<PAGE> 1
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:
<TABLE>
<S> <C>
/ / 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 sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
CARTER-WALLACE, INC.
- --------------------------------------------------------------------------------
(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), or 14a-6(i)(1), or 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> 2
CARTER-WALLACE, INC.
1345 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10105
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JULY 18, 1995
------------------------
The Annual Meeting of Stockholders of Carter-Wallace, Inc. will be held
at the Hotel du Pont, 11th and Market Streets, Wilmington, Delaware 19801, on
Tuesday, July 18, 1995, at 1:00 P.M., Eastern Daylight Time, for the following
purposes:
1. To elect directors.
2. To consider and take action upon the ratification of the
appointment by the Board of Directors of KPMG Peat Marwick LLP as
independent auditors for the Company for the current fiscal year.
3. To consider and take action upon a proposal made by a stockholder
relating to certain attributes of individuals to be directors of the
Company.
4. To transact any other business which may properly come before the
meeting.
Only holders of record of Common Stock and Class B Common Stock at the
close of business on June 1, 1995 will be entitled to vote at the meeting.
To assure your representation at the meeting, please date, sign and mail
promptly the accompanying proxy, for which a postpaid return envelope is
provided. Please return the proxy in a timely fashion to save the Company the
expense of an additional mailing of the proxy materials.
RALPH LEVINE
Secretary
New York, New York
June 19, 1995
<PAGE> 3
CARTER-WALLACE, INC.
1345 AVENUE OF THE AMERICAS, NEW YORK, NEW YORK 10105
------------------
ANNUAL MEETING OF STOCKHOLDERS
JULY 18, 1995
------------------
PROXY STATEMENT
------------------
This Proxy Statement is furnished in connection with the solicitation by
the Board of Directors of Carter-Wallace, Inc. (the "Company") of proxies for
use at the Company's 1995 Annual Meeting of Stockholders (the "Meeting") to be
held at the Hotel du Pont, 11th and Market Streets, Wilmington, Delaware 19801,
on Tuesday, July 18, 1995 at 1:00 P.M., Eastern Daylight Time and at any
adjournment or adjournments thereof. The date of mailing of this Proxy Statement
and the accompanying proxy is on or about June 21, 1995.
At the Meeting, all shares represented by a properly executed proxy in the
accompanying form (which has not been revoked) will be voted, and, where
instructions are specified, will be voted in accordance with such
specifications. Where instructions are not specified, the shares represented by
such proxy will be voted (a) FOR the election of each of the nominees for
director named in this Proxy Statement, (b) FOR the ratification of the
appointment of KPMG Peat Marwick LLP as independent auditors for the Company,
and (c) AGAINST the stockholder proposal relating to certain attributes of
individuals to be directors of the Company. If any nominee for election as a
director should be unable to serve, which is not presently anticipated, proxies
will be voted for a nominee designated by the Board of Directors. In addition,
proxies will be voted in the discretion of the proxy holders with respect to
such other business as may properly come before the Meeting.
Any proxy may be revoked by a stockholder by a written communication to the
Secretary of the Company delivered prior to or at the Meeting, to the extent the
proxy has not theretofore been voted. Sending in a signed proxy will not affect
a stockholder's right to attend the Meeting and to vote in person.
VOTING RIGHTS
On each matter submitted to a vote at the Meeting, (i) each holder of
Common Stock, par value $1.00 per share, of the Company ("Common Stock") is
entitled to one (1) vote for each such share registered in his name at the close
of business on June 1, 1995, the record date stated in the Notice of Annual
Meeting of Stockholders (the "Record Date"), and (ii) each holder of Class B
Common Stock, par value $1.00 per share, of the Company ("Class B Common Stock")
is entitled to ten (10) votes for each such share registered in his name at the
close of business on the Record Date. As of the Record Date, the Company had
33,600,414 shares of Common Stock outstanding and entitled to vote and
12,512,858 shares of Class B Common Stock outstanding and entitled to vote. On
all actions to be taken at the Meeting, holders of Common Stock and holders of
Class B Common Stock vote together as a single class. On the Record Date,
officers and directors of the Company and members of their immediate families
beneficially owned an aggregate of 11,945,476 shares of Common Stock,
representing 35.55% of the outstanding shares of Common Stock and an aggregate
of 11,802,135 shares of Class B Common Stock, representing 94.32% of the
outstanding shares of Class B Common Stock; such holdings represent 81.88%, in
the aggregate, of the voting power of shares entitled to vote at the Meeting.
See "PRINCIPAL STOCKHOLDERS."
<PAGE> 4
PRINCIPAL STOCKHOLDERS
As used in this Proxy Statement, "beneficial ownership" means the sole or
shared power to vote, or to direct the voting of, a security, or the sole or
shared investment power with respect to a security (that is, the power to
dispose of, or to direct the disposition of, a security). In addition, for
purposes of this Proxy Statement, a person is deemed as of any date to have
"beneficial ownership" of any security that such person has the right to acquire
within 60 days after such date through the exercise of an option or similar
right or otherwise and of any security held in the name of such person's spouse
or minor children.
