UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 1-3215
JOHNSON & JOHNSON
(Exact name of registrant as specified in its charter)
NEW JERSEY 22-1024240
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
New Brunswick, New Jersey 08933
(Address of principal executive offices, including zip code)
908-524-0400
Registrant's telephone number, including area code
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date.
On July 26, 1996, 1,332,644,572 shares of Common Stock, $1.00
par value, were outstanding.
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JOHNSON & JOHNSON AND SUBSIDIARIES
TABLE OF CONTENTS
Part I - Financial Information Page No.
Consolidated Balance Sheet -
June 30, 1996 and December 31, 1995 3
Consolidated Statement of Earnings for the
Fiscal Quarter Ended June 30, 1996 and
July 2, 1995 5
Consolidated Statement of Earnings for the
Fiscal Six Months Ended June 30, 1996 and
July 2, 1995 6
Consolidated Statement of Cash Flows for the
Fiscal Six Months Ended June 30, 1996 and
July 2, 1995 7
Notes to Consolidated Financial Statements 8
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 11
Signatures 17
Part II - Other Information
Item 4 - Submission of Matters to a
Vote of Security Holders 15
Item 6 - Exhibits and Reports on Form 8-K 16
Items 1, 2, 3 and 5 are not applicable
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Part I - FINANCIAL INFORMATION
Item 1 - FINANCIAL STATEMENTS
JOHNSON & JOHNSON AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Unaudited; Dollars in Millions)
ASSETS
June 30, December 31,
1996 1995
Current Assets:
Cash and cash equivalents $ 1,860 1,201
Marketable securities 98 163
Accounts receivable, trade, less
allowances $272 (1995 - $258) 3,380 2,903
Inventories (Note 3) 2,506 2,276
Deferred taxes on income 668 717
Prepaid expenses and other
receivables 732 678
Total current assets 9,244 7,938
Marketable securities, non-current 287 338
Property, plant and equipment, at cost 8,584 8,175
Less accumulated depreciation and
amortization 3,335 2,979
5,249 5,196
Intangible assets, net (Note 4) 2,913 2,950
Deferred taxes on income 358 307
Other assets 1,254 1,144
Total assets $ 19,305 17,873
See Notes to Consolidated Financial Statements
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JOHNSON & JOHNSON AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Unaudited; Dollars in Millions)
LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, December 31,
1996 1995
Current Liabilities:
Loans and notes payable $ 260 321
Accounts payable 1,360 1,602
Accrued liabilities 2,122 1,949
Accrued salaries, wages and commissions 395 292
Taxes on income 262 224
Total current liabilities 4,399 4,388
Long-term debt 2,101 2,107
Deferred tax liability 161 156
Certificates of extra compensation 88 86
Other liabilities 2,316 2,091
Stockholders' Equity:
Preferred stock - without par value
(authorized and unissued 2,000,000
shares) - -
Common stock - par value $1.00 per share
(authorized 2,160,000,000 shares;
issued 1,534,823,000 shares) 1,535 1,535
Note receivable from employee stock
ownership plan (57) (64)
Cumulative currency translation
adjustments (37) 148
Retained earnings 10,296 9,743
11,737 11,362
Less common stock held in treasury,
at cost (201,610,000 & 239,465,000
shares) 1,497 2,317
Total stockholders' equity 10,240 9,045
Total liabilities and stockholders'
equity $19,305 17,873
See Notes to Consolidated Financial Statements
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JOHNSON & JOHNSON AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
(Unaudited; dollars & shares in millions
except per share figures)
Fiscal Quarter Ended
June 30, Percent July 2, Percent
1996 to Sales 1995 to Sales
Sales to customers (Note 5) $5,382 100.0 4,762 100.0
Cost of products sold 1,732 32.2 1,562 32.8
Selling, marketing and
administrative expenses 2,027 37.7 1,857 39.0
Research expense 448 8.3 380 8.0
Interest income (33) (.6) (33) (.7)
Interest expense, net of
portion capitalized 30 .5 38 .8
Other expense 59 1.1 27 .5
4,263 79.2 3,831 80.4
Earnings before provision
for taxes on income 1,119 20.8 931 19.6
Provision for taxes on
income (Note 2) 328 6.1 270 5.7
NET EARNINGS $ 791 14.7 661 13.9
NET EARNINGS PER SHARE $ .60 .51
CASH DIVIDENDS PER SHARE $ .19 .165
AVG. SHARES OUTSTANDING 1,332.9 1,291.1
See Notes to Consolidated Financial Statements
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JOHNSON & JOHNSON AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EARNINGS
(Unaudited; dollars & shares in millions
except per share figures)
Fiscal Six Months Ended
June 30, Percent July 2, Percent
1996 to Sales 1995 to Sales
Sales to customers (Note 5)$10,716 100.0 9,258 100.0
Cost of products sold 3,451 32.2 3,009 32.5
Selling, marketing and
administrative expenses 4,023 37.6 3,577 38.7
Research expense 876 8.2 733 7.9
Interest income (63) (.6) (51) (.6)
Interest expense, net of
portion capitalized 65 .6 83 .9
Other expense 121 1.1 55 .6
8,473 79.1 7,406 80.0
Earnings before provision
for taxes on income 2,243 20.9 1,852 20.0
Provision for taxes on
income (Note 2) 662 6.1 537 5.8
NET EARNINGS $ 1,581 14.8 1,315 14.2
NET EARNINGS PER SHARE $ 1.19 1.02
CASH DIVIDENDS PER SHARE $ .355 .31
AVG. SHARES OUTSTANDING 1,332.8 1,289.0
See Notes to Consolidated Financial Statements
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JOHNSON & JOHNSON AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited; Dollars in Millions)
Fiscal Six Months Ended
June 30, July 2,
1996 1995
CASH FLOWS FROM OPERATING ACTIVITIES
Net earnings $1,581 1,315
Adjustments to reconcile net earnings to
cash flows:
Depreciation and amortization of
property and intangibles 492 404
Increase in accounts receivable, trade,
less allowances (417) (407)
Increase in inventories (241) (78)
Changes in other assets and liabilities 228 41
