)
Mr. Rawl joined Exxon Corporation in 1952 and held various positions in domestic
operations and corporate headquarters activities. In 1973, he became Senior Vice
President of Exxon Company, U.S.A. and in 1976, he became Executive Vice
President. He was elected Executive Vice President of Esso Europe Inc. in 1978,
Senior Vice President of Exxon Corporation in 1980, President in 1985 and
Chairman of the Board and Chief Executive Officer in 1987, which position he
held until his retirement in 1993. Mr. Rawl received a B.S. in petroleum
engineering from the University of Oklahoma. He is a director of Champion
International Corporation, Texas Commerce Bancshares, Inc. and the Texas Medical
Center. He is a member of The University Cancer Foundation Board of Visitors of
Texas MD Anderson Cancer Center, the University of Oklahoma Foundation and the
Dallas County Salvation Army Advisory Board.
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[PHOTO OF MICHAEL I. SOVERN]
MICHAEL I. SOVERN
AGE 63 FIRST ELECTED DIRECTOR: 1993
President Emeritus and Chancellor Kent Professor of Law, Columbia University
Mr. Sovern joined the faculty of Columbia University in 1957, became a full
professor in 1960 and has been Chancellor Kent Professor of Law since 1977. He
served as Columbia Law School's seventh Dean from 1970 to 1979 and as Executive
Vice President and Provost of the University from 1979 to 1980. Mr. Sovern
served as President of Columbia University from 1980 to 1993, when he became
President Emeritus. He received his A.B. degree from Columbia College and LL.B.
from Columbia University Law School. Mr. Sovern is a director of American
Telephone and Telegraph Company, Chemical Bank, Chemical Banking Corporation,
the Greater New York Insurance Group and Orion Pictures Corporation. He is also
Chairman of the Japan Society and of the American Academy in Rome, and serves on
the boards of the Asian Cultural Council, the Schubert Foundation and
Organization, Channel Thirteen, the NAACP Legal Defense and Education Fund
and the Henry J. Kaiser Family Foundation. Mr. Sovern is also an advisor to the
Board of Sequa Corporation.
[PHOTO OF JOSEPH D. WILLIAMS]
JOSEPH D. WILLIAMS
AGE 68 FIRST ELECTED DIRECTOR: 1973
Consultant; Retired Chairman of the Board and Chief Executive Officer of
Warner-Lambert
Mr. Williams joined Parke, Davis & Company in 1950 and served in various sales,
marketing and executive positions before becoming President and Chief Executive
Officer of Parke, Davis in 1973. In 1976, he was elected Executive Vice
President and President, Pharmaceutical Group, of Warner-Lambert. Mr. Williams
was elected President of Warner-Lambert in 1979, Chief Operating Officer in 1980
and Chairman of the Board and Chief Executive Officer in 1985, which position he
retained until his retirement in 1991. Mr. Williams holds a B.S. in chemistry
and pharmacy from the University of Nebraska College of Pharmacy. He is a
director of American Telephone and Telegraph Company, Exxon Corporation, J.C.
Penney Company, Inc., Thrift Drug, Inc. and the Wyatt Company. Mr. Williams is
also a director of Rockefeller Financial Services, Inc., Rockefeller Company,
Inc., Therapeutic Antibodies Inc., Project Hope and the United Negro College
Fund. He is also Chairman of the New Jersey Commission on Higher Education.
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SECURITY OWNERSHIP OF OFFICERS AND DIRECTORS
The following table sets forth information, as of February 10, 1995, regarding
beneficial ownership of Warner-Lambert Common Stock by each director and
nominee, each of the executive officers named in the Summary Compensation Table
and all directors and executive officers as a group:
<TABLE>
<CAPTION>
NUMBER OF COMMON
SHARES AND
NAME SHARE EQUIVALENTS(1)(2)
- -------------------------------------------------------------------------- ----------------------
<S> <C>
B. Charles Ames 28,234
Donald C. Clark 16,860
Lodewijk J. R. de Vink 142,535(3)
John A. Georges 4,000
Melvin R. Goodes 181,435(3)
William H. Gray III 2,329
William R. Howell 2,400
Ernest J. Larini 36,707(3)
LaSalle D. Leffall, Jr. 4,924
Patricia Shontz Longe 5,000
Lawrence G. Rawl 15,944
Paul S. Russell
(Retiring 4/95) 19,655
Joseph E. Smith 124,300(3)
Michael I. Sovern 2,000
John F. Walsh 140,925(3)
Joseph D. Williams 23,011
All executive officers and directors as a group (33) 1,464,145(3)
</TABLE>
- --------------------------------------------------------------------------------
(1) As of February 10, 1995, all executive officers and directors as a group
owned approximately 1.09% of the outstanding shares of Common Stock.
(2) Each of the above persons has (or will have upon the exercise of options
exercisable within sixty days) sole voting and investment power with respect to
all shares shown as beneficially owned by such person, except for an aggregate
of 22,000 shares granted to the non-employee directors named above, pursuant to
the Restricted Stock Plan for Directors of Warner-Lambert Company, as to which
each director has the power to direct the vote of the shares granted to such
person. In addition, the shareholdings listed above for Mr. Ames, Mr. Clark, Mr.
Gray, Dr. Leffall, Mr. Rawl and Dr. Russell (who, in accordance with
Warner-Lambert's By-Laws, will retire from the Board in April, 1995) include
shares of Common Stock equivalents in the amounts of 15,734, 12,618, 225, 2,606,
9,823 and 17,655, respectively, held pursuant to Warner-Lambert's deferred
compensation arrangements for non-employee directors; and the shareholdings
listed above for Mr. de Vink, Mr. Goodes, Mr. Larini, Mr. Smith and Mr. Walsh
include shares of Common Stock and Common Stock equivalents in the amounts of
280, 88,209, 2,508, 247 and 3,639, respectively, held pursuant to
Warner-Lambert's benefit plans.
(3) Includes shares subject to options or rights granted pursuant to the
Company's stock plans exercisable within sixty days after February 10, 1995,
held by Mr. de Vink, Mr. Goodes, Mr. Larini, Mr. Smith, Mr. Walsh and all
executive officers and directors as a group, in the amounts of 136,124 shares,
75,283 shares, 32,351 shares, 117,424 shares, 126,187 shares and 1,147,545
shares, respectively.
Warner-Lambert believes that stock ownership by its executive officers is
important to promote an identification of the interests of Management with
Warner-Lambert's stockholders. Accordingly, in 1994, Warner-Lambert established
stock ownership goals for its key members of Management with the intent that
each individual invest a certain dollar amount in shares of Warner-Lambert
Common Stock equal to a multiple (by position level) of the salary for such
individual. It is expected that each officer will fully achieve the goal by the
end of an eight-year period. For purposes of this program, the amount of shares
of Common Stock held by the officer includes shares held directly and
indirectly, shares and
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share equivalents held under Warner-Lambert's benefit plans, 50% of vested,
unexercised stock options and 50% of restricted stock.
Section 16(a) of the Securities Exchange Act of 1934 requires
Warner-Lambert's officers and directors, and persons who own more than ten
percent of a registered class of Warner-Lambert's equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission and the New York Stock Exchange. Warner-Lambert believes that during
1994 all Section 16(a) filing requirements applicable to its officers and
directors were complied with, except that there was inadvertently omitted from a
Form 5 filing on behalf of Mr. Lawrence G. Rawl, a director of Warner-Lambert,
the acquisition of 51 shares of Common Stock pursuant to the reinvestment of
cash dividends through the Company's Dividend Reinvestment Program. The Form 5
filing has been amended accordingly.
SECURITY OWNERSHIP OF WARNER-LAMBERT
The following table sets forth information with respect to the persons known to
Warner-Lambert to own beneficially more than 5% of Warner-Lambert Common Stock,
as of December 31, 1994:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME AND ADDRESS OF BENEFICIAL PERCENT
BENEFICIAL OWNER OWNERSHIP OF CLASS
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
The Capital Group Companies, Inc.
333 South Hope Street
Los Angeles, California 90071 8,039,800(1) 5.98%
FMR Corp.
82 Devonshire Street
Boston, Massachusetts 02109 7,337,637(2) 5.45%
- ------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) As reported in Amendment No. 1 to Schedule 13G filed with the Securities and
Exchange Commission (the 'SEC') by The Capital Group Companies, Inc. ('CG'),
Capital Guardian Trust Company and Capital Research and Management Company,
operating subsidiaries of CG, exercised, as of December 31, 1994, investment
discretion with respect to 800 and 8,039,000 shares, respectively. CG has
advised that with respect to all of such shares, its subsidiaries act as
investment managers for various institutional investors and that it disclaims
beneficial interest in such shares.