As of the Record Date, the only persons known to the Company who
beneficially owned more than 5% of either the outstanding shares of Common Stock
or the outstanding shares of Class B Common Stock were Scudder, Stevens & Clark,
Inc., 345 Park Avenue, New York, New York 10158; State of Wisconsin Investment
Board, P.O. Box 7842, Madison, Wisconsin 53707, and The CPI Development
Corporation, 229 South State Street, Dover, Delaware 19901 ("CPI") and its
directors and stockholders. CPI is a personal holding company, the assets of
which consist of 11,754,000 shares of Common Stock, which represent 34.98% of
the outstanding shares of Common Stock, and 11,754,000 shares of Class B Common
Stock, which represent 93.94% of the outstanding shares of Class B Common Stock.
The directors of CPI are Henry H. Hoyt, Jr., Chairman of the Board of Directors
and Chief Executive Officer of the Company, Scott C. Hoyt, Vice President, New
Products, Carter Products Division of the Company and Suzanne H. Garcia. Henry
H. Hoyt, Jr., Scott C. Hoyt and Suzanne H. Garcia are the beneficial owners of
substantially all the outstanding voting securities of CPI. Certain information
as to such stockholders and the number of shares of Common Stock and of Class B
Common Stock beneficially owned by all officers and directors of the Company as
a group as of the Record Date is set forth on the following page.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
---------------------------------------------------
CLASS B
COMMON PERCENT COMMON PERCENT
NAME AND ADDRESS STOCK OF CLASS(1) STOCK OF CLASS(1)
------------------------------------------- ------------- ----------- ------------- -----------
<S> <C> <C> <C> <C>
THE CPI DEVELOPMENT
CORPORATION 11,754,000 34.98% 11,754,000 93.94%
229 South State Street
Dover, Delaware 19901(5)
HENRY H. HOYT, JR. 11,806,509 35.38% 11,785,560 94.19%
1345 Avenue of the Americas (2)(3) (2)(3)
New York, New York 10105(5)
SCOTT C. HOYT 11,754,324(2) 34.98% 11,754,000(2) 93.94%
1345 Avenue of the Americas
New York, New York 10105(5)
SUZANNE H. GARCIA 11,776,500 35.05% 11,776,500 94.12%
P.O. Box 5040 (2)(3) (2)(3)
Santa Fe, New Mexico 87502(5)
SCUDDER, STEVENS &
CLARK, INC. 2,092,000 6.23% -- --
345 Park Avenue
New York, New York 10158(5)
STATE OF WISCONSIN
INVESTMENT BOARD 2,540,000 7.56% -- --
P.O. Box 7842
Madison, Wisconsin 53707(5)
All officers and directors of the Company 11,945,476 35.55% 11,802,135(3) 94.32%
as a group (21 persons) (3)(4)
</TABLE>
2
<PAGE> 5
- ---------------
(1) Computed on the basis of 33,600,414 shares of Common Stock and
12,512,858 shares of Class B Common Stock, as the case may be, outstanding on
the Record Date.
(2) Includes the number of shares of Common Stock and of Class B Common
Stock, as the case may be, owned of record by CPI and as to which Henry H. Hoyt,
Jr., Scott C. Hoyt and Suzanne H. Garcia are deemed beneficial owners by virtue
of their relationships with CPI. Henry H. Hoyt, Jr., Scott C. Hoyt and Suzanne
H. Garcia disclaim beneficial ownership of such shares.
(3) Includes an additional 132,509 and 22,500 shares of Common Stock and
31,560 and 22,500 shares of Class B Common Stock which are beneficially owned by
Henry H. Hoyt, Jr., and Suzanne H. Garcia, respectively. In no case do these
additional shares constitute more than 1/2 of 1% of the shares of Common Stock
or Class B Common Stock, as the case may be, outstanding and they do not change
the approximate percentage of ownership reflected in the table. Henry H. Hoyt,
Jr. disclaims beneficial ownership of 9,000 of these additional shares of Common
Stock and 9,000 of these additional shares of Class B Common Stock that are held
in testamentary trusts of which he is a trustee and/or remainderman. Suzanne H.
Garcia disclaims beneficial ownership of 9,000 of these additional shares of
Common Stock and 9,000 of these additional shares of Class B Common Stock.
(4) Does not include 317,758 shares of Common Stock issuable to certain
officers at a future date pursuant to the Company's Restricted Stock Award Plan.
(5) Based solely on a review of the reports of ownership and changes in
their ownership filed with the Securities and Exchange Commission and the New
York Stock Exchange and representations furnished to the Company during the last
fiscal year by officers, directors and more than 5% beneficial owners of a
registered class of the Company's equity securities, the Company believes that
each of these persons is in compliance with all applicable filing requirements.
3
<PAGE> 6
ELECTION OF DIRECTORS
Eight directors will be elected to serve until the next Annual Meeting of
Stockholders or until their successors are elected. Shares represented by
proxies solicited by the Board of Directors will, unless otherwise specified
thereon, be voted for the election of the nominees named below, each of whom is
presently a director. All nominees for director were elected at the last annual
meeting of stockholders.
<TABLE>
<CAPTION>
COMMON STOCK CLASS B COMMON STOCK
-------------------------- --------------------------
SHARES OWNED SHARES OWNED
NAME, AGE, PRINCIPAL SERVED AS BENEFICIALLY PERCENT BENEFICIALLY PERCENT
OCCUPATION AND OTHER A DIRECTOR ON THE RECORD OF ON THE RECORD OF
INFORMATION SINCE DATE CLASS(1) DATE CLASS(1)
- ----------------------------------- ---------- ------------- -------- ------------- --------
<S> <C> <C> <C> <C> <C>
DANIEL J. BLACK; 63;
President and Chief Operating
Officer of the Company since
prior to June 1990(2)........... 1975 2,775 (7) 2,775 .02%
DAVID M. BALDWIN; 66;
Chairman of the Board, David M.