NET CASH FLOWS FROM OPERATING ACTIVITIES 1,643 1,275
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment (495) (472)
Proceeds from the disposal of assets 12 443
Acquisition of businesses, net of
cash acquired - (70)
Other, principally marketable securities 154 (2)
NET CASH USED BY INVESTING ACTIVITIES (329) (101)
CASH FLOWS FROM FINANCING ACTIVITIES
Dividends to stockholders (467) (400)
Repurchase of common stock (174) (129)
Proceeds from short-term debt 100 151
Retirement of short-term debt (78) (475)
Proceeds from long-term debt - 5
Retirement of long-term debt (100) (8)
Proceeds from the exercise of stock
options 82 59
NET CASH USED BY FINANCING
ACTIVITIES (637) (797)
EFFECT OF EXCHANGE RATE CHANGES ON CASH
AND CASH EQUIVALENTS (18) 28
INCREASE IN CASH AND CASH EQUIVALENTS 659 405
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD1,201 636
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,860 1,041
ACQUISITIONS OF BUSINESSES
Fair value of assets acquired $ - 382
Fair value of liabilities assumed - (12)
- 370
Treasury stock issued - (300)
Net cash payment $ - 70
See Notes to Consolidated Financial Statements
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - The accompanying interim financial statements and related
notes should be read in conjunction with the Consolidated Financial
Statements of Johnson & Johnson and Subsidiaries (the "Company")
and related notes as contained in the Annual Report on Form 10-K
for the fiscal year ended December 31, 1995. The interim financial
statements include all adjustments (consisting only of normal
recurring adjustments) and accruals necessary in the judgment of
management for a fair presentation of such statements. Earnings
per share were calculated on the basis of the weighted average
number of shares of common stock outstanding during the applicable
period. Earnings per share figures and shares outstanding reflect
the two-for-one stock split effective during the second quarter of
1996. Certain prior year amounts have been reclassified to conform
with current year presentation.
NOTE 2 - INCOME TAXES
The effective income tax rates for 1996 and 1995 are as follows:
1996 1995
First Quarter 29.7% 29.0%
Second Quarter 29.3 29.0
First Half 29.5 29.0
The effective income tax rates for the first half of 1996 and 1995
are 29.5% and 29.0%, respectively, as compared to the U.S. federal
statutory rate of 35%. The difference from the statutory rate is
primarily the result of domestic subsidiaries operating in Puerto
Rico under a grant for tax relief expiring on December 31, 2007 and
the result of subsidiaries manufacturing in Ireland under an
incentive tax rate expiring on December 31, 2010. The increase in
the 1996 worldwide effective tax rate was primarily due to an
increase in income subject to tax in the U.S. The Omnibus Budget
Reconciliation Act of 1993 includes a change in the tax code which
will reduce the benefit the Company receives from its operations in
Puerto Rico by 60% gradually over a five year period.
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NOTE 3 - INVENTORIES
(Dollars in Millions) June 30, 1996 Dec. 31, 1995
Raw materials and supplies $ 622 625
Goods in process 548 519
Finished goods 1,336 1,132
$ 2,506 2,276
NOTE 4 - INTANGIBLE ASSETS
(Dollars in Millions) June 30, 1996 Dec. 31, 1995
Intangible assets $ 3,356 3,345
Less accumulated amortization 443 395
$ 2,913 2,950
The excess of the cost over the fair value of net assets of
purchased businesses is recorded as goodwill and is amortized on a
straight-line basis over periods of 40 years or less.
The cost of other acquired intangibles is amortized on a
straight-line basis over their estimated useful lives.
NOTE 5 - SALES TO CUSTOMERS BY SEGMENT OF BUSINESS AND GEOGRAPHIC
AREAS
(Dollars in Millions)
SALES BY SEGMENT OF BUSINESS
Second Quarter Six Months
Percent Percent
1996 1995 Increase 1996 1995 Increase
Consumer
Domestic $ 717 685 4.7 1,542 1,414 9.1
International 827 784 5.5 1,621 1,491 8.7
1,544 1,469 5.1% 3,163 2,905 8.9%
Pharmaceutical
Domestic 823 659 24.9 1,615 1,266 27.6
International 985 961 2.5 1,955 1,837 6.4
1,808 1,620 11.6% 3,570 3,103 15.0%
Professional
Domestic 1,097 886 23.8 2,132 1,726 23.5
International 933 787 18.6 1,851 1,524 21.5
2,030 1,673 21.3% 3,983 3,250 22.6%
Domestic 2,637 2,230 18.3 5,289 4,406 20.0
International 2,745 2,532 8.4 5,427 4,852 11.9
Worldwide $5,382 4,762 13.0% 10,716 9,258 15.7%
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NOTE 5 - SALES TO CUSTOMERS BY SEGMENT OF BUSINESS AND GEOGRAPHIC
AREAS
SALES BY GEOGRAPHIC AREAS
Second Quarter Six Months
Percent Percent
1996 1995 Increase 1996 1995 Increase
U.S. $2,637 2,230 18.3 5,289 4,406 20.0
Europe 1,605 1,492 7.6 3,192 2,848 12.1
Western Hemisphere
excluding U.S. 464 422 10.0 928 828 12.1
Asia-Pacific,
Africa 676 618 9.4 1,307 1,176 11.1
Total $5,382 4,762 13.0% 10,716 9,258 15.7%
NOTE 6 - MERGER
On February 23, 1996, Johnson & Johnson and Cordis Corporation
completed the previously announced merger between the two
companies. The number of Johnson & Johnson shares issued in the
merger for each Cordis share is the result of dividing $109 by the
average of the closing prices per Johnson & Johnson share for the
10 trading days prior to the closing of the merger. This resulted
in an exchange ratio of 1.1292 shares of Johnson & Johnson stock
for each share of Cordis stock. The merger has a total value, net
of cash, of approximately $1.8 billion. Cordis had approximately
17.6 million shares outstanding on a fully diluted basis. The
merger has been accounted for as a pooling of interests, however,
prior period financial statements have not been restated as the
effect of reflecting data relating to this merger would not
materially affect previously issued financial statements.