(2) As reported in Schedule 13G filed with the SEC by FMR Corp. ('FMR'), FMR,
through its subsidiaries and affiliates, exercised, as of December 31, 1994,
sole voting power with respect to 1,192,269 of such shares and sole dispositive
power with respect to 7,337,637 of such shares. FMR has advised that with
respect to all of such shares, its subsidiaries and affiliates act as investment
managers for various institutional accounts.
COMMITTEES OF THE BOARD
Warner-Lambert has an Executive Committee, an Audit Committee, a Compensation
Committee, a Nominating and Organization Committee, a Retirement and Savings
Plan Committee (U.S.), a Corporate Public Policy Committee and a Science and
Technology Committee of the Board of Directors. The members of the Executive
Committee are Mr. Joseph D. Williams (Chairman), Mr. Lodewijk J. R. de Vink, Mr.
John A. Georges, Mr. Melvin R. Goodes, Dr. Patricia Shontz Longe and Mr.
Lawrence G. Rawl. This Committee, which did not meet during 1994, has the
authority to exercise all of the powers of the Board of Directors except that
this Committee may not (1) approve acquisitions, capital expenditure requests or
divestitures involving more than $20,000,000, (2) amend Warner-Lambert's
Certificate of Incorporation or By-Laws, (3) declare a dividend or (4) authorize
the issuance of stock of Warner-Lambert. The Executive Committee also has the
authority to review
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Warner-Lambert's financial policies and procedures and make recommendations to
the Board of Directors with respect to dividend policy, corporate financing and
related matters.
The members of the Audit Committee are Mr. B. Charles Ames (Chairman), Mr.
John A. Georges, Mr. William H. Gray III, Mr. Lawrence G. Rawl and Mr. Michael
I. Sovern. This Committee, which met four times during 1994, is responsible for
meeting with Warner-Lambert's independent accountants to review the proposed
scope of the annual audit of Warner-Lambert's financial statements; reviewing
the findings of the independent accountants upon completion of the annual audit;
reporting to the Board of Directors with respect to its meetings with the
independent accountants; and supervising the implementation of Warner-Lambert's
Management Integrity Policy and reporting annually to the Board of Directors
with respect thereto.
The members of the Compensation Committee are Mr. Donald C. Clark
(Chairman), Mr. John A. Georges, Mr. William R. Howell, and Mr. Lawrence G.
Rawl. This Committee, which met six times during 1994, is responsible for
administering the Incentive Compensation Plan, the Supplemental Pension Income
Plan and Warner-Lambert's stock plans, and has limited authority to adopt
amendments to the foregoing plans. This Committee is also responsible for
recommending to the Board of Directors the salaries to be paid to the Chairman
and the President of Warner-Lambert, and reviewing and approving the salaries to
be paid to certain other officers of Warner-Lambert.
The members of the Nominating and Organization Committee are Dr. LaSalle D.
Leffall, Jr. (Chairman), Mr. B. Charles Ames, Mr. Donald C. Clark, Mr. William
H. Gray III, Dr. Paul S. Russell and Mr. Joseph D. Williams. This Committee,
which met two times in 1994, is responsible for recommending to the Board of
Directors the names of qualified persons to be nominated for election or
re-election as directors of Warner-Lambert, the membership and Chairman of each
Board Committee and the persons to be elected or re-elected Chairman of the
Board, Chief Executive Officer, President and Chief Operating Officer of Warner-
Lambert. The Committee will consider suggestions for Board membership submitted
by stockholders in accordance with the notice provisions and procedures set
forth in Warner-Lambert's By-Laws. Proposals for the nomination of directors
must include the biographical information required by Warner-Lambert's By-Laws,
together with the written consent of the proposed nominee to so serve, if
elected. This Committee is also responsible for administering the Restricted
Stock Plan for Directors of Warner-Lambert Company. Mr. Williams does not act
upon any matters for which he would not qualify as a 'disinterested person' as
defined under Rule 16b-3 promulgated pursuant to Section 16 of the Securities
Exchange Act of 1934.
The members of the Retirement and Savings Plan Committee (U.S.) are Dr.
Patricia Shontz Longe (Chairman), Mr. Donald C. Clark, Mr. John A. Georges, Mr.
William R. Howell and Mr. Michael I. Sovern. This Committee, which met three
times during 1994, has limited authority to adopt amendments to the domestic
retirement and savings plans of Warner-Lambert and its domestic subsidiaries
(collectively, the 'Plans'), including the Warner-Lambert Retirement Plan, the
Warner-Lambert Savings and Stock Plan, the Warner-Lambert Excess Savings Plan
and the Warner-Lambert Long Term Disability Benefits Plan, and has
responsibility with respect to such Plans to monitor and report on the selection
and termination of trustees and investment managers and on their individual
investment activity and performance, to review the reports of the independent
accountants with respect to the Plans, to approve pensions for individual
employees which are separate from any benefit plan
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and to implement the overall asset allocation guidelines, as established by the
Board of Directors.
The members of the Corporate Public Policy Committee are Mr. William R.
Howell (Chairman), Mr. Donald C. Clark, Dr. LaSalle D. Leffall, Jr., Dr.
Patricia Shontz Longe, Dr. Paul S. Russell and Mr. Joseph D. Williams. This
Committee, which met three times in 1994, is responsible for reviewing periodic
reports on the contribution activities of Warner-Lambert, reports on equal
employment opportunity and related matters and reports on public affairs
programs of Warner-Lambert and issues of social concern, and for making
recommendations to the Board of Directors in such areas.
The members of the Science and Technology Committee are Dr. Paul S. Russell
(Chairman), Mr. B. Charles Ames, Mr. William H. Gray III and Dr. LaSalle D.
Leffall, Jr. This Committee, which met three times in 1994, is responsible for
receiving and reviewing periodic reports on technological developments and
activities, reports on new and enhanced manufacturing technologies and
productivity improvements and reports on employee safety and environmental
protection, and for making recommendations to the Board of Directors in specific
areas of science and technology.
The Warner-Lambert Board of Directors met ten times during 1994. Each
director of Warner-Lambert standing for re-election who was a director during
1994 attended at least 83% of the total meetings of the Board of Directors and
the Committees of the Board on which he or she served. The average attendance
rate for 1994 for all directors standing for re-election was approximately 97%.
DIRECTORS' COMPENSATION
All non-employee directors of Warner-Lambert receive an annual fee of $35,000
and a fee of $1,000 for attendance at each meeting of the Board or Committee of
the Board of Directors, as well as for attendance at or participation in special
meetings and other Board-related activities, and are reimbursed for expenses
incurred in connection therewith. In addition, each member of the Executive
Committee who is not an employee receives an annual fee of $4,000 in lieu of a
fee for attendance at the first four meetings of the Executive Committee.
Directors may elect to defer receipt of their fees.
The Warner-Lambert Directors' Retirement Plan provides that each director
who (1) is not an officer or employee of Warner-Lambert, (2) has completed a
total of five years of membership on the Board of Directors and (3) retires from
the Board of Directors at age 70 will receive an annual retirement benefit for
life equal to the annual directors' fee in effect prior to the director's
retirement, reduced by the amount of any benefit payable to such director from
the Warner-Lambert Retirement Plan or the Warner-Lambert Supplemental Pension
Income Plan. In the event of a change in control of Warner-Lambert (as defined
in such plan), each director who has completed or shall complete five years of
membership on the Board of Directors shall be entitled to receive a retirement
benefit commencing at age 70. Non-employee directors are also eligible to
participate in Warner-Lambert's Group Life Insurance, Medical, Dental and
Accidental Death and Dismemberment Plans.
Warner-Lambert has consulting arrangements with two non-employee directors
who are standing for re-election to provide services to Warner-Lambert in
specialized fields. Non-employee director/consultants may elect to defer receipt
of any amounts to be paid in connection with their consulting services. For
1994, amounts paid to or deferred for the
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benefit of Mr. B. Charles Ames and Mr. Joseph D. Williams, pursuant to such
consulting arrangements, were $10,000 and $200,000, respectively.