Baldwin Realty Co., Inc. since
February 28, 1994; President,
Helmsley-Noyes Company, Inc.
since prior to June 1990........ 1990 3,000 (7) -- --
RICHARD L. CRUESS, M.D.; 65;
Professor of Surgery, Center for
Medical Education; McGill
University, Montreal, Quebec,
Canada Dean, Faculty of
Medicine, McGill University,
Montreal, Quebec, Canada from
prior to June 1990 to May 1995;
Professor of Surgery and
Chairman of the Division of
Orthopedic Surgery, McGill
University, Montreal, Canada
since prior to June 1990;
Orthopedic Surgeon-in-Charge,
Royal Victoria Hospital,
Montreal, Canada since prior to
June 1990....................... 1977 300 (7) 300 (7)
HENRY H. HOYT, JR.; 67;
Chairman of the Board of
Directors and Chief Executive
Officer of the Company since
prior to June 1990(2)(3)........ 1955 11,886,509 35.38% 11,785,560 94.19%
(5)(6) (5)(6)
SCOTT C. HOYT; 42;
Vice President, New Products,
Carter Products Division ("CPD")
since August 1993; Vice
President, Personal Products
Marketing, CPD since June 1991;
Vice President, Market
Development, CPD since prior to
June 1991; Director, Marketing,
Personal Products, CPD since
prior to May 1990(3)............ 1988 11,754,324(5) 34.98% 11,754,000(5) 93.94%
RALPH LEVINE; 59;
Vice President, Secretary and
General Counsel since prior to
June 1990(2).................... 1990 3,000(8) (7) -- --
</TABLE>
4
<PAGE> 7
<TABLE>
<CAPTION>
COMMON STOCK CLASS B COMMON STOCK
-------------------------- --------------------------
SHARES OWNED SHARES OWNED
NAME, AGE, PRINCIPAL SERVED AS BENEFICIALLY PERCENT BENEFICIALLY PERCENT
OCCUPATION AND OTHER A DIRECTOR ON THE RECORD OF ON THE RECORD OF
INFORMATION SINCE DATE CLASS(1) DATE CLASS(1)
- ----------------------------------- ---------- ------------- -------- ------------- --------
<S> <C> <C> <C> <C> <C>
HERBERT M. RINALDI; 66;
Partner in the firm of Carella,
Byrne, Bain, Gilfillan, Cecchi,
Stewart & Olstein (attorneys)
since prior to June 1990(4)..... 1977 9,000 .03% -- --
PAUL A. VETERI; 53;
Vice President, Finance and
Chief Financial Officer since
prior to June 1990(2)........... 1990 5,700(9) .02% -- --
</TABLE>
- ---------------
(1) Computed on the basis of 33,600,414 shares of Common Stock and
12,512,858 shares of Class B Common Stock, as the case may be, outstanding on
the Record Date, unless otherwise noted.
(2) Member of the Executive Committee.
(3) Scott C. Hoyt is the nephew of Henry H. Hoyt, Jr. There are no other
family relationships among the directors and officers of the Company.
(4) The firm Carella, Byrne, Bain, Gilfillan, Cecchi, Stewart & Olstein has
performed legal services for the Company in the last fiscal year.
(5) Includes 11,754,000 shares of Common Stock and 11,754,000 shares of
Class B Common Stock, as the case may be, owned of record by CPI. For
information with respect to the relationship of Messrs. Henry H. Hoyt, Jr. and
Scott C. Hoyt to CPI, see "PRINCIPAL STOCKHOLDERS." Henry H. Hoyt, Jr., and
Scott C. Hoyt disclaim that they are beneficial owners of the shares of Common
Stock and of Class B Common Stock owned by CPI.
(6) Includes 9,000 shares of Common Stock and 9,000 shares of Class B
Common Stock, as the case may be, held in trust under the will of Kate Good
Orcutt; Henry H. Hoyt, Jr. is a trustee and a beneficiary of the trust.
(7) Less than .01%.
(8) Does not include 45,768 shares of Common Stock awarded to Ralph Levine
and 45,684 shares awarded to Paul A. Veteri under the Company's Restricted Stock
Award Plan which have not been issued as of the date hereof and are subject to
forfeiture under certain conditions.
Directors will be elected by the affirmative vote of a majority of the
shares entitled to vote in the election. Abstentions and broker non-votes will
have the same effect as negative votes in the election.
5
<PAGE> 8
BOARD OF DIRECTORS AND COMMITTEES
In the fiscal year ended March 31, 1995, the Board of Directors held 11
meetings. The Board of Directors has appointed an Audit Committee, an Executive
Committee, a Nominating Committee and a Compensation Committee.
The Audit Committee, composed of Herbert M. Rinaldi, Chairman, Richard L.
Cruess, M.D. and David M. Baldwin, held 4 meetings in the fiscal year ended
March 31, 1995. The Audit Committee meets with the Company's independent
auditors, the Company's internal audit personnel and other corporate officers on
matters relating to corporate financial reporting and accounting procedures and
policies, the adequacy of the Company's financial, accounting and operational
controls and the scope of the audits of both the independent and internal
auditors, and reviews and reports to the Board of Directors the results of such
audits and its recommendations relating to the appointment of independent
auditors, financial reporting and accounting practices and policies.