Cordis is a leader in angiography and angioplasty (balloon
catheters). The combination of Cordis and Johnson & Johnson's
interventional cardiology business is an important strategic step
for both companies to meet the challenge of providing for customer
needs in the fast changing healthcare industry.
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Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SALES AND EARNINGS
Consolidated sales for the first six months of 1996 of $10,716
million exceeded sales of $9,258 million for the first six months
of 1995 by 15.7%. The strength of the U.S. dollar relative to the
foreign currencies decreased sales for the first six months of 1996
by 1.7%. The sales increase of 17.4% due to operations included
a positive price change effect of .4%. Consolidated net earnings
for the first six months of 1996 were $1,581 million, compared with
net earnings of $1,315 million for the first six months of 1995.
Earnings per share for the first six months of 1996 were $1.19,
compared with $1.02 for the same period a year ago. Net earnings
and earnings per share rose 20.2% and 16.7%, respectively.
Consolidated sales for the second quarter of 1996 were $5,382
million, an increase of 13.0% over 1995 second quarter sales of
$4,762 million. The effect of the stronger U.S. dollar relative to
foreign currencies decreased second quarter sales by 3.1%, while
price changes contributed .2%. Consolidated net earnings for the
second quarter of 1996 were $791 million, compared with $661
million for the same period a year ago, an increase of 19.7%.
Earnings per share for the second quarter of 1996 rose 17.6% to
$.60, compared with $.51 in the 1995 period.
Domestic sales for the first six months of 1996 were $5,289
million, an increase of 20.0% over 1995 domestic sales of $4,406
million for the same period a year ago. Sales by international
subsidiaries were $5,427 million for the first six months of 1996
compared with $4,852 million for the same period a year ago, an
increase of 11.9%. Excluding the impact of the stronger value of
the dollar, international sales increased by 15.1%.
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Worldwide consumer sales of $1.5 billion for the second quarter
represented an increase of 5.1%. Growth was led by the NEUTROGENA
line of adult skin and hair care products; PEPCID AC Acid
Controller, a product of Johnson & Johnson o Merck Consumer
Pharmaceuticals Co.; and the TYLENOL line of acetaminophen-based
analgesic and cold products.
On July 3, the Company received marketing clearance from the Food
and Drug Administration for NICOTROL, the first nicotine
transdermal patch to become available for sale directly to
consumers without a prescription. The decision to make NICOTROL
patches available without a prescription follows the FDA's
marketing clearance in March of this year for NICOTROL NS, a
unique prescription nicotine nasal spray designed to reduce
nicotine withdrawal symptoms and help smokers quit, when used as
part of a comprehensive smoking cessation program.
Another new consumer product recently approved by the Food and
Drug Administration is MONISTAT 3. This three-day miconazole
nitrate treatment, which cures most vaginal yeast infections, will
offer a shorter course of treatment. MONISTAT continues to be the
number one doctor-recommended cure. Currently, vaginal yeast
infections affect more than 13 million women each year in the
United States. Three quarters of women will experience at least
one vaginal yeast infection during their lifetime.
Worldwide pharmaceutical sales of $1.8 billion for the quarter
increased 11.6%, with domestic sales growing 24.9%. Leading the
increase in pharmaceutical sales growth were RISPERDAL, an
antipsychotic medication; ULTRAM, a centrally acting prescription
pain reliever; PROCRIT, for the treatment of anemia; and SPORANOX,
a broad spectrum antifungal medication. SPORANOX, recently
- 12 -<PAGE>
approved for a new indication, onychomycosis, is the first advance
in treating fungal nail disease in three decades. Since its launch
for that indication last fall, SPORANOX has generated excellent
positive feedback from primary care physicians, dermatologists and
podiatrists.
Worldwide sales of $2.0 billion in the Professional segment
represented an increase of 21.3% over the second quarter in 1995.
Strong sales growth benefited from the merger with Cordis as well
as the continuing, rapid professional acceptance of the PALMAZ-
SCHATZ Coronary Stent, due to its efficacy in reducing the
incidence of recurring blockage of coronary arteries following
balloon angioplasty. LifeScan's blood glucose monitoring systems,
Vistakon's ACUVUE disposable contact lenses, Johnson & Johnson
Professional's orthopaedic implants, and Ethicon Endo-Surgery's
minimally invasive surgical instruments continued to deliver solid
performance.
Average shares of common stock outstanding in the first half of
1996 were 1.3 billion, an increase of 43.8 million over the prior
year, due to the 37.2 million shares issued for the Cordis merger
in 1996 and the balance for various acquisitions using common stock
during 1995. Earnings per share figures and shares outstanding
reflect the two-for-one stock split effective during the second
quarter of 1996.
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LIQUIDITY AND CAPITAL RESOURCES
Net debt (borrowings net of cash and current marketable
securities) as of June 30, 1996 was 3.8% of net capital
(stockholders' equity and net debt) compared with 10.5% at the end
of 1995. Net debt decreased by $661 million during the first six
months of 1996 to $403 million at June 30, 1996. Total debt
represented 18.7% of total capital (stockholders' equity and total
borrowings) at quarter end, compared with 21.2% at the end of 1995.
Additions to property, plant and equipment were $495 million for
the first six months of 1996, compared with $472 million for the
same period in 1995.
On July 15, 1996, the Board of Directors approved a regular
quarterly dividend of 19 cents per share payable on September 10,
1996 to shareholders of record as of August 20, 1996.
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Part II - Other Information
Item 4. Submission of Matters to a Vote of Security Holders
(a) The annual meeting of the stockholders of
the Company was held on April 25, 1996.