The provisions of the Warner-Lambert Company 1992 Stock Plan relating to
deferred compensation for directors permit non-employee directors to elect to
defer their directors' annual fees, meeting attendance fees and consulting fees,
and such deferred amounts are credited to an account which accrues interest
annually or to a Warner-Lambert Common Stock equivalent account which is
credited as of the day the deferred fees would have been payable with stock
credits equal to the number of shares of Common Stock that could have been
purchased with the amount of such deferred fees. The provisions of the 1992
Stock Plan relating to directors' deferred compensation provide that all amounts
which participating directors had previously elected to defer are payable
immediately following a change in control of Warner-Lambert (as defined in such
plan).
Pursuant to the Restricted Stock Plan for Directors of Warner-Lambert
Company, each non-employee director of Warner-Lambert receives a grant of 2,000
shares of Common Stock, subject to certain restrictions. The director is not
entitled to delivery of the share certificate and the shares are subject to
transfer restrictions for a period from the date of grant until the earliest to
occur of certain specified events. If the director remains a member of the Board
for the entire period during which the restrictions apply, the restrictions will
lapse with respect to one-tenth of the shares of Common Stock for each full year
of service as a director. In the event of a change in control of Warner-Lambert
(as defined in such plan), the Restricted Stock Plan provides that the directors
will receive the full value of the shares previously granted by delivery of a
cash payment in lieu thereof. Subject to the foregoing, the director has the
rights and privileges of a stockholder as to such Common Stock, including the
right to receive dividends and the right to vote the shares of Common Stock.
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SUMMARY COMPENSATION TABLE
The following table provides a summary of cash and non-cash compensation for
each of the last three completed fiscal years ended December 31, 1994, 1993 and
1992 with respect to Warner-Lambert's Chief Executive Officer and the other four
most highly compensated executive officers of the Company:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG - TERM COMPENSATION
--------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
-------------------- ---------------------- --------------
a b c d e f g h i
- ----------------------------------------------------------------------------------------------------------------------------
SECURITIES
RESTRICTED UNDERLYING
OTHER ANNUAL STOCK OPTIONS/ LTIP ALL OTHER
NAME AND PRINCIPAL SALARY BONUS COMPENSATION AWARDS SARS PAYOUTS(2) COMPENSATION(3)
POSITION YEAR ($) ($) ($) ($) (#) ($) ($)
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Melvin R. Goodes
Chairman of the Board 1994 $866,250 $820,000 -- -- 45,000 $176,375 $58,493
and Chief Executive 1993 820,000 586,000 -- -- 45,000 255,000 49,453
Officer 1992 765,000 800,000 -- -- 230,750(1) 255,000 29,924
Lodewijk J.R. de Vink(4) 1994 573,500 543,000 -- -- 26,750 124,500 17,866
President and Chief 1993 542,667 413,000 -- -- 26,750 150,000 10,805
Operating Officer 1992 495,667 500,000 -- -- 116,450(1) 150,000 6,819
John F. Walsh(5)
Executive Vice
President; President, 1994 398,333 320,000 -- -- 21,100 103,750 20,180
Consumer Healthcare 1993 377,500 320,000 -- -- 19,250 120,000 24,646
Sector 1992 337,750 285,000 -- -- 85,150(1) 120,000 13,727
Joseph E. Smith(6) 1994 404,000 169,000 -- -- 12,500 103,750 46,586
Vice President, External 1993 402,083 158,200 -- -- 19,250 150,000 47,740
Relations 1992 369,500 285,000 -- -- 67,750(1) 141,600 36,599
Ernest J. Larini(7) 1994 300,967 243,000 -- -- 17,500 51,875 10,380
Vice President and Chief 1993 278,400 197,000 -- -- 15,500 60,000 9,951
Financial Officer 1992 228,167 170,000 -- -- 64,500(1) 60,000 9,266
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) In 1992, the Compensation Committee awarded a special stock option to a
select group of senior management as incentive to take prudent risks to maximize
shareholder value and to further link their success to corporate performance.
The exercise price of 50% of this option is equal to the market price on the
date of grant. The exercise price of the remaining 50% of such grant is indexed
to the S&P 500 for the first four years of the grant. Thus, with respect to such
portion of the grant, the market price of Warner-Lambert stock must exceed the
growth of the S&P 500 in order for the individual recipient's stock option to
have any value during the first four years of its term. These stock options vest
at a rate of 10% in 1996, 20% in 1997, 30% in 1998 and 40% in 1999, with each
option expiring in 2002.
(2) Long-term cash performance bonuses provide for cash dollar awards contingent
on the attainment of certain earnings per share ('EPS') performance levels
during the three-year period subsequent to the grant and pay out in the year
following such performance period. In January 1994, the method of payment for
long-term bonus awards was modified. As a result, the long-term bonuses for the
three-year performance period ended December 31, 1994 are payable following such
period in part based on Warner-Lambert's achievement of a specific cumulative
average EPS growth rate and in part based upon Warner-Lambert's achievement of a
certain cumulative average EPS growth rate, compared to the median EPS growth of
a select group of companies in the industries in which Warner-Lambert competes.
The amounts shown in column (h) above represent the long-term bonuses paid in
1994, 1993 and 1992, respectively, to the executive officers named in the
Summary Compensation Table for each of the three-year performance periods ending
prior to such years. The long-term bonus payable for the performance period
1992-1994 will be determined following the appropriate calculations to determine
EPS growth from ongoing operations and will be reported following actual payout,
which is scheduled to take place in May, 1995.
(3) All Other Compensation consists of the following: (i) annual Company
contributions to the Savings and Stock Plan and the Excess Savings Plan for
1994, 1993 and 1992, as follows: Mr. Goodes $47,760, $29,266 and $29,924; Mr. de
Vink $14,849, $7,255 and $6,819; Mr. Walsh $13,280, $11,232 and $13,727; Mr.
Smith $14,810, $11,368 and $9,124;
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and Mr. Larini $8,123, $6,289 and $9,266, respectively; and (ii) the
above-market interest on deferred annual bonuses for 1994, 1993 and 1992, as
follows: Mr. Goodes: $10,733, $20,187 and $0; Mr. de Vink $3,017, $3,550 and $0;
Mr. Walsh $6,900, $13,414 and $0; Mr. Smith $4,301, $8,897 and $0; and Mr.
Larini $2,257, $3,662 and $0, respectively. The annual bonus was payable for
such years, but deferred at the election of the named executive officer, in
accordance with the provisions of the Warner-Lambert Incentive Compensation
Plan. According to the terms of such Plan, such deferred bonuses accrue interest
that is automatically credited to the officer's account and is not currently
paid or payable.
With respect to Mr. Smith, All Other Compensation also includes the amount of
interest Mr. Smith would have been required to pay had his $250,000 loan from
the Company (described on page 20) been made at the market interest rate in
effect at the time the loan was consummated for 1994, 1993 and 1992, as follows:
$27,475, $27,475 and $27,475, respectively.
(4) Effective January 1, 1994, Mr. de Vink assumed responsibility for
Warner-Lambert's Pharmaceutical Sector.
(5) From January 1, 1992 through November, 1994, Mr. Walsh served as President,
Consumer Products Sector. Effective December 1, 1994, Mr. Walsh was named
President, Consumer Healthcare Sector.
(6) Mr. Smith served as President, Pharmaceutical Sector, from January 1, 1992
through 1993. Effective January 1, 1994, Mr. Smith was named Vice President,
External Relations.
(7) Mr. Larini served as Vice President and Controller until June 1992 and Vice
President, Financial Administration, until November 1992. Effective November 1,
1992, Mr. Larini was named Vice President and Chief Financial Officer.
CHIEF EXECUTIVE OFFICER'S AND PRESIDENT'S EMPLOYMENT AGREEMENTS
In 1985, Warner-Lambert entered into an employment agreement with Mr. Goodes. In
1991, Warner-Lambert entered into an employment agreement with Mr. de Vink. The
agreement with Mr. Goodes, which was amended in 1991, terminates May 1, 2000,
and the agreement with Mr. de Vink provides for an initial term of five years,
which term will be automatically extended for an additional year at the end of
each year of the term until Mr. de Vink's retirement. The agreements provide for
minimum annual salaries which may be increased annually based upon the average
salary increase of those officers of Warner-Lambert whose names appear in the
Annual Report. Mr. Goodes' and Mr. de Vink's respective salaries are generally
reviewed by the Compensation Committee in January of each year. Pursuant to the
terms of the agreements, Mr. Goodes and Mr. de Vink are also entitled to
participate in the Incentive Compensation Plan as well as the other compensation
and benefit programs available to officers of Warner-Lambert at their respective
levels.