The Nominating Committee, composed of David M. Baldwin, Chairman, Richard
L. Cruess, M.D. and Herbert M. Rinaldi met once in the fiscal year ended March
31, 1995. The Nominating Committee identifies and recommends candidates for
election to the Board of Directors. The Nominating Committee will consider
nominees recommended by stockholders. Such nominations for directors to be
elected at the 1996 Annual Meeting of Stockholders should be furnished in
writing to the Secretary of the Company by February 15, 1996 and should indicate
the nominee's name, age and business experience.
The Compensation Committee, composed of Richard L. Cruess, M.D., Chairman,
Herbert M. Rinaldi and David M. Baldwin, met once in the fiscal year ended March
31, 1995. The Compensation Committee is empowered to make recommendations to the
Board with respect to base cash compensation for the two senior officers of the
Company.
All of the Company's directors attended at least 75% of the meetings of the
Board of Directors and of the committees on which they served.
6
<PAGE> 9
EXECUTIVE COMPENSATION AND OTHER INFORMATION
EXECUTIVE COMPENSATION
The Summary Compensation Table shows certain information for the Company's
Chief Executive Officer and each of the four other most highly compensated
executive officers of the Company for services rendered in all capacities during
the fiscal years ended March 31, 1995, 1994 and 1993. The information includes
the dollar value of base salaries, bonus awards and long-term incentive plan
awards and payouts and certain other compensation, if any, whether paid or
deferred.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
-----------------------------
ANNUAL COMPENSATION ALL
------------------------------------------ OTHER
NAME AND FISCAL RESTRICTED COMPENSATION
PRINCIPAL POSITION YEAR SALARY BONUS OTHER(4) STOCK AWARDS (1)(4)
- ------------------------------ ------ -------- -------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Henry H. Hoyt, Jr............. 1995 $978,000 $550,200 $ 80,662(3) -0- $ 40,752
Chairman of the Board, 1994 889,100 666,800 79,766 -0- 36,823
Chief Executive Officer and 1993 808,300 687,100 100,808 -0- 25,432
Director
Daniel J. Black............... 1995 $978,000 $550,200 $ 109,387(3) -0- $ 36,105
President, Chief Operating 1994 889,100 666,800 111,008 -0- 32,176
Officer and Director 1993 808,300 687,100 128,780 -0- 20,784
Ralph Levine.................. 1995 $448,800 $249,500 $ 67,129(3) -0- $ 20,814
Vice President, Secretary, 1994 410,000 308,000 58,596 -0- 20,038
General Counsel and Director 1993 343,750 280,000 87,434 -0- 16,790
Paul A. Veteri................ 1995 $448,400 $249,500 $ 64,064(3) -0- $ 16,362
Vice President, Finance, 1994 410,000 308,000 62,953 -0- 15,586
Chief Financial Officer and 1993 340,100 280,000 57,228 -0- 12,302
Director
Herbert Sosman................ 1995 $437,400 $229,700 $ 71,931(3) -0- $ 23,894
Vice President 1994 405,000 283,500 67,962 -0- 22,881
Pharmaceuticals 1993 375,000 262,500 66,058 -0- 19,469
</TABLE>
- ---------------
(1) Includes Company contributions vested pursuant to the Supplemental
Retirement and Savings Plan and the Executive Pension Benefits Plan and Company
paid premiums in connection with supplemental death benefit agreements with each
executive officer. The vested contributions to the Supplemental Retirement and
Savings Plan and the Executive Pension Benefits Plan for each executive officer
for the fiscal year ended March 31, 1995 are as follows: Henry H. Hoyt, Jr.-
$20,265; Daniel J. Black-$20,265; Ralph Levine-$8,976; Paul A. Veteri-$8,976;
and Herbert Sosman-$9,113. The premiums paid with respect to the supplemental
death benefit agreement for each executive officer for the fiscal year ended
March 31, 1995 are as follows: Henry H. Hoyt, Jr.-$20,487; Daniel J.
Black-$15,840; Ralph Levine-$11,838; Paul A. Veteri-$7,386; and Herbert
Sosman-$14,781.
(2) Henry H. Hoyt, Jr. and Daniel J. Black each received awards of 166,566
shares on May 10, 1990 which vested on May 10, 1995. The market value of these
shares was $1,998,792 on March 31, 1995. Ralph Levine received an award of
45,768 shares on November 22, 1990 which are scheduled to vest on November 22,
1995. The market value of these shares was $549,216 on March 31, 1995. Paul A.
Veteri received an award of 45,684 shares on November 22, 1990 which are
scheduled to vest on November 22, 1995. The market value of these shares was
$548,208 on March 31, 1995. Herbert Sosman received an award of 55,113 shares on
December 18, 1990 which are scheduled to vest on December 18, 1995. The market
value of these shares was $661,356 on March 31, 1995.
7
<PAGE> 10
If there is a change in control of the Company, the shares shall become
fully vested. Dividends accumulated since the date of grant are paid to the
recipient of the award at vesting.