(b) The Stockholders elected all the Company's
nominees for director, approved the Johnson
& Johnson Executive Plan and approved the
appointment of Coopers & Lybrand L.L.P. as
the Company's independent auditors for
1996. The votes were as follows:
1. Election of Directors:
For Withheld
J. W. Black 576,238,632 6,937,997
G. N. Burrow 580,937,697 2,238,932
J. G. Cooney 580,541,854 2,634,775
J. G. Cullen 580,511,044 2,665,585
P. M. Hawley 576,591,469 6,585,160
C. H. Johnson 580,415,700 2,760,929
A. D. Jordan 580,839,786 2,336,843
A. G. Langbo 580,811,187 2,365,442
R. S. Larsen 580,489,845 2,686,784
J. S. Mayo 580,916,509 2,260,120
T. S. Murphy 580,445,094 2,731,535
P. J. Rizzo 580,521,442 2,655,187
M. F. Singer 580,845,027 2,331,602
R. B. Smith 578,488,105 4,688,524
R. N. Wilson 580,484,143 2,692,486
2. Approval of the Johnson & Johnson
Executive Incentive Plan:
For 557,946,808
Against 18,492,437
Abstain 6,737,384
3. Approval of Appointment of Coopers & Lybrand L.L.P.
For 579,948,067
Against 1,433,477
Abstain 1,795,085
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<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit Numbers
(1) Exhibit 3 - Restated Certificate of
Incorporation of the Company as last amended on
May 21, 1996.
(2) Exhibit 11 - Calculation of Earnings Per Share
(3) Exhibit 27 - Financial Data Schedule
(b) Reports on Form - 8-K:
The Company did not file any reports on Form 8-K during
the three month period ended June 30, 1996.
A copy of any of the exhibits listed above will be provided without
charge to any stockholder submitting a written request specifying
the desired exhibit(s) to the Secretary at the principal executive
offices of the Company.
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<PAGE>
SIG NATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
JOHNSON & JOHNSON
(Registrant)
Date: August 9, 1996 By C. H. Johnson
C. H. Johnson
(Vice President, Finance)
Date: August 9, 1996 By J. H. Heisen
J. H. Heisen
(Corporate Controller)
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<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-29-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,860
<SECURITIES> 98
<RECEIVABLES> 3,652
<ALLOWANCES> 272
<INVENTORY> 2,506
<CURRENT-ASSETS> 9,244
<PP&E> 8,584
<DEPRECIATION> 3,335
<TOTAL-ASSETS> 19,305
<CURRENT-LIABILITIES> 4,399
<BONDS> 0
<COMMON> 1,535
0
0
<OTHER-SE> 8,705
<TOTAL-LIABILITY-AND-EQUITY> 19,305
<SALES> 10,716
<TOTAL-REVENUES> 0
<CGS> 3,451
<TOTAL-COSTS> 3,451
<OTHER-EXPENSES> 876
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 65
<INCOME-PRETAX> 2,243
<INCOME-TAX> 662
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,581
<EPS-PRIMARY> 1.19
<EPS-DILUTED> 1.16
</TABLE>
Exhibit 3
Johnson & Johnson
Restated Certificate of Incorporation
Filed with the Secretary of State of New Jersey
April 26, 1990
Amended
May 20, 1992
May 21, 1996
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<PAGE>
Exhibit 3
RESTATED CERTIFICATE OF INCORPORATION OF
JOHNSON & JOHNSON
Pursuant to Section 14A:9-5 of the New Jersey Business
Corporation Act, Johnson & Johnson restates, and integrates
its Certificate of Incorporation, as heretofore amended and
restated, to read as follows.
FIRST : The name of the Corporation is "Johnson & Johnson".
SECOND : The address of the Corporation's registered office is
One Johnson & Johnson Plaza, New Brunswick, New Jersey 08933.
The name of the Corporation's registered agent at such address
is J. T. Woodward III.
THIRD : The purpose for which the Corporation is organized is:
To engage in any activity within the purposes for which
corporations may be organized under the New Jersey Business
Corporation Act.
FOURTH : The aggregate number of shares of all classes of
stock which the Corporation has authority to issue is Two Billion
One Hundred Sixty Two Million (2,162,000,000), divided into Two
Million (2,000,000) shares of Preferred Stock without par value and
Two Billion One Hundred Sixty Million (2,160,000,000) shares of
Common Stock of the par value of One Dollar ($1.00) each. The
shares of any class of stock of the Corporation may be issued from
time to time in such manner and for such lawful consideration as
may from time to time be fixed by the Board of Directors and, in
the case of shares of Preferred Stock, the Board of Directors shall
have discretion to determine what portion of the consideration
received for such shares to allocate to capital surplus.
The designation, preferences and voting and other rights of
and restrictions and limitations on the Preferred Stock and the
Common Stock of the Corporation shall be as follows:
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<PAGE>
Exhibit 3
A. PREFERRED STOCK :
The Preferred stock may be issued from time to time by the
Board of Directors in any amounts as Preferred Stock of one or more
series, as hereinafter set forth, provided that no more than
2,000,000 shares of Preferred stock may at any one time be
outstanding. Upon the creation of any such series, the
designation, rights, preferences, limitations, description and
terms thereof, and number of shares therein, shall, subject to the
terms of this Article FOURTH, be set forth in an amendment of the
Certificate of Incorporation of the Corporation which the Board of
Directors is hereby expressly authorized to make in accordance with
the laws of the State of New Jersey. In particular, and without
limiting the general power to provide for such other rights,
preferences and priorities (not inconsistent with the Corporation's
Certificate of Incorporation) as may be permitted to be fixed under
the laws of the State of New Jersey as in effect at the time of the
creation of any such series, the Board of Directors of the
Corporation is hereby expressly authorized to create and provide
for the issuance of series of Preferred Stock:
(a) entitling the holders thereof to cumulative, non-
cumulative or partially cumulative dividends;
(b) entitling the holders thereof to receive dividends payable
on a parity with, or in preference to, the dividends payable on any
other class or series of capital stock of the Corporation;
(c) entitling the holders thereof to preferential rights upon
the liquidation of, or upon any distribution of the assets of, the
Corporation;
(d) convertible, at the option of the holder or of the
Corporation or both, into shares of any other class or classes of
capital stock of the Corporation or of any series of the same or
any other class or classes;
(e) redeemable, the whole or in part, at the option of the
Corporation, in cash, bonds or other property, at such price or
prices, within such period or periods, and under such conditions as
the Board of Directors shall so provide, including provision for
the creation of a sinking fund for the redemption thereof; and
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<PAGE>
Exhibit 3
(f) lacking voting rights or having limited voting rights or
enjoying special or multiple voting rights.
The Board of Directors may change the designation, rights,
preferences, limitations, description and terms of, and number of
shares in, any series as to which no shares have theretofore been
issued.