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OPTION/SAR GRANT TABLE
The following table sets forth information concerning grants of stock options
and stock appreciation rights during 1994 to the Company's Chief Executive
Officer and the other four most highly compensated executive officers:
OPTION/SAR GRANTS IN 1994
<TABLE>
<CAPTION>
GRANT DATE
INDIVIDUAL GRANTS PRESENT VALUE(1)
------------------------------------------------------------ --------------
a b c d e f
- -----------------------------------------------------------------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION
NAME GRANTED (#)(2) 1994 ($/SH) DATE
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Melvin R. Goodes 45,000 2.79% $73.5625 10/24/04 $1,134,540
Lodewijk J. R. de Vink 26,750 1.66% 73.5625 10/24/04 674,421
John F. Walsh 21,100 1.31% 73.5625 10/24/04 531,973
Joseph E. Smith 12,500 .78% 73.5625 10/24/04 315,150
Ernest J. Larini 17,500 1.09% 73.5625 10/24/04 441,210
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Present value determinations were made using a Black-Scholes option pricing
model based on the following assumptions: expected volatility is based on a
five-year average of weekly stock prices for the period 1990-1994; risk-free
rate of return is based on the current ten-year Treasury note rate; dividend
yield is based on the dividends paid on Warner-Lambert's Common Stock for the
five-year period 1990-1994; and options are held for the full ten-year term. The
actual value an executive officer receives is dependent on future stock market
conditions, and there can be no assurance that the amounts reflected in column
(f) of the Option/SAR Grants Table will actually be realized. No gain to the
executive officer is possible without an appreciation in stock value which will
benefit all stockholders commensurately.
(2) Stock options entitle the holder to purchase shares of Common Stock at a
price which is equal to the fair market value per share for such stock on the
date the stock option was granted. Payment of this price is made in cash or,
with the consent of the Compensation Committee, in whole or in part, in Common
Stock or other consideration. Stock options become exercisable over a four-year
period (beginning one year after the date of grant) in four equal installments.
No stock option may be exercised after the expiration of ten years from the date
of grant. In the event of a change in control of Warner-Lambert (as defined in
the stock option plans), (i) the ability to exercise stock options is
accelerated, (ii) amounts payable upon exercise of stock appreciation rights
will be determined by reference, among other things, to the price pursuant to
which the change in control was effected, (iii) amounts payable upon the
exercise of stock appreciation rights will be in the form of cash and (iv)
limited stock appreciation rights are provided to the grantees of stock options.
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OPTION/SAR EXERCISES AND YEAR-END VALUE TABLE
The following table sets forth individual exercises of stock options and stock
appreciation rights ('SARs') during 1994 by the Company's Chief Executive
Officer and the other four most highly compensated executive officers and
provides information related to stock option and SAR values:
AGGREGATED OPTION/SAR EXERCISES IN 1994
AND YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
a b c d e
- -------------------------------------------------------------------------------------------------
NUMBER OF VALUE OF
SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS/SARS
OPTIONS/ AT YEAR-END ($)
SHARES SARS AT ($77.125 PER
ACQUIRED ON YEAR-END (#) SHARE)
EXERCISE VALUE EXERCISABLE/ EXERCISABLE/
NAME (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
- -------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Melvin R. Goodes 40,000 $2,377,500 188,133/ $ 6,362,148/
286,625 1,800,840
Lodewijk J. R. de Vink 0 0 136,124/ 3,588,543/
200,826 2,791,261
John F. Walsh 12,500 647,063 126,187/ 4,234,193/
114,063 718,811
Joseph E. Smith 0 0 94,924/ 2,320,728/
155,501 3,146,516
Ernest J. Larini 500 28,500 33,351/ 603,620/
88,025 548,577
- -------------------------------------------------------------------------------------------------
</TABLE>
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LONG-TERM INCENTIVE PLAN AWARDS TABLE
The following table indicates long-term incentive awards granted in 1994 to the
Company's Chief Executive Officer and the other four most highly compensated
executive officers:
LONG-TERM INCENTIVE PLAN-AWARDS IN 1994(1)
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS UNDER
NON-STOCK PRICE BASED PLANS
----------------------------------------------
a b c d e f g
-----------------------------------------------------------------------------------------------------------
PERFORMANCE
NUMBER OF OR OTHER
SHARES, PERIOD
UNITS OR UNTIL BELOW
OTHER MATURATION THRESHOLD THRESHOLD TARGET MAXIMUM
NAME RIGHTS (#)(1) OR PAYOUT ($) ($) ($) ($)
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Melvin R. Goodes $220,000 3 Years 0 $110,000 $220,000 $440,000
Lodewijk J. R. de Vink $170,000 3 Years 0 85,000 170,000 340,000
John F. Walsh $120,000 3 Years 0 60,000 120,000 240,000
Joseph E. Smith $ 80,000 3 Years 0 40,000 80,000 160,000
Ernest J. Larini $100,000 3 Years 0 50,000 100,000 200,000
- --------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The Warner-Lambert Incentive Compensation Plan provides for dollar target
awards, rather than shares, units or other rights. The dollar target awards
shown above in column (b) reflect the potential value of long-term incentive
awards granted in 1994 to the named executives under the Warner-Lambert
Incentive Compensation Plan at a target level of 100%. Such awards are
contingent upon the attainment of certain earnings per share ('EPS') performance
levels during the three-year period subsequent to grant (i.e., 1994-1996) and
become payable in the year following the end of this three-year performance
period. In January 1994, each of the executive officers named in the above Table
received a targeted long-term grant, as set forth in column (b) above, based on
the individual's position level and competitive compensation trends. The awards
described in the Table are payable, based upon Warner-Lambert's achievement of a
certain cumulative average EPS growth rate, compared to the median EPS growth of
a select group of companies in the industries in which Warner-Lambert competes.
Awards are payable at values ranging from zero to 200% (maximum level) of target
levels. If minimum EPS performance levels are not attained over the three-year
period, such long-term incentive awards will not be paid. In addition, the
Compensation Committee has discretion to lower the amount of the payouts under
appropriate circumstances. Awards may become non-contingent on a pro rata basis
following a change in control of Warner-Lambert (as defined).
RETIREMENT BENEFITS
The following table sets forth the estimated aggregated annual benefits payable
in the form of a straight life annuity by Warner-Lambert upon retirement at age
65 (exclusive of retirement benefits from Social Security) after a specified
number of years of service, pursuant to the Warner-Lambert Company Retirement
Plan (the 'Retirement Plan') and the Warner-Lambert Supplemental Pension Income
Plan (the 'Supplemental Plan'). In the event of early retirement, the following
amounts will be reduced by the annual retirement credits that would otherwise
have been earned to normal retirement and further reduced in accordance with the
early retirement reduction factors then in effect under the Retirement Plan and,
where applicable, the Supplemental Plan. For purposes of determining the pension
base, earnings of all executive officers included in the Summary Compensation
Table on page 13 approximate the aggregate of amounts shown in columns (c) and
(d) of such Summary Compensation Table.
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PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF SERVICE
- ------------------------------------------------------------------------------------------------------
REMUNERATION 15 20 25 30 35 40
- -------------- -------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
$ 500,000 $211,040 $ 267,520 $ 268,000 $ 268,480 $ 272,053 $ 310,436
600,000 255,840 323,520 324,000 324,480 326,453 372,436
700,000 300,640 379,520 380,000 380,480 380,960 434,436
800,000 345,440 435,520 436,000 436,480 436,960 496,436
900,000 390,240 491,520 492,000 492,480 492,960 558,436
1,000,000 435,040 547,520 548,000 548,480 548,960 620,436
1,100,000 479,840 603,520 604,000 604,480 604,960 682,436
1,200,000 524,640 659,520 660,000 660,480 660,960 744,436
1,300,000 569,440 715,520 716,000 716,480 716,960 806,436
1,400,000 614,240 771,520 772,000 772,480 772,960 868,436
1,500,000 659,040 827,520 828,000 828,480 828,960 930,436
1,600,000 703,840 883,520 884,000 884,480 884,960 992,436
1,700,000 748,640 939,520 940,000 940,480 940,960 1,054,436
1,800,000 793,440 995,520 996,000 996,480 996,960 1,116,436
1,900,000 838,240 1,051,520 1,052,000 1,052,480 1,052,960 1,178,436
2,000,000 883,040 1,107,520 1,108,000 1,108,480 1,108,960 1,240,436
- ------------------------------------------------------------------------------------------------------
</TABLE>
RETIREMENT PLAN
The Retirement Plan became effective January 1, 1957. The Retirement Plan is a
defined benefit, career average plan which is periodically updated. Employees of
Warner-Lambert and its participating subsidiaries are eligible to participate on
the January 1 following the date of hire. Normal retirement age under the
Retirement Plan is the later of age 65 or the completion of five years of
service and early retirement may be taken the first of any month following the
attainment of age 55 provided at least five years of service have been
completed. If early retirement pension payments begin prior to age 62, the
payments are reduced. The Retirement Plan provides that, in the event of a
change in control of Warner-Lambert (as defined in such plan), (i) the benefits
of participants will be afforded certain additional protection for a limited
period of time and (ii) if certain actions are taken with respect to the
Retirement Plan, any surplus assets then held in the trust will inure to the
benefit of participants and their beneficiaries.