(3) Included in this amount is $25,861, $45,741, $29,260, $24,334 and
$25,625 for Henry H. Hoyt, Jr., Daniel J. Black, Ralph Levine, Paul A. Veteri
and Herbert Sosman, respectively related to withholding taxes paid by the
Company on the employee's behalf.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
COVERED 10 YEARS 20 YEARS 30 YEARS 40 YEARS
COMPENSATION SERVICE SERVICE SERVICE SERVICE
- ----------- -------- -------- -------- ---------
<S> <C> <C> <C> <C>
$300,000 57,122 114,245 172,806 232,806
$400,000 77,122 154,245 232,806 312,806
$500,000 97,122 194,245 292,806 392,806
$600,000 117,122 234,245 352,806 472,806
$700,000 137,122 274,245 412,806 552,806
$800,000 157,122 314,245 472,806 632,806
$900,000 177,122 354,245 532,806 712,806
$1,000,000 197,122 394,245 592,806 792,806
$1,100,000 217,122 434,245 652,806 872,806
$1,200,000 237,122 474,245 712,806 952,806
$1,300,000 257,122 514,245 772,806 1,032,806
$1,400,000 277,122 554,245 832,806 1,112,806
$1,500,000 297,122 594,245 892,806 1,192,806
$1,600,000 317,122 634,245 952,806 1,272,806
</TABLE>
The Employees' Retirement Plan of Carter-Wallace, Inc. (the "Retirement
Plan") is a noncontributory defined benefit plan. The Retirement Plan provides
for a pension payable upon retirement at age 65 in an amount calculated on the
basis of the number of years of credited service and the individual's average
salary during the five consecutive highest paid years in the ten year period
immediately preceding the individual's retirement date. Covered compensation
does not include deferred compensation or other incentive compensation. The
Retirement Plan permits early retirement and deferred retirement under specified
conditions.
The above table shows the estimated annual benefits payable on retirement
to eligible employees, including officers and directors, under the Retirement
Plan as in effect on March 31, 1995. Amounts shown are based on the assumptions
that the Retirement Plan remains in effect without change, and that the
individual receives a straight life benefit with no reduction to allow for
payment to a surviving spouse, as is permitted by the Retirement Plan.
The above computation of benefits assumes continued employment to age 65
and covered compensation as described above. Amounts shown are before applicable
federal and state income taxes payable by the recipient and are net of a portion
of applicable Social Security benefits received. The portion of the benefits
accrued as of September 30, 1980 is subject to annual cost-of-living
adjustments.
Current covered remuneration and credited years of service for purposes of
the Retirement Plan and the Executive Pension Benefits Plan (the "Executive
Pension Plan") for each executive officer named in the Summary Compensation
Table are $1,528,200 and 34 years for Daniel J. Black, $1,528,200 and 43 years
for Henry H. Hoyt, Jr., $698,300 and 31 years for Ralph Levine, $698,300 and 18
years for Paul A. Veteri and $667,100 and 16 years for Herbert Sosman. Amounts
payable under the Retirement Plan may not exceed the limitation imposed by
Section 415 of the Internal Revenue Code (currently $120,000, but subject to
periodic cost-of-living adjustments, or the
8
<PAGE> 11
individual's average covered compensation for his three highest paid years,
whichever is less) and the amount of credited compensation which may be taken
into account in the computation of pension benefits may not exceed the amount
permitted under Section 401(a)(17) of the Code (currently $150,000, subject to
cost-of-living adjustments). Amounts shown in the above table include benefits
in excess of such limitations that are payable under the Executive Pension Plan
described below.
The Executive Pension Plan is an unfunded plan which provides for the
payment of vested pension benefits, which would otherwise be payable under the
Retirement Plan but for the limitations of Sections 415 and 401(a)(17) of the
Code and the exclusion from covered compensation of amounts deferred under the
Executive Savings Plan, and which mitigates the reduction in retirement benefits
of corporate officers who elect early retirement. Corporate officers' covered
compensation used in calculating Executive Pension Plan benefits include accrued
bonuses.
EMPLOYMENT AGREEMENTS
The Company has entered into employment agreements with Mr. Black, Mr.
Sosman, Mr. Levine and Mr. Veteri.
Mr. Black's employment agreement, as amended from time to time, provides
for his employment initially as President and Chief Operating Officer of the
Company at a salary of not less than $1,056,300 per year for a period commencing
April 24, 1992 and continuing for a period of five (5) years from December 31st
of any year in which the Board of Directors desires to terminate Mr. Black's
agreement, and requires the Company to pay the premium on a $500,000 insurance
policy on Mr. Black's life and certain federal, state and city income taxes on
such premium amount and taxes. The employment agreement provides for the Company
to use its best efforts to cause Mr. Black to be elected a director of the
Company.
Mr. Sosman's employment agreement provides for his employment as a Vice
President of the Company and President of the Company's Wallace Laboratories
Division at a salary of not less than $347,200 per year and a bonus to be
determined under the Company's Profit Sharing Plan for a five-year period
commencing October 31, 1987, which has been extended by the Company for an
additional five year period.
Mr. Levine's employment agreement provides for his employment as Vice
President, Secretary and General Counsel of the Company for a period commencing
April 10, 1992 and terminating July 2, 2001. Mr. Veteri's employment agreement
provides for his employment as Vice President, Finance of the Company for a
period commencing April 10, 1992 and continuing for a period of five years from
April 1st of any year in which the Board of Directors desires to terminate Mr.
Veteri's agreement. The cash compensation received by Mr. Levine and Mr. Veteri
pursuant to the employment agreements is included in the amounts disclosed in
the Summary Compensation Table.