B. COMMON STOCK :
All shares of the Corporation's capital stock outstanding at
the time that this Restated Certificate of Incorporation shall
become effective shall thereupon be designated Common Stock of the
Corporation. The holders of Common Stock of the Corporation shall
be entitled to one vote per share of Common Stock on all matters
which may be submitted to the holders of Common Stock of the
Corporation.
C. GENERAL :
No holder of any stock of the Corporation of any class now or
hereafter authorized shall have any right as such holder (other
than such right, if any, as the Board of Directors in its
discretion may determine) to purchase, subscribe for or otherwise
acquire any shares of stock of the Corporation of any class now or
hereafter authorized, or any part-paid receipts or allotment
certificates in respect of any such shares, or any securities
convertible into or exchangeable for any such shares, or any
warrants or other instruments evidencing rights or options to
subscribe for, purchase or otherwise acquire any such shares,
whether such shares, receipts, certificates, securities, warrants
or other instruments be unissued or issued and thereafter acquired
by the Corporation.
Subject to the foregoing provisions of this Article FOURTH,
the Board of Directors shall have the power in its discretion to
declare and pay dividends upon the shares of stock of the
Corporation of any class out of any assets of the Corporation
lawfully available for the payment of dividends. Anything in this
Certificate of Incorporation to the contrary notwithstanding, no
holder of any share of stock of the Corporation of any class shall
have any right to any dividend thereon unless such dividend shall
have been declared by the Board of Directors as aforesaid.
- 21 -<PAGE>
Exhibit 3
The Board of Directors shall have the power to provide for the
issuance by any subsidiary company of (i) capital stock or bonds or
other obligations convertible, at the option of the holder, such
subsidiary company and/or the Corporation, into shares of any class
or classes or of any series of any class or classes of capital
stock of the Corporation, or (ii) any other right or option to
acquire such shares, all upon such terms as may be fixed by the
Board of Directors. As used herein, the term "subsidiary company"
shall mean any corporation in which the Corporation holds, directly
or indirectly, at least a majority of the outstanding voting stock.
FIFTH : The number of Directors constituting the Board of
Directors of the Corporation current at the time of this
restatement of the Certificate of Incorporation is fifteen. The
address of each Director is One Johnson & Johnson Plaza, New
Brunswick, New Jersey 08933, and their names are as follows:
James W. Black
Robert E. Campbell
Joan G. Cooney
Clifton C. Garvin, Jr.
Philip M. Hawley
John J. Heldrich
Clark H. Johnson
Ann D. Jordan
Ralph S. Larsen
Robert Q. Marston
John S. Mayo
Thomas S. Murphy
Paul J. Rizzo
Roger B. Smith
Robert N. Wilson
Any directorship to be filled by reason of an increase in the
number of Directors may be filled by election by a majority of the
Directors then in office.
- 22 -
<PAGE>
Exhibit 3
SIXTH : The Board of Directors shall have power to make,
alter, amend and repeal By-Laws of the Corporation, subject to the
reserved power of the stockholders to alter or repeal By-Laws made
by the Board.
SEVENTH : Proposed amendments to the Certificate of
Incorporation of the Corporation shall be adopted upon receiving
the affirmative vote of a majority of the votes cast by the holders
of shares entitled to vote thereon and, in addition, if any class
or series of shares is entitled to vote thereon as a class, the
affirmative vote of a majority of the votes cast in each class
vote.
EIGHTH : The vote of stockholders of the Corporation required
to approve Business Combinations (as hereinafter defined) shall be
as set forth in this Article EIGHTH.
A. In addition to any affirmative vote required by law or
this Restated Certificate of Incorporation or the By-Laws of the
Corporation, and except as otherwise expressly provided in Section
B of this Article EIGHTH, a Business Combination shall require (i)
the affirmative vote of not less than eighty percent (80%) of the
votes entitled to be cast by the holders of all then outstanding
shares of Voting Stock (as hereinafter defined), voting together as
a single class and (ii) the affirmative vote of a majority of the
combined votes entitled to be cast by Disinterested Stockholders
(as hereinafter defined), voting together as a single class. Such
affirmative vote shall be required notwithstanding the fact that no
vote may be required, or that a lesser percentage or separate class
vote may be specified, by law or in any agreement with national
securities exchange or otherwise.
B. The provisions of Section A of this Article EIGHTH
shall not be applicable to any particular Business Combination, and
such Business Combination shall require only such affirmative vote,
if any, as is required by law or by any other provision of this
Restated Certificate of Incorporation or the By-Laws of the
Corporation, or any agreement with any national securities
exchange, if all of the conditions specified in either of the
following Paragraphs (1) or (2) are met:
- - 23 -
<PAGE>
Exhibit 3
(1) The Business Combination shall have been approved by a majority
of the Continuing Directors (as hereinafter defined), whether such
approval is made prior to or subsequent to the acquisition of
beneficial ownership of the Voting Stock that caused the Interested
Stockholder (as hereinafter defined) to become an Interested
Stockholder.