The Retirement Plan provides that annual retirement income credit be
determined based upon the following formula: 1.5% of annual creditable earnings
as determined by an employee's January 1st base salary plus overtime and
incentive awards paid. Credited years of service under the Retirement Plan, as
of December 31, 1994, for each of the executive officers named in the Summary
Compensation Table are: Melvin R. Goodes-28.4 years; Lodewijk J. R. de Vink-6.0
years; John F. Walsh-26.3 years; Joseph E. Smith-5.0 years; and Ernest J.
Larini-18.0 years.
SUPPLEMENTAL PLAN
The Supplemental Plan became effective January 1, 1975. The Supplemental Plan
was established to attract and retain officers and key employees in senior
managerial positions by providing to such executives compensation in the form of
supplemental pension income in amounts reasonably related to their compensation
and length of service with Warner-Lambert. Normal retirement age under the
Supplemental Plan is age 65 and early retirement may be taken the first of any
month following the attainment of age 55 provided
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at least five years of service have been completed. If early retirement pension
payments begin prior to age 62, the payments are reduced. The annual benefit
payable under the Supplemental Plan is calculated by multiplying the sum of (a)
3.36% for each year of service after attainment of age 45, up to 10 years; plus
(b) 2.24% for each year of service after attainment of age 45 in excess of 10
and up to 20 years times average final compensation (the total amount of an
employee's compensation for the three calendar years during which such
employee's compensation was the highest of the five-year period of service
ending with such employee's early or normal retirement date, divided by three).
Such amount is reduced by the benefit payable under the Retirement Plan and
certain other retirement benefits including Social Security. The Supplemental
Plan also provides for payment to eligible employees of amounts they would have
received under the Retirement Plan in the absence of certain limitations imposed
by the Employee Retirement Income Security Act of 1974 and subsequent
legislation, and provides for payment to eligible employees of amounts they
would have received under the Retirement Plan if deferred incentive awards had
been included in creditable earnings under such plan. The Supplemental Plan
provides that, in the event of a change in control of Warner-Lambert (as defined
in such plan), (i) employees 55 years of age and older who meet certain salary
level requirements and who would have become eligible to receive Supplemental
Plan benefits upon retirement will receive such benefits upon retirement and
(ii) post-employment consulting requirements set forth in the Supplemental Plan
would no longer be applicable. Credited years of service under the Supplemental
Plan, as of December 31, 1994, for each of the executive officers named in the
Summary Compensation Table are: Melvin R. Goodes-14.7 years; Lodewijk J. R. de
Vink-4.8 years; John F. Walsh-7.5 years; Joseph E. Smith-5.8 years; and Ernest
J. Larini-6.8 years.
TERMINATION OF EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS AND MISCELLANEOUS
POLICIES
Warner-Lambert has severance policies which provide for payments of up to
twenty-four months' salary depending upon several factors, including age and
length of service, subject to modifications made by the Warner-Lambert Executive
Severance Plan (the 'Executive Severance Plan').
The Executive Severance Plan provides benefits in the event of a change in
control of Warner-Lambert (as defined in such plan) to those employees,
essentially officers, who are subject to the reporting requirements of Section
16(a) of the Securities Exchange Act of 1934, as amended. A change in control is
deemed to generally have occurred upon the acquisition of the voting power of
20% or more of Warner-Lambert's outstanding securities, a merger, consolidation,
sale or disposition of substantially all of Warner-Lambert's assets or a change
in more than half of Warner-Lambert's Board of Directors. The Executive
Severance Plan provides for severance benefits, which are payable only if a
participant leaves the employ of Warner-Lambert for any reason other than
termination for just cause (as defined in such plan) within three years after a
change in control, of thirty-six months' salary and bonus. The Executive
Severance Plan also provides for limited rights ('Limited Rights') to
participants in connection with outstanding stock options under Warner-Lambert's
stock option plans which do not presently have stock appreciation rights. The
Limited Rights provide for a cash payment to the holder upon a change in control
equal to the amount by which the fair market value (as defined in such option
plans) of a share of Common Stock exceeds the fair
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<PAGE>
market value of such a share on the date the stock option was granted,
multiplied by the number of shares with respect to which the Limited Right
applies. The Executive Severance Plan also provides special payments to
participants in amounts sufficient to reimburse such participants for any
federal excise tax or similar state or local tax which may be imposed with
respect to payments received following a change in control. Warner-Lambert has
also established an Enhanced Severance Plan, which is similar to the Executive
Severance Plan, for all United States non-hourly employees who are not eligible
to participate in the Executive Severance Plan.
In addition, in the event of a change in control of Warner-Lambert (as
defined), participants in the Warner-Lambert Savings and Stock Plan and the
Warner-Lambert Incentive Compensation Plan are afforded certain additional
protections and the benefits of participation in Warner-Lambert's Excess Savings
Plan are payable immediately.
In connection with the relocations of Mr. Joseph E. Smith, Vice President
of Warner-Lambert, from Pennsylvania to New Jersey, and of Dr. Pedro M.
Cuatrecasas, Vice President of Warner-Lambert, from North Carolina to Michigan,
interest-free loans were granted in 1990. Each loan is secured by the real
property owned by the executive officer. The current outstanding balances of the
loans are $250,000 and $350,000, respectively.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
Warner-Lambert's executive compensation programs are designed to attract, retain
and motivate the broad based executive talent required to achieve its business
objectives and increase shareholder value. These programs are administered by
the Compensation Committee of the Board of Directors which is comprised of the
individuals listed below. These individuals are outside directors of the Company
with responsibility for all compensation matters for Warner-Lambert's executive
officers.
GENERAL
Total compensation for Warner-Lambert's executive officers consists of a base
salary, annual cash bonus and long-term incentives, which include a cash
performance bonus based upon the Company's three-year earnings per share growth
and an equity component in the form of stock options and restricted stock. The
annual bonus and long-term incentives introduce considerable risk to the total
executive compensation package. These elements are variable, may fluctuate
significantly from year to year and are directly tied to Company and individual
performance.
To ensure that Management's interest in the Company is aligned with those
of its stockholders, a significant portion of executive compensation is
delivered through the equity component. Stock options are used to provide an
incentive that focuses attention on managing the Company from an owner's
perspective and are tied to the long-term performance of Warner-Lambert.
Restricted stock grants are used selectively to build stock ownership and
promote a long-term focus by restricting the stock from being sold, transferred
or assigned until the end of the specified vesting period when the restrictions
lapse. The combination of stock options and restricted stock grants provides a
level of risk and upside opportunity that encourages management performance in
the achievement of the Company's long-term goals and objectives. To further
promote an identification of the interests of Management with Warner-Lambert's
stockholders, in 1994, the Committee
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20
<PAGE>
approved the establishment of formal stock ownership goals for key members of
Management with the intent that each individual invest a certain dollar amount
in shares of Warner-Lambert Common Stock.
Warner-Lambert regularly reviews the competitiveness of its executive
compensation programs within the industries in which it
competes -- Pharmaceutical, Consumer Health Care and Confectionery. The
companies in Warner-Lambert's compensation comparator group include the same
companies that are in the industry peer group index in the Five-Year Total
Cumulative Shareholder Return graph on page 25. In addition, the compensation
comparator group also includes several leading consumer products companies
which, in conjunction with the industry peer group, represent the broader
marketplace for the Company's executive talent.
Warner-Lambert targets a level of total compensation (base salary, annual
bonus, stock awards and long-term bonuses) equal to the median total
compensation of its comparator group for like jobs, adjusting for company size.
In addition, with respect to stock awards, the Company's objective is to ensure
that a significant portion of the executives' total compensation is derived from
such long-term equity component. The total compensation package thus provides
considerable risk and upside opportunity that encourages the executives'
performance in the achievement of the Company's long-term goals and objectives.