COMPENSATION OF DIRECTORS
Directors, other than those who are salaried employees of the Company,
received an annual fee of $35,000 for serving on the Board of Directors and a
fee of $500 for each meeting of the Audit Committee that they attended, but did
not receive a fee for attendance at meetings of the Board of Directors or
meetings of any committee other than the Audit Committee. Directors who are
salaried employees of the Company received a fee of $250 for each meeting of the
Board of Directors that they attended.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During the fiscal year ended March 31, 1995, the Compensation Committee of
the Board of Directors of the Company consisted of Richard L. Cruess, M.D.,
Chairman, Herbert M. Rinaldi and David M. Baldwin. None of such persons was,
during such fiscal year or formerly, an officer of the
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<PAGE> 12
Company or any of its subsidiaries or had any relationship with the Company
other than serving as a director of the Company. In addition, during the fiscal
year ended March 31, 1995, no executive officer of the Company served as a
director or a member of the compensation committee of another entity, one of
whose executive officers served as a Director or on the Compensation Committee
of the Company.
REPORT ON EXECUTIVE COMPENSATION
General
The Company's Compensation Committee, consisting of Messrs. Baldwin, Cruess
and Rinaldi, non-employee Directors of the Company, approves of all policies
governing the compensation of, and the amounts of compensation for, the
company's Chief Executive Officer and its President and Chief Operating Officer.
The form and amount of compensation of the Company's Chief Executive Officer and
its President is then approved by the entire Board of Directors upon the
recommendation of the Compensation Committee. The specific compensation of all
other executive officers is recommended to the Board for its determination by
the Company's Executive Committee. To that extent, this report of the
Compensation Committee is also a report by the entire Board of Directors.
The Company's compensation program for its executive officers consists of
the following significant components: annually determined salary; annually
determined bonus payments pursuant to the Company's Profit Sharing Plan; and
periodic grants of restricted stock units. The elements of the Company's
compensation are designed with different purposes in mind. Salary and bonus
payments are primarily intended to compensate for current and past performance.
The restricted stock units are awarded in an effort to provide a strong
incentive for outstanding long term performance, and are forfeitable generally
if the executive holding the units leaves the Company prior to five years from
the date on which the restricted stock units were awarded or if such executive
is terminated for cause. The awards of restricted stock units are directly tied
to the interests of the Company's shareholders inasmuch as the value of the
awards will increase or decrease based upon the future price of the Company's
stock.
In determining the amount and the form of the executive compensation
package for 1995, the Compensation Committee and the Board (hereinafter referred
to as the "Committee") considered the Company's overall performance over a
number of years rather than considering any single year. The Committee also
considered the objectives the Company desires to achieve in the future as well
as the challenges with which the Company would be confronted. Given this overall
view, the Committee considered several specific factors. They included continued
efforts to develop and market new drugs, continued efforts to license the
Company's products to others and continued efforts to upgrade the Company's
management of its inventory and thus improve the Company's working capital and
cash flow. However, in making the compensation determination, no specific weight
was given to any one factor. Therefore, the compensation determination may be
deemed to be subjective. The Company's Restricted Stock Plan was adopted in
1977. The Committee is of the view that it has been an effective long term
incentive for the Company's officers. In 1995, however, additional grants were
suspended under the plan. The Company has retained a compensation consultant to
assist it in determining whether there is a more cost effective and efficient
method of providing long term incentives for its executive officers which will
also serve to align the interests of the Company's executive officers with that
of its stockholders. The Company expects to receive a report from its consultant
in the near future.
Chief Executive Officer Compensation
The compensation of Henry H. Hoyt, Jr., the Company's Chief Executive
Officer, in 1995 consisted of salary and bonus payments. In determining Mr.
Hoyt's 1995 compensation, the Committee continued its practice of prior years
and granted a merit increase in annual salary of 10% for members of the
Company's Executive Committee, which includes Mr. Hoyt. The merit increase
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<PAGE> 13
philosophy is to set consistent increases in compensation which will retain
superior executives over a period of years, rather than have fluctuating
increases varying with the annual performance of the Company.
The Company believes it has had and continues to have an appropriate
compensation program. Base salaries, adjusted in accordance with the Company's
merit increase philosophy, together with short-term bonus orientation and
emphasis on long-term equity-based incentives constitutes the crucial elements
of the Company's compensation policy.
Submitted by the Company's Board of Directors:
Daniel J. Black Scott C. Hoyt
David M. Baldwin Ralph Levine
Richard L. Cruess, M.D. Herbert M. Rinaldi
Henry H. Hoyt, Jr. Paul A. Veteri
TAX DEDUCTION CONSIDERATIONS
The Compensation Committee has reviewed the Company's compensation plans
with respect to the deduction limitation under the Omnibus Budget Reconciliation
Act of 1993. Since the particular requirements of the Act applicable to elements
of the Company's compensation plans have not yet been definitively determined
and since the Committee believes that the requirements of the Act might
effectively divest the Committee of the ability to exercise its discretion to
act in the best interests of the stockholders in establishing compensation, the
Compensation Committee has decided for the present not to alter the Company's
compensation plans to attempt to meet the deductibility requirements. The
Compensation Committee will revisit this issue and evaluate whether the
compensation plans should be altered in the future to meet the deductibility
requirements.
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PERFORMANCE GRAPH
The following graph compares the yearly change in the cumulative total
shareholder return on the Company's Common Stock for each of the Company's last
five fiscal years with the cumulative total return (assuming reinvestment of
dividends) of (i) the Wilshire 5000 Index and (ii) a peer group of seven
companies within the Company's Standard Industry Codes (SIC) and with market
capitalization similar to the Company.