(2) All of the following conditions shall have been met:
(a) The aggregate amount of cash and the Fair Market
Value (as hereinafter defined) as of the date of the
consummation of the Business Combination of consideration
other than cash to be received per share by holders of Common
Stock in such Business Combination shall be at least equal to
the highest amount determined under clauses (i), (ii) and
(iii) below:
(i) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes and
soliciting dealers' fees) offered or paid by or on behalf
of the Interested Stockholder of beneficial ownership of
shares of Common Stock within the two-year period
immediately prior to or on or after the first public
announcement of the proposed Business Combination (the
"Announcement Date") or within the two-year period
immediately prior to the date on which the Interested
Stockholder became an Interested Stockholder (the
"Determination Date"), whichever is higher;
(ii) the Fair Market Value per share of Voting Stock
on the Announcement Date or on the Determination Date,
whichever is higher; and
(iii) The Corporation's earnings per share of Common
Stock for the four full consecutive fiscal quarters
immediately preceding the Announcement Date, multiplied
by the higher of the then price/earnings multiple (if
any) of such Interested Stockholder or the highest
price/earnings multiple of the Corporation within the
two-year period immediately preceding the Announcement
Date (such price/earnings multiples being determined as
customarily computed and reported in the financial
community);
- - 24 -
<PAGE>
Exhibit 3
(b) The aggregate amount of cash and the Fair Market
Value as of the date of the consummation of the Business
Combination of consideration other than cash to be received
per share by holders of shares of any class or series of
outstanding Capital Stock (as hereinafter defined), other than
Common Stock, shall be at least equal to the highest amount
determined under clauses (i), (ii) and (iii) below:
(i) (if applicable) the highest per share price
(including any brokerage commissions, transfer taxes and
soliciting dealers' fees) offered or paid by or on behalf
of the Interested Stockholder for any share of such class
or series of Capital Stock in connection with the
acquisition by the Interested Stockholder of beneficial
ownership of shares of such class or series of Capital
Stock within the two-year period immediately prior to or
on or after the Announcement Date or within the two-year
period immediately prior to the Determination Date,
whichever is higher;
(ii) the Fair Market Value per share of such class
or series of Capital Stock on the Announcement Date or on
the Determination Date, whichever is higher; and
(iii) (if applicable) the highest preferential
amount per share to which the holders of shares of such
class or series of Capital Stock would be entitled in the
event of any voluntary or involuntary liquidation,
dissolution or winding up of the affairs of the
Corporation regardless of whether the Business
Combination to be consummated constitutes such an event.
The provisions of this Sub-Paragraph (2)(b) shall be
required to be met with respect to every class or series of
outstanding Capital Stock, other than Common Stock, whether or
not the Interested Stockholder has previously acquired
beneficial ownership of any shares of a particular class or
series of Capital Stock.
- - 25 -
<PAGE>
Exhibit 3
(c) The consideration to be received by holders of a
particular class or series of outstanding Capital Stock shall
be in cash or in the same form as previously had been paid by
or on behalf of the Interested Stockholder in connection with
its direct or indirect acquisition of beneficial ownership of
shares of such class or series of Capital Stock. If the
consideration so paid for shares of any class or series of
Capital Stock varied as to form, the form of consideration for
such class or series of Capital Stock shall be either cash or
the form used to acquire beneficial ownership of the largest
number of shares of such class or series of Capital Stock
previously acquired by the Interested Stockholder.
(d) After such Interested Stockholder has become an
Interested Stockholder and prior to the consummation of such
Business Combination:
(i) except as approved by a majority of the
Continuing Directors, there shall have been no failure to
declare and pay at the regular date therefor any
dividends (whether or not cumulative) payable in
accordance with the terms of any outstanding Capital
Stock;
(ii) there shall have been no reduction in the
annual rate of dividends paid on the Common Stock (except
as necessary to reflect any stock split, stock dividend
or subdivision of the Common Stock), except as approved
by a majority of the Continuing Directors;
(iii) there shall have been an increase in the
annual rate of dividends paid on the Common Stock as
necessary to reflect any reclassification (including any
reverse stock split), recapitalization, reorganization or
any similar transaction that has the effect of reducing
the number of shares of Common Stock, unless the failure
so to increase such annual rate is approved by a majority
of the Continuing Directors; and
- - 26 -
<PAGE>
Exhibit 3
(iv) such Interested Stockholder shall not have
become the beneficial owner of any additional shares of
Capital Stock except as part of the transaction that
results in such Interested Stockholder becoming an
Interested Stockholder and except in a transaction that,
after giving effect thereto, would not result in any
increase in the Interested Stockholder's percentage of
beneficial ownership of any class or series of Capital
Stock.
(e) After such Interested Stockholder has become an
Interested Stockholder, such Interested Stockholder shall not
have received the benefit, directly or indirectly (except
proportionately as a stockholder of the Corporation), of any
loans, advances, guarantees, pledges or other financial
assistance or any tax credits or other tax advantages provided
by the Corporation, whether in anticipation of or in
connection with such Business Combination or otherwise.
(f) A proxy or information statement describing the
proposed Business Combination and complying with the
requirements of the Securities Exchange Act of 1934 and the
rules and regulations thereunder (the "Act") (or any
subsequent provisions replacing such Act, rules or
regulations) shall be mailed to all stockholders of the
Corporation at least 30 days prior to the consummation of such
Business Combination (whether or not such proxy or information
statement is required to be mailed pursuant to such Act or
subsequent provisions). The proxy or information statement
shall contain on the first page thereof, in a prominent place,
any statement as to the advisability (or inadvisability) of
the Business Combination that the Continuing Directors, or any
of them, may choose to make and, if deemed advisable by a
majority of the Continuing Directors, the opinion of an
investment banking firm selected by a majority of the
Continuing Directors as to the fairness (or not) of the terms
of the Business Combination from a financial point of view to
the holders of the outstanding shares of Capital Stock other
than any Interested Stockholder and any Affiliate or Associate
(as hereinafter defined), of any
- - 27 -
<PAGE>
Exhibit 3
Interested Stockholder, such investment banking firm to be
paid a reasonable fee for its services by the Corporation.
(g) Such Interested Stockholder shall not have made any
major change in the Corporation's business or equity capital
structure without the approval of a majority of the Continuing
Directors.
C. For the purposes of this Article EIGHTH:
(1) The term "Business Combination" shall mean:
(a) any merger or consolidation of the Corporation or any
Subsidiary (as hereinafter defined) with (i) any Interested
Stockholder or (ii) any other corporation (whether or not
itself an Interested Stockholder) which is, or after such
merger or consolidation would be, an Affiliate or Associate of
an Interested Stockholder; or
(b) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition (in one transaction or a series of
transactions) with any Interested Stockholder or any Affiliate
or Associate of any Interested stockholder involving any
assets or securities of the Corporation, any Subsidiary or any
Interested Stockholder or any Affiliate or Associate of any
Interested Stockholder having an aggregate Fair Market Value
of 5% of the total assets of the Corporation and its
Subsidiaries as reflected on the consolidated balance sheet of
the Corporation and its Subsidiaries as of the end of the
Corporation's most recent fiscal year; provided that the sale
or other dispositions of securities of the Corporation to
anyone other than an Interested Stockholder or any Affiliate
or Associate of an Interested Stockholder shall not be deemed
in itself to be a Business Combination; or
(c) the adoption of any plan or proposal for the
liquidation or dissolution of the Corporation proposed by or
on behalf of an Interested Stockholder or any Affiliate or
Associate of any Interested Stockholder; or
- - 28 -
<PAGE>
Exhibit 3
(d) any reclassification of securities (including any
reverse stock split), or recapitalization of the Corporation,
or any merger or consolidation of the Corporation with any of
its subsidiaries or any other transaction (whether or not with
or otherwise involving an Interested Stockholder) that has the
effect, directly or indirectly, of increasing the
proportionate share of any class or series of Capital Stock,
or any securities convertible into Capital Stock or into
equity securities of any Subsidiary, that is beneficially
owned by any Interested stockholder or any Affiliate or
Associate of any Interested Stockholder; or
(e) any agreement, contract or other arrangement
providing for any one or more of the actions specified in the
foregoing clauses (a) to (d).