As a result, any loss realized below or gain realized above the comparator group
median will be directly attributable to earnings performance and the value of
the Company stock.
The Committee has directed the Company's management to continue to review
executive compensation arrangements and employee benefit plans in light of
Section 162(m) of the Internal Revenue Code ('Section 162(m)'), which
establishes a limit on the deductibility of annual compensation for certain
executive officers that exceeds $1,000,000. It is the general intention of the
Committee to attempt to assure that executive compensation will meet the
requirements for deductibility under Section 162(m). However, the Committee
reserves the right to use its judgment, where merited by the Committee's need
for flexibility to respond to changing business conditions or by an executive's
individual performance, to nevertheless authorize compensation payments which
may not, in a specific case, be fully deductible by the Company. The Committee
will re-examine its policy with respect to Section 162(m) on an on-going basis.
1994 EXECUTIVE OFFICERS' COMPENSATION
In determining increases to executive officer compensation, the Committee
considered Company performance, including both financial and nonfinancial
indicators, individual performance, the business environment in which the
Company operated and competitive compensation trends.
Base salary increases were determined based upon individual performance,
competitive compensation trends and a review of salaries for like jobs at the
companies comprising Warner-Lambert's compensation comparator group.
The maximum annual amount which may be set aside for payment of annual cash
bonuses to eligible Company colleagues is first derived from a formula approved
by stockholders which takes into account the Company's net profit for the year
and the amount
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of capital employed in the Company's business. The annual cash bonus that is
actually paid to an individual executive officer is then determined by reviewing
the performance of the business unit which the executive officer manages,
including sales, profit and return on assets managed, and the executive
officer's individual performance and position level within the Company. As a
result of such review of business and individual performance for the year 1994,
total bonus awards to the executive officers as a group increased by 20.2% from
the prior year. A majority of each individual award was based on Company and
business unit performance, with the remainder based on individual criteria.
Long-term cash performance bonuses provide for cash dollar awards
contingent on the attainment of certain earnings per share ('EPS') performance
levels during the three-year period subsequent to the grant. At the beginning of
each performance period, the executive officers receive a targeted long-term
grant based on position level. The executive officers received a grant of these
long-term cash performance bonuses in January, 1994. In 1994, the method of
payment under the long-term bonus awards was modified. Prior to revision, these
awards became payable at the end of the three-year performance period based upon
the Company's achievement of a specific cumulative average EPS growth rate for
the period. Following revision, these awards become payable at the end of such
period based upon the Company's achievement of a certain cumulative average EPS
growth rate, compared to the median EPS growth (based on ongoing operations) of
a select group of companies in the industries in which the Company competes.
Awards are payable at values ranging from zero to 200 percent of target levels,
and pay out following the end of the three-year performance period after EPS
performance of the long-term bonus award comparator group is calculated.
Outstanding long-term bonus grants that will become payable during the
transition period (i.e., after 1994 and prior to 1997) will be paid in part in
accordance with the former arrangement and in part in accordance with the
current methodology. The Committee also has discretion to lower the amount of
payouts with respect to such long-term awards under appropriate circumstances.
For the three-year performance period ended December 31, 1994, the amount of
long-term bonuses payable to the executive officers as a group will be
determined following the appropriate calculations.
The Company has established stock option award guidelines for each position
level within the Company providing for a range from zero up to a maximum number
of shares. Competitive data from the compensation comparator group, including
information on the number of stock options granted at the comparator group
companies, the percentage of compensation attributable to such stock option
grants and the estimated value of such stock options, were used to develop these
guidelines, which are reviewed periodically. The actual award granted to a
Company executive is based upon the individual's overall job performance as well
as specific contributions to Company performance for the year. While factors
such as Company performance are considered in determining the amount of the
stock option grant, the individual's current performance and contributions to
Company performance are the primary determinants in these deliberations. In
October, 1994, in accordance with the above criteria, the executive officers
received stock options which are exercisable ratably over the next four years.
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<PAGE>
1994 CEO COMPENSATION
As a result of Mr. Goodes' appointment as Chairman of the Board and Chief
Executive Officer, he received an employment agreement with Warner-Lambert which
expires May 1, 2000, and is discussed on page 14. The following is a description
of the decisions with regard to Mr. Goodes' 1994 compensation.
In February, 1994, Mr. Goodes received a base salary increase of 5.5%. This
increase was arrived at after considering Mr. Goodes' 1993 job performance as
well as his compensation relative to his peers at Warner-Lambert's compensation
comparator companies. Mr. Goodes' salary increase does not affect the other
elements of his compensation. Mr. Goodes' employment agreement provides for a
minimum annual salary that may be increased annually at the discretion of the
Committee, based upon the average salary increase of those Company officers
whose names appear in the Annual Report. The salary for Mr. Goodes reported in
the Summary Compensation Table on page 13 reflects the salary actually paid to
Mr. Goodes in 1994. Effective February, 1995, the Committee increased Mr.
Goodes' salary by 9.2%, thus establishing a new minimum annual salary under the
terms of his employment agreement.
In October, 1994, Mr. Goodes received an annual stock option grant of
45,000 shares. These options were issued at the fair market value on the date of
the grant and are exercisable ratably over the next four years. In January,
1995, Mr. Goodes received an annual cash bonus of $820,000, compared to an
annual cash bonus of $586,000 received in January, 1994. Mr. Goodes' long-term
cash performance bonus, which is based upon the Company's achievement of a
certain cumulative average EPS growth rate for the three years 1992, 1993 and
1994, and the position level held by Mr. Goodes at the beginning of this
three-year performance period, will be paid in 1995, following the appropriate
calculations of the 1994 earnings per share for each of the companies in the
long-term bonus award comparator group.
In considering Mr. Goodes' 1994 stock option grant, annual bonus and base
salary increase in February, 1995, the Committee considered several Company
financial performance measures for 1994, including sales, profits, earnings per
share and return on assets managed, which measures met expectations, as well as
Mr. Goodes' individual performance during the year. Mr. Goodes' total annual
compensation for 1994 increased by 19.9%, and his annual stock option grant in
1994 was equal to the annual stock option grant he received in 1993.
In determining Mr. Goodes' compensation, the Committee did not attach
specific weights or values to the various factors considered. The Committee
considered the significant progress made in resolving the issues related to
manufacturing procedures employed at Warner-Lambert's pharmaceutical facilities
in Puerto Rico and the United States. In addition, the Committee noted that,
despite the erosion of market share of the Company's lipid regulator drug
Lopid'r', 1994 sales and profit targets were achieved; and that the annual
increase in the stock value of Warner-Lambert's Common Stock exceeded the growth
of the Standard & Poor's 500 Stock Index, the Dow Jones Industrial Average and
the average stock price growth of Warner-Lambert's industry peer group. The
Committee also considered key decisions and actions taken by Mr. Goodes to
ensure the Company's long-term profitability and growth, such as the continued
restructuring of the Company's pharmaceutical business in response to changes in
the industry in order to remain competitive, several major transactions,
including continued expansion of the joint ventures
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<PAGE>
with Wellcome plc and Glaxo Holdings plc for the development and marketing of
consumer health care products, the acquisition of a major Italian confectionery
business and the creation of a joint venture in China to produce confectionery
and consumer health care products, and the introduction of several new consumer
products, such as Silk Effects'r' women's wet-shave system, a line of herbal
throat drops, a roll candy with real fruit juice and Freshburst Listerine'r'
Antiseptic mouthwash.
COMPENSATION COMMITTEE MEMBERS
Donald C. Clark, Chairman
John A. Georges
William R. Howell
Lawrence G. Rawl
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<PAGE>
PERFORMANCE GRAPH
The graph set forth below compares the yearly percentage change in
Warner-Lambert's cumulative total shareholder return on its Common Stock to the
cumulative total return of the Standard & Poor's 500 Stock Index (the 'S&P 500')
and of a peer group index comprised of Abbott Laboratories, American Home
Products Corporation, Bristol-Myers Squibb Company, Eli Lilly and Company,
Johnson & Johnson, Merck & Co., Inc., Pfizer Inc., Schering-Plough Corporation
and The Upjohn Company:
WARNER-LAMBERT COMPANY
Cumulative Total Shareholder Return for
Five-Year Period Ending December 31, 1994*
[PERFORMANCE GRAPH]
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
December 31... 1989 1990 1991 1992 1993 1994
Warner-Lambert 100.00 119.83 141.22 129.75 131.02 154.57
Peer Group 100.00 117.58 186.18 156.03 145.96 164.98
S&P 500 100.00 96.89 126.28 135.88 149.52 151.55
- ---------------------------------------------------------------------------------------
</TABLE>
* Assumes that the value of the investment in Warner-Lambert Common Stock and
each index was $100 on December 31, 1989 and that all dividends were reinvested.