The Peer Group-Old consists of the following companies: A.L. Laboratories,
Inc. (name changed to A.L. Pharma Inc. effective October 1994), Block Drug
Company, Inc., Neutrogena Corporation, Helene Curtis Industries, Inc., McKesson
Corporation, Ivax Corporation and St. Ives Laboratories. Neutrogena Corporation
and McKesson Corporation were acquired by other corporations during the past
year. They continued to be included in the Peer Group-Old until the last day
they were publicly traded.
The Peer Group-New consists of the same companies as the Peer Group-Old
except that McKesson Corporation and Neutrogena Corporation were acquired by
other corporations during the past year. These two companies have been replaced
by Alberto-Culver Corporation and Del Laboratories, companies within the
Company's Standard Industry Codes (SIC) and with market capitalization similar
to the Company.
<TABLE>
<CAPTION>
Measurement Period Carter- New Peer Old Peer Wilshire
(Fiscal Year Covered) Wallace Group Group 5000
<S> <C> <C> <C> <C>
1990 100.0 100.0 100.0 100.0
1991 118.9 153.3 117.7 109.5
1992 185.6 201.4 150.5 121.1
1993 169.2 191.2 161.8 135.9
1994 128.9 155.8 160.2 136.3
1995 74.1 180.7 235.9 150.5
</TABLE>
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors will recommend at the Meeting that a resolution be
adopted approving and ratifying the appointment by the Board of Directors of the
firm of KPMG Peat Marwick LLP to audit the financial statements of the Company
and its subsidiaries for the current fiscal year. If the stockholders do not
approve and ratify the appointment of KPMG Peat Marwick LLP as independent
auditors, the Board of Directors will consider the selection of another
accounting firm. A representative of KPMG Peat Marwick LLP is expected to be
present at the Meeting, to have an opportunity to make a statement if he desires
to do so and to be available to answer any questions relating to their audit of
the financial statements of the Company for the fiscal year ended March 31,
1995. The fees paid by the Company and its subsidiaries for auditing services to
this firm were
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<PAGE> 15
approximately $810,000 for the fiscal year ended March 31, 1995. See "BOARD OF
DIRECTORS AND COMMITTEES" for information concerning the Company's Audit
Committee.
MANAGEMENT RECOMMENDS A VOTE "FOR" THIS RESOLUTION. PROXIES SOLICITED BY
THE BOARD OF DIRECTORS WILL BE SO VOTED UNLESS STOCKHOLDERS SPECIFY A CONTRARY
VOTE.
STOCKHOLDER PROPOSAL
STOCKHOLDER PROPOSAL WITH RESPECT TO CERTAIN ATTRIBUTES OF INDIVIDUALS TO BE
DIRECTORS
OF THE COMPANY.
Kenneth Steiner, who is the owner of record of 300 shares of Common Stock,
has given notice that he intends to present the following resolution at the
Meeting. The proposed resolution and supporting statement for which The Board of
Directors and the Company accept no responsibility are as follows:
INDEPENDENT BOARD
Whereas the Board of Directors is meant to be an independent body elected
by shareholders charged by law and shareholders with the duty, authority and
responsibility to formulate and direct corporate policies and is to be held to
the highest standards of fiduciary care, duty and loyalty.
Now therefore be it "resolved that the shareholders request that the
Company's Board of Directors be comprised of a truly independent board, meaning
that the majority of the Board will be non-family members and individuals who do
not currently work or consult with the Company, have not been employed by the
Company or have not consulted with the Company in the past."
SUPPORTING STATEMENT
I believe that shareholders will be better served when the majority of the
board is truly independent. Such independent individuals hopefully will bring
true objectivity to serious issues facing our Company.
As matters stand today the members of the Board of Directors are either
family members, individuals who either are employed by, do work for, or have
been employed by the Company in the past. There is an apparent conflict of
interest each time matters concerning executive compensation policies, possible
takeover offers and corporate governance issues arise. I am a founding member of
the Investors Rights Association of America and I believe this is a matter that
is urgent and must be presented to the shareholders for action.
I URGE YOUR SUPPORT. VOTE FOR THIS RESOLUTION.
The affirmative vote of a majority of the votes present, in person or by
proxy, at the Meeting is required to approve the above-described proposal.
Abstentions and broker non-votes will have the same effect as a negative vote
with respect to this matter.
BOARD OF DIRECTORS' STATEMENT IN OPPOSITION
The Board of Directors believes that this proposal would not serve the
Company's best interests and recommends a vote AGAINST it.
The Company has consistently sought to add to its Board of Directors
eminently qualified individuals whom the Company believes would provide
substantial benefit and guidance to the Company. However, the Company finds this
shareholder proposal to be unduly restrictive and wholly inappropriate.
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<PAGE> 16
The proposal seeks to impose "independence" requirements that are broad and
arbitrary. To restrict the election of any individual who has been "employed by
the [C]ompany or has consulted with the [C]ompany in the past" is excessively
broad. An individual who has been previously employed or engaged by the Company
will not necessarily lack the independence and "true objectivity" discussed by
the proponent in the supporting statement. Similarly, it cannot be assumed that
a director who is currently employed by or consults with the Company will not
act with objectivity or in the best interest of the shareholders. Individuals
who have a financial stake in the Company are often well suited to protect and
advance the interests of all shareholders. If the Board of Directors were to
adopt the narrow concept of "independence" set forth in this shareholder
proposal, it would be precluded from seeking as directors many persons who,
through past or present employment or consulting relationships with the Company,
are often the most knowledgeable and familiar with the Company and its
operations and are, thus, in the best position to further the interests of the
Company and its shareholders.