(2) The term "Capital Stock" shall mean all capital stock of
the Corporation authorized to be issued from time to time under
Article FOURTH of this Restated Certificate of Incorporation, and
the term "Voting Stock" shall mean all Capital Stock which by its
terms may be voted on all matters submitted to stockholders of the
Corporation generally.
(3) The term "person" shall mean any individual, firm,
corporation or other entity and shall include any group comprised
of any person and any other person with whom such person or any
Affiliate or Associate of such person has any agreement,
arrangement or understanding directly or indirectly, for the
purpose of acquiring, holding, voting or disposing of Capital
Stock.
(4) The term "Interested Stockholder" shall mean any person
(other than the Corporation or any Subsidiary and other than any
pension, retirement, profit-sharing employee stock ownership or
other employee benefit plan of the Corporation or any Subsidiary or
any trustee of or fiduciary with respect to any such plan when
acting in such capacity) who (a) acquires and beneficially owns
Voting Stock representing ten percent (10%) or more of the votes
entitled to be cast by the holders of all then outstanding shares
of Voting Stock; or (b) is an Affiliate or Associate of the
Corporation and at any time within the two-year period immediately
prior to the date in question acquired and
- 29 -
<PAGE>
Exhibit 3
beneficially owned Voting Stock representing ten percent (10%) or
more of the votes entitled to be cast by the holders of all then
outstanding shares of Voting Stock.
(5) A person shall be a "beneficial owner" of any Capital
Stock (a) which such person or any of its Affiliates or Associates
beneficially owns, directly or indirectly; (b) which such person or
any of its Affiliates or Associates has, directly or indirectly,
(i) the right to acquire (whether such right is exercisable
immediately or subject only to the passage of time), pursuant to
any agreement, arrangement or understanding or upon the exercise of
conversion rights, exchange rights, warrants or options, or
otherwise, or (ii) the right to vote pursuant to any agreement,
arrangement or understanding; or (c) which are beneficially owned,
directly or indirectly, by any other person with which such person
or any of its Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring, holding,
voting or disposing of any shares of Capital Stock. For the
purposes of determining whether a person is an Interested
Stockholder pursuant to Paragraph (4) of this Section C, the number
of shares of Capital Stock deemed to be outstanding shall include
shares deemed beneficially owned by such person through application
of Paragraph (5) of this Section C, but shall not include any other
shares of Capital Stock that may be issuable pursuant to any
agreement, arrangement or understanding, or upon exercise of
conversion rights, warrants or options, or otherwise.
(6) The terms "Affiliate" and "Associate" shall have the
respective meanings ascribed to such terms in Rule 12b-2 under the
Act as in effect on January 31, 1985 (the term "registrant" in said
Rule 12b-2 meaning in this case the Corporation).
(7) The term "Disinterested Stockholder" shall mean any
stockholder of the Corporation (other than the Corporation or a
Subsidiary) who is not an Interested Stockholder or any Affiliate
or an Associate of an Interested Stockholder.
(8) The term "Subsidiary" shall mean any corporation of which
a majority of any class of equity security is beneficially owned by
the Corporation; provided, however, that for the purposes of the
definition of Interested Stockholder set forth in Paragraph (4) of
this Section C,
- 30 -
<PAGE>
Exhibit 3
the term "Subsidiary" shall mean only a corporation of which a
majority of each class of equity security is beneficially owned by
the Corporation.
(9) The term "Continuing Director" shall mean any member of
the Board of Directors of the Corporation (the "Board") who is not
an Affiliate or Associate or representative of an Interested
Stockholder in question in connection with a particular Business
Combination and either: (a) was a member of the Board prior to the
time that such Interested Stockholder became an Interested
Stockholder; or (b) is or was recommended or elected to fill a
vacancy on the Board, however caused, by a majority of the
Continuing Directors.
(10) The term "Fair Market Value" shall mean (a) in the case
of cash, the amount of such cash; (b) in the case of stock, the
highest closing sale price during the 30-day period ending on the
date in question of a share of such stock on the Composite Tape for
New York Stock Exchange-Listed Stocks, or, if such stock is not
quoted on the Composite Tape, on the New York Stock Exchange, or,
if such stock is not listed on such Exchange, on the principal
United States securities exchange registered under the Act on which
such stock is listed, or, if such stock is not listed on any such
exchange, the highest closing bid quotation with respect to a share
of such stock during the 30-day period ending on the date in
question on the National Association of Securities Dealers, Inc.
Automated Quotations System or any similar system then in use, or
if no such quotations are available, the Fair Market Value on the
date in question of a share of such stock as determined by a
majority of the Disinterested Directors in good faith; and (c) in
the case of property other than cash or stock, the Fair Market
Value of such property on the date in question as determined in
good faith by a majority of the Disinterested Directors.
(11) In the event of any Business Combination in which the
Corporation survives, the phrase "consideration other than cash to
be received" as used in Sub-paragraphs (2)(a) and (2)(b) of Section
B of this Article EIGHTH shall include the shares of Common Stock
and/or the shares of any other class or series of Capital Stock
retained by the holders of such shares.