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<PAGE>
BOARD OF DIRECTORS' PROPOSAL RELATING TO
APPOINTMENT OF INDEPENDENT ACCOUNTANTS
The firm of Price Waterhouse LLP has audited the consolidated financial
statements of Warner-Lambert for many years and the Audit Committee has
recommended, and the Board of Directors has approved, the appointment of this
firm to continue such services for the year 1995. Accordingly, the Board of
Directors recommends that the appointment of the firm of Price Waterhouse LLP to
audit the consolidated financial statements of Warner-Lambert and its
subsidiaries for the year 1995 be approved.
A representative of Price Waterhouse LLP will be present at the meeting to
answer any questions by stockholders relating to its audit of the consolidated
financial statements of Warner-Lambert for 1994 and other appropriate questions.
The aggregate fees for worldwide audit services in connection with the 1994
audit performed by Price Waterhouse LLP for Warner-Lambert were approximately
$3,800,000. The representative of Price Waterhouse LLP will be permitted to make
a statement should that firm desire to do so.
Approval of the foregoing will require the affirmative vote of a majority
of the votes cast. The persons named in the enclosed form of Proxy have advised
that it is their intention to vote each Proxy for such proposal, unless a
contrary decision is indicated on the Proxy.
RESOLUTION PROPOSED BY STOCKHOLDER --
OPPOSED BY THE BOARD OF DIRECTORS
Warner-Lambert has been informed by Ms. Josephine P. Laitman, 31 Roberts Circle,
Basking Ridge, New Jersey 07920, holder of 2,000 shares of Common Stock, that
she will introduce at the meeting the resolution and statement in support
thereof set forth below.
PROPOSAL: TO TERMINATE RETIREMENT PLAN FOR NON-EMPLOYEE
DIRECTORS AS COST REDUCTION INITIATIVE
The Company retirement plan for non-employee directors with five years or more
of Board service allows, at age 70, an annual retirement income equalling 100%
of the director's last annual fee.
<TABLE>
<S> <C>
RESOLVED: That the stock holders of Warner-Lambert Company assembled in person and by proxy
hereby recommend that the Board of Directors withdraw the retirement plan and the
Group Life Insurance, Medical, Dental and Accidental Death and Dismemberment plans
thus making such plans unavailable to current and future non-employee directors.
REASON: Non-employee directors are more than adequately compensated by Warner-Lambert.
</TABLE>
SUPPORTING STATEMENT:
a) At present the non-employee director receives an annual fee of
$30,000.00 as well as $1,000.00 for attendance at each meeting OR
participation at special meetings.
b) Each non-employee director receives the annual dividends on the
grant of 2,000 shares of Warner-Lambert -- currently a total of $4,560.00
per year.
c) Each non-employee director receives $100,000.00 of group life
insurance plus medical, dental, and accidental death and dismemberment
benefits, the cost of which has not been enumerated.
d) Currently, each non-employee director, after ten years of service,
will receive full vesting in 2,000 shares of Common Stock of the
Company -- current worth approximately $160,000.00 or an additional average
annual compensation of $16,000.00.
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<PAGE>
e) After five years of service and at age 70, each non-employee
director receives a life annuity equal to the annual fee -- currently
$30,000.00 per year. The approximate current cost of this life annuity is
$250,000.00. Assuming an average of 10 years of service for each director,
this amounts to an additional annual compensation of $25,000.00.
f) The total compensation would therefore average out over a 10 year
period to $85,560.00 per year, exclusive of the group life, medical and
dental benefits, and participation fees and expenses.
This amount is overly excessive, especially when one considers the
further points that:
1. The non-employee director is already eligible or will be eligible
to receive a major pension benefit as well as group life, medical and
dental benefits from his primary employer.
2. The rate of the pension benefit (100% of annual fees after five
years or 20% per year) far exceeds the normal rate of pension benefits for
employees (1 1/2% per year).
3. The average non-employee director already serves on the Board of
Directors of 3.4 additional commercial companies and is eligible to receive
a similar set of benefits from many of these companies.
4. The cancellation of these benefits would still mean that each
non-employee director would be receiving $60,560.00 per year exclusive of
any additional participation fees.
As a first time proposal in 1994, this garnered an unprecedented
27,486,741 approving votes, exceeding 27% of votes cast. By voting in favor
of this proposal, the stockholders of Warner-Lambert can not only stop this
profligate use of company assets but send a strong message to Corporate
America that the corporate welfare system, like the government welfare
system, must become accountable to those who pay for it.
THE BOARD OF DIRECTORS IS NOT RESPONSIBLE FOR, AND DISCLAIMS ANY
RESPONSIBILITY FOR, SUCH STATEMENT OF SUCH STOCKHOLDER AND RECOMMENDS THAT THE
STOCKHOLDERS VOTE AGAINST THE FOREGOING RESOLUTION.
It is in the best interests of Warner-Lambert and its stockholders to
attract and retain directors who are leaders in their respective fields, whether
in business, academia, the medical/scientific area, government or otherwise. In
addition, we recognize that Warner-Lambert and its stockholders are served well
by directors who represent a broad cross section of experience in a number of
disciplines and who bring to the Board a diversity of experience.
The Company's directors are responsible for the business and affairs of the
Company and for the Company's overall performance. The Board meets ten times
each year; and, in addition, each non-employee director is a member of two or
more Committees of the Board that also meet several times during the year. Each
director is expected to analyze and understand numerous complex issues facing
the Company and to be an involved and active member in discussing and resolving
those issues. Furthermore, each director must be responsive to the Company's
stockholders, the regulatory agencies that govern the Company, such as the
Securities and Exchange Commission, and the public, in general.
In order to attract and retain high-quality outside directors who are able
to handle the challenging demands of the Board of Directors, it is necessary to
provide a compensation package that is competitive with that of companies
similar to Warner-Lambert. In addition to an annual retainer and meeting fees,
non-employee directors of companies similar to
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27
<PAGE>
Warner-Lambert also receive certain benefits. Although the value of the several
benefits that comprise outside directors' compensation may vary from company to
company, recent surveys of major U.S. companies, which include many of the
companies with which Warner-Lambert competes, indicate that Warner-Lambert's
total compensation package for its outside directors is competitive.
In reviewing director compensation, a recent study conducted by The
Conference Board indicated that 88% of the companies surveyed provide their
outside directors with retirement benefits. The provisions of the Company's
Retirement Plan for Directors are similar in nature to the plans that are
currently in place at companies that compete with Warner-Lambert for director
talent. If the Company's Retirement Plan for Directors were eliminated, we
believe that the Company would be placed at a disadvantage with respect to other
similar companies, and the Company's ability to attract and retain high-caliber
directors would be impeded.
It should be noted that, although the provisions of the Company's plan
allow for payment of a retirement benefit after five years of service on the
Board, many of the Company's outside directors standing for re-election have had
a much longer tenure on the Board, with the average number of years of service
at ten years. Furthermore, the plan provides that a director must reach the age
of 70 years before receiving any benefits under the plan.
With respect to the group life insurance, medical, dental and accidental
death and dismemberment benefits provided to Warner-Lambert's directors, the
cost to the Company is not significant. In addition, the amount of the premiums
is treated as imputed income to the director who elects to participate in those
benefits. Furthermore, by providing such benefits to our outside directors, the
Company is able to attract individuals who are self-employed or are employed by
not-for-profit organizations or educational institutions and, thus, bring
together directors with a diversity of experience.
Accordingly, the Board of Directors recommends a vote AGAINST the foregoing
proposal. Approval of the proposal will require the affirmative vote of a
majority of the votes cast. The persons named in the enclosed form of Proxy have
advised that it is their intention to vote each Proxy against the foregoing
proposal, unless a contrary direction is indicated on the Proxy.
STOCKHOLDER PROPOSALS
From time to time stockholders present proposals which may be proper subjects
for inclusion in the Proxy Statement and for consideration at the annual
meeting. In order to be considered, such proposals must be submitted on a timely
basis. Proposals for the 1996 annual stockholders' meeting must be received at
Warner-Lambert's principal executive offices no later than November 7, 1995. Any
such proposals, as well as any questions relating thereto, should be directed to
the Secretary of Warner-Lambert.