Furthermore, the proposal places limitations on the election of individuals
who have familial ties with members of the Company's management even though such
ties would not necessarily undermine a person's independence or objectivity.
The Board feels that this proposal too narrowly defines the concept of
"independence" as it applies to Directors. The Company believes that it would be
imprudent to adopt and apply the criteria as set forth in the proposal without
evaluating the substance of each relationship in question and the overall
qualifications of a Board nominee. This proposal restricts rather than enhances
the Company's ability to locate the most qualified individuals to serve as
directors. Shareholders ultimately decide on the composition of the Board, and
any shareholder who feels that a particular nominee is not qualified to serve as
a director by reason of lack of independence or objectivity is free to vote as
he or she deems best. The shareholder proposal, if implemented, would merely
limit the freedom of choice presently enjoyed by the Company's shareholders.
For all of the foregoing reasons, the Board of Directors recommends a vote
AGAINST this Proposal.
PROXIES SOLICITED BY THE BOARD OF DIRECTORS WILL BE VOTED AGAINST THE
RESOLUTION UNLESS STOCKHOLDERS SPECIFY A CONTRARY VOTE.
OTHER BUSINESS
It is not intended to present to the Meeting any business other than the
election of directors and the proposals referred to above. The Board of
Directors is not aware of any other matters which may be presented for action at
the Meeting. If any other matters should be presented, the persons named as
proxies will vote on such matters in accordance with their best judgment.
STOCKHOLDER PROPOSALS
Stockholder proposals for presentation at the Company's 1996 Annual Meeting
of Stockholders must be received in writing by the Secretary of the Company at
the Company's executive offices, 1345 Avenue of the Americas, New York, New York
10105, not later than February 10, 1996 in order to be considered for inclusion
in the Company's Proxy Statement and form of proxy.
MISCELLANEOUS
The solicitation of proxies will be by mail and the cost will be borne by
the Company. The Company will request banks, brokers and other nominees,
custodians and fiduciaries to forward proxy material to beneficial owners and to
seek authorization for the execution of proxies, and the Company will reimburse
them for their expense in this connection.
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<PAGE> 17
A COPY OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR
ENDED MARCH 31, 1995 (WITHOUT EXHIBITS) AS FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION WILL BE MADE AVAILABLE WITHOUT CHARGE TO ANY STOCKHOLDER
UPON WRITTEN REQUEST ADDRESSED TO RALPH LEVINE, SECRETARY, AT THE COMPANY'S
PRINCIPAL EXECUTIVE OFFICES, CARTER-WALLACE, INC., 1345 AVENUE OF THE AMERICAS,
NEW YORK, NEW YORK 10105.
BY ORDER OF THE BOARD OF DIRECTORS
RALPH LEVINE,
Secretary
New York, New York
June 19, 1995
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<PAGE> 18
PROXY
CARTER-WALLACE, INC.
ANNUAL MEETING OF STOCKHOLDERS, JULY 18, 1995
HOTEL DUPONT, 11TH AND MARKET STREETS, WILMINGTON, DELAWARE 19801
This Proxy is solicited on behalf of the Board of Directors
The undersigned hereby appoints HENRY H. HOYT, JR. and DANIEL J. BLACK,
and either of them, as proxies with full power of substitution, to represent
and to vote all shares of Stock of Carter-Wallace, Inc. which the undersigned
is entitled to vote at the Annual Meeting of Stockholders to be held on July
18, 1995, and all adjournments thereof, as designated on the reverse side of
this Proxy.
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
Shares represented by this Proxy will be voted as specified. If no
specification is made, this Proxy will be voted FOR Proposals (1), (2) and
AGAINST Proposal (3).
(Continued and to be dated and signed on the reverse side)
Carter-Wallace Inc.
P.O. Box 11068
New York, N.Y. 10203-0068
(1) Election of Directors:
[ ] FOR, NOMINEES LISTED BELOW
[ ] WITHHOLD AUTHORITY TO VOTE FOR ALL NOMINEES LISTED BELOW
[ ] EXCEPTIONS
D.J. Black, D.M. Baldwin, R.L. Cruess, M.D., H.H. Hoyt,Jr., S.C. Hoyt, Jr.
R. Levine, H.M. Rinaldi, P.A. Veteri
(INSTRUCTION: To withhold authority to vote for an individual nominee, write
that nominee's name on the line below.)
Exception
-------------------------------------------------------------------
(2) Proposal to ratify the appointment of KPMG Peat Marwick as independent
auditors for the Company for the current fiscal year.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(4) Proposal made by stockholder relating to certain attributes of individuals
to be directors of the Company.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
(Please sign exactly as name appears. If stock is registered in two names,
both should sign.)
Dated: , 1995
---------------------------
Signed:
---------------------------------
---------------------------------
VOTES MUST BE INDICATED [X] IN BLUE OR BLACK INK.
SIGN, DATED AND RETURN THE PROXY CARD PROMPTLY USING THE ENCLOSED ENVELOPE.