- 31 -
<PAGE>
Exhibit 3
D. The Board of Directors shall have the power and duty to
determine for the purposes of this Article EIGHTH, on the basis of
information known to them after reasonable inquiry, (a) whether a
person is an Interested Stockholder, (b) the number of shares of
Capital Stock or other securities beneficially owned by any person,
(c) whether a person is an Affiliate or Associate of another, and
(d) whether the assets that are the subject of any Business
Combination have, or the consideration to be received for the
issuance or transfer of securities by the Corporation or any
Subsidiary in any Business Combination has, an aggregate Fair
Market Value of more than 5% of the total assets of the Corporation
and its Subsidiaries as reflected on the consolidated balance sheet
of the Corporation and its Subsidiaries as of the end of the
Corporation's most recent fiscal year. Any such determination made
in good faith shall be binding and conclusive on all parties.
E. Nothing contained in this Article EIGHTH shall be construed
to relieve any Interested Stockholder from any fiduciary obligation
imposed by law.
F. The fact that any Business Combination complies with the
provisions of Section B of this Article EIGHTH shall not be
construed to impose any fiduciary duty, obligation or
responsibility on the Board, or any member thereof, to approve such
Business Combination or recommend its adoption or approval to the
stockholders of the Corporation, nor shall such compliance limit,
prohibit or otherwise restrict in any manner the Board, or any
member thereof, with respect to evaluations of or actions and
responses taken with respect to such Business Combination.
G. Notwithstanding any other provisions of this Restated
Certificate of Incorporate or the By-Laws of the Corporation (and
notwithstanding the fact that a lesser percentage or separate class
vote may be specified by law, this Restated Certificate of
Incorporation or the By-Laws of the Corporation), the affirmative
vote of the holders of not less than eighty percent (80%) of the
votes entitled to be cast by the holders of all then outstanding
shares of Voting Stock, voting together as a single class, and the
affirmative vote of a majority of the combined votes entitled to be
cast by Disinterested Stockholders voting together as a single
class shall be required to amend or repeal, or adopt any provisions
inconsistent with, this Article
- 32 -
<PAGE>
Exhibit 3
EIGHTH : provided, however, that this Section G shall not
apply to, and such eighty percent (80%) vote shall not be required
for, any amendment, repeal or adoption unanimously recommended by
the Board if all of such directors are persons who would be
eligible to serve as Continuing Directors within the meaning of
Paragraph (8) of Section C of this Article EIGHTH.
NINTH : To the full extent that the laws of the State of New
Jersey, as they exist on the date hereof or as they may hereafter
be amended, permit the limitation or elimination of the liability
of Directors or officers, no Director or officer of the Corporation
shall be personally liable to the Corporation or its stockholders
for damages for breach of any duty owed to the Corporation or its
stockholders. Neither the amendment or repeal of this Article nor
the adoption of any provision of this Restated Certificate of
Incorporation which is inconsistent with this Article shall apply
to or have any effect on the liability or alleged liability of any
Director or officer of the Corporation for or with respect to any
act or omission of such Director or officer occurring prior to such
amendment, repeal or adoption.
TENTH : The Board of Directors of the Corporation shall
consist of not less than nine nor more than eighteen members, the
actual number to be determined by the Board of Directors from time
to time. No Director of the Corporation may be removed by a vote
of the stockholders, except for cause.
IN WITNESS WHEREOF, Johnson & Johnson has caused this Restated
Certificate of Incorporation to be duly executed this 26th day of
April, 1990.
JOHNSON & JOHNSON
[Corporate Seal]
by Ralph S. Larsen
President
Attest:
J. Taylor Woodward III
Secretary
h:\laurag\wpdocs\q2ex396
- - 33 -
Exhibit 11
JOHNSON & JOHNSON AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
(Dollars and shares in millions except per share figures)
Fiscal Quarter Ended
June 30, July 2,
1996 1995
1. Net earnings ................ $ 791 661
2. Average number of shares outstanding
during the period............ 1,332.9 1,291.1
3. Earnings per share based upon average
outstanding shares (1 / 2) $ .60 .51
4. Fully diluted earnings per share:
a. Average number of shares out-
standing during the period. 1,332.9 1,291.1
b. Shares issuable under stock
compensation agreements at
quarter-end .............. - .2
c. Shares reserved under the stock
option plan for which the
market price at end of quarter
exceeds the option price.. 75.8 67.0
d. Aggregate proceeds to the Company
from the exercise of
options in 4c ............ 2,276 1,518
e. Market price of the Company's
common stock at fiscal
quarter-end............... 49.50 33.82
f. Shares which could be repurchased
under the treasury stock method
(4d / 4e) ................ 46.0 44.9
g. Addition to average outstanding
shares (4b + 4c - 4f)..... 29.8 22.3
h. Shares for fully diluted earnings
per share calculation
(4a + 4g) ................ 1,362.7 1,313.4
i. Fully diluted earnings per share
(1 / 4h) ................. $ .59 .50
- 34 -<PAGE>
Exhibit 11
JOHNSON & JOHNSON AND SUBSIDIARIES
CALCULATION OF EARNINGS PER SHARE
(Dollars and shares in millions except per share figures)
Fiscal
Six Months Ended
June 30, July 2,
1996 1995
1. Net earnings ................ $ 1,581 1,315
2. Average number of shares outstanding
during the period............ 1,332.8 1,289.0
3. Earnings per share based upon average
outstanding shares (1 / 2) $ 1.19 1.02
4. Fully diluted earnings per share:
a. Average number of shares out-
standing during the period. 1,332.8 1,289.0
b. Shares issuable under stock
compensation agreements at
quarter-end .............. - .2
c. Shares reserved under the stock
option plan for which the
market price at end of quarter
exceeds the option price.. 75.8 67.0
d. Aggregate proceeds to the Company
from the exercise of
options in 4c ............ 2,276 1,518
e. Market price of the Company's
common stock at fiscal
quarter-end............... 49.50 33.82
f. Shares which could be repurchased
under the treasury stock method
(4d / 4e) ................ 46.0 44.9
g. Addition to average outstanding
shares (4b + 4c - 4f)..... 29.8 22.3
h. Shares for fully diluted earnings
per share calculation
(4a + 4g) ................ 1,362.6 1,311.3
i. Fully diluted earnings per share
(1 / 4h) ................. $ 1.16 1.00
- - 35 -