OTHER INFORMATION
The cost of the solicitation of Proxies by the Board of Directors will be borne
by Warner-Lambert. Such solicitation will be made by mail, and, in addition, may
be made by officers and employees of Warner-Lambert, personally or by telephone
or telegram. Forms of Proxies and proxy materials may also be distributed, at
the expense of Warner-Lambert, through brokers, custodians and other like
parties to the beneficial owners of Common Stock of Warner-Lambert.
Warner-Lambert has also retained Kissel-Blake Inc. to aid in solicitation of
Proxies at an anticipated cost not in excess of $13,500.
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28
<PAGE>
[LOGO]
WARNER-LAMBERT COMPANY
MORRIS PLAINS, NEW JERSEY 07950
(201) 540-2000
['RECYCLED' LOGO] Printed on Recycled Paper
<PAGE>
STATEMENT OF DIFFERENCES
------------------------
The registered trademark symbol shall be expressed as 'r'
<PAGE>
APPENDIX 1
FC PROXY CARD
WARNER-LAMBERT COMPANY
PROXY FOR THE ANNUAL MEETING TO BE HELD AT 10:30 O'CLOCK, EASTERN
DAYLIGHT SAVING TIME, TUESDAY MORNING, APRIL 25, 1995.
THE PARSIPPANY HILTON HOTEL, ONE HILTON COURT, PARSIPPANY, NEW JERSEY
P Melvin R. Goodes, Lodewijk J. R. de Vink and Ernest J. Larini
R and each of them, with full power of substitution, are hereby
O authorized to represent and to vote and act with respect to all
X stock of the undersigned at the Annual Meeting of Stockholders of
Y Warner-Lambert Company on April 25, 1995, and any adjournment or
adjournments thereof, as designated herein upon the proposals set
forth herein and, in their discretion, upon such other matters as
may properly be brought before the meeting.
Nominees for election to the Board of Directors: Change of Address
<TABLE>
<S> <C>
B. C. Ames, D. C. Clark, L.J.R. de Vink, -----------------------------------------
J. A. Georges, M. R. Goodes, W. H. Gray III, -----------------------------------------
W. R. Howell, L. D. Leffall, Jr., P. S. Longe, -----------------------------------------
L. G. Rawl, M. I. Sovern and J.D. Williams -----------------------------------------
(If you have written in the above space,
please mark the corresponding box on the
reverse side of this card)
</TABLE>
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
SEE REVERSE SIDE
<PAGE>
[x] Please mark your votes as in this example. 0110
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE CORPORATION. When
properly executed it will be voted as directed by the stockholder but, unless
otherwise specified, it will be voted FOR the election of Directors, FOR
proposal (2) and AGAINST proposal (3).
<TABLE>
<CAPTION>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR THE ELECTION OF DIRECTORS AND FOR PROPOSAL (2). AGAINST PROPOSAL(3).
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1.Election of FOR WITHHELD 2.Price Waterhouse LLP FOR AGAINST ABSTAIN 3.Proposal relating to FOR AGAINST ABSTAIN
Directors. [ ] [ ] as independent [ ] [ ] [ ] directors' [ ] [ ] [ ]
(see reverse) accountants compensation
</TABLE>
For, except vote withheld from the following nominee(s):
- ----------------------------------------------------------
PLEASE SEND AN ADMITTANCE CARD. [ ]
CHANGE OF ADDRESS ON REVERSE SIDE. [ ]
SIGNATURE(S)___________________________________________________ DATE__________
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
<PAGE>
APPENDIX 2
FC (UNEXCHANGED SHAREHOLDERS) PROXY CARD
[BLUE STRIPE]
WARNER-LAMBERT COMPANY
PROXY FOR THE ANNUAL MEETING TO BE HELD AT 10:30 O'CLOCK, EASTERN
DAYLIGHT SAVING TIME, TUESDAY MORNING, APRIL 25, 1995.
THE PARSIPPANY HILTON HOTEL, ONE HILTON COURT, PARSIPPANY, NEW JERSEY
P Melvin R. Goodes, Lodewijk J. R. de Vink and Ernest J. Larini
R and each of them, with full power of substitution, are hereby
O authorized to represent and to vote and act with respect to all
X stock of the undersigned at the Annual Meeting of Stockholders of
Y Warner-Lambert Company on April 25, 1995, and any adjournment or
adjournments thereof, as designated herein upon the proposals set
forth herein and, in their discretion, upon such other matters as
may properly be brought before the meeting.
Nominees for election to the Board of Directors: Change of Address
<TABLE>
<S> <C>
B. C. Ames, D. C. Clark, L.J.R. de Vink, -----------------------------------------
J. A. Georges, M. R. Goodes, W. H. Gray III, -----------------------------------------
W. R. Howell, L. D. Leffall, Jr., P. S. Longe, -----------------------------------------
L. G. Rawl, M. I. Sovern and J.D. Williams -----------------------------------------
(If you have written in the above space,
please mark the corresponding box on the
reverse side of this card)
</TABLE>
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
SEE REVERSE SIDE
<PAGE>
[x] Please mark your votes as in this example. 0110
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE CORPORATION. When
properly executed it will be voted as directed by the stockholder but, unless
otherwise specified, it will be voted FOR the election of Directors, FOR
proposal (2) and AGAINST proposal (3).
<TABLE>
<CAPTION>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR THE ELECTION OF DIRECTORS AND FOR PROPOSAL (2). AGAINST PROPOSAL(3).
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1.Election of FOR WITHHELD 2.Price Waterhouse LLP FOR AGAINST ABSTAIN 3.Proposal relating to FOR AGAINST ABSTAIN
Directors [ ] [ ] as independent [ ] [ ] [ ] directors' [ ] [ ] [ ]
(see reverse) accountants compensation
</TABLE>
For, except vote withheld from the following nominee(s):
- ---------------------------------------------------------
PLEASE SEND AN ADMITTANCE CARD. [ ]
CHANGE OF ADDRESS ON REVERSE SIDE. [ ]
SIGNATURE(S)___________________________________________________ DATE__________
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
<PAGE>
APPENDIX 3
KB PROXY CARD
WARNER-LAMBERT COMPANY
PROXY FOR THE ANNUAL MEETING TO BE HELD AT 10:30 O'CLOCK, EASTERN
DAYLIGHT SAVING TIME, TUESDAY MORNING, APRIL 25, 1995.
THE PARSIPPANY HILTON HOTEL, ONE HILTON COURT, PARSIPPANY, NEW JERSEY
P Melvin R. Goodes, Lodewijk J. R. de Vink and Ernest J. Larini
R and each of them, with full power of substitution, are hereby
O authorized to represent and to vote and act with respect to all
X stock of the undersigned at the Annual Meeting of Stockholders of
Y Warner-Lambert Company on April 25, 1995, and any adjournment or
adjournments thereof, as designated herein upon the proposals set
forth herein and, in their discretion, upon such other matters as
may properly be brought before the meeting.
Nominees for election to the Board of Directors: Change of Address
<TABLE>
<S> <C>
B. C. Ames, D. C. Clark, L.J.R. de Vink, -----------------------------------------
J. A. Georges, M. R. Goodes, W. H. Gray III, -----------------------------------------
W. R. Howell, L. D. Leffall, Jr., P. S. Longe, -----------------------------------------
L. G. Rawl, M. I. Sovern and J.D. Williams -----------------------------------------
(If you have written in the above space,
please mark the corresponding box on the
reverse side of this card)
</TABLE>
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
SEE REVERSE SIDE
<PAGE>
[x] Please mark your votes as in this example. 0110
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE CORPORATION. When
properly executed it will be voted as directed by the stockholder but, unless
otherwise specified, it will be voted FOR the election of Directors, FOR
proposal (2) and AGAINST proposal (3).
<TABLE>
<CAPTION>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR THE ELECTION OF DIRECTORS AND FOR PROPOSAL (2). AGAINST PROPOSAL(3).
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1.Election of FOR WITHHELD 2.Price Waterhouse LLP FOR AGAINST ABSTAIN 3.Proposal relating to FOR AGAINST ABSTAIN
Directors [ ] [ ] as independent [ ] [ ] [ ] directors' [ ] [ ] [ ]
(see reverse) accountants compensation
</TABLE>
For, except vote withheld from the following nominee(s):
- -------------------------------------------------------
PLEASE SEND AN ADMITTANCE CARD. [ ]
CHANGE OF ADDRESS ON REVERSE SIDE. [ ]
SIGNATURE(S)___________________________________________________ DATE__________
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
