<PAGE>
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF
1934
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[X]Preliminary Proxy Statement [_]CONFIDENTIAL, FOR USE OF THE
[_]Definitive Proxy Statement COMMISSION ONLY (AS PERMITTED BY
[_]Definitive Additional Materials RULE 14A-6(E)(2))
[_]Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
COLGATE-PALMOLIVE COMPANY
- -------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- -------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X]No fee required.
[_]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 ActRule 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:
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[_]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:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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<PAGE>
PRELIMINARY COPIES
[LOGO] Colgate-Palmolive Company
MARCH 25, 1997
Dear Colgate Stockholder:
On behalf of the Board of Directors and management, I cordially invite you to
attend the Annual Meeting of Stockholders on Thursday, May 8, 1997, at 10:00
a.m. in the Broadway Ballroom of the Marriott Marquis Hotel, 1535 Broadway,
between 45th and 46th Streets, New York, New York 10036.
In addition to the election of directors and approval of the selection of
auditors, the items of business will be the adoption of the Colgate-Palmolive
Company 1997 Stock Option Plan to replace the expiring 1987 Stock Option Plan
and the authorization of additional shares of common stock. Further details
about the meeting are in the accompanying Notice of Annual Meeting and Proxy
Statement. At the meeting, I will also report on the progress of the Company
during the past year and answer stockholder questions.
IT IS IMPORTANT THAT YOUR STOCK BE REPRESENTED AT THE MEETING. WHETHER OR NOT
YOU PLAN TO ATTEND PERSONALLY, PLEASE COMPLETE AND MAIL THE ENCLOSED PROXY CARD
IN THE RETURN ENVELOPE.
Very truly yours,
/s/ Reuben Mark
Reuben Mark
Chairman of the Board and
Chief Executive Officer
<PAGE>
[LOGO] Colgate-Palmolive Company
MARCH 25, 1997
NOTICE OF MEETING
The Annual Meeting of Stockholders of Colgate-Palmolive Company, a
Delaware corporation, will be held on Thursday, May 8, 1997, at 10:00
a.m. in the Broadway Ballroom of the Marriott Marquis Hotel, 1535
Broadway, between 45th and 46th Streets, New York, New York 10036.
Items of business will be as follows:
1.Election of directors.
2.Approval of selection of auditors.
3. Adoption of the Colgate-Palmolive Company 1997 Stock Option Plan
to replace the expiring 1987 Stock Option Plan.
4.Authorization of additional shares of common stock.
5.Such other business as may properly come before the meeting.
Stockholders of record at the close of business on March 17, 1997 are
entitled to notice of and to vote at the meeting.
Andrew D. Hendry
Senior Vice President, General Counsel and Secretary
300 Park Avenue
New York, New York 10022
1
<PAGE>
COLGATE-PALMOLIVE COMPANY
300 Park Avenue
New York, New York 10022
March 25, 1997
PROXY STATEMENT
The accompanying proxy is solicited by the Board of Directors of Colgate-
Palmolive Company, a Delaware corporation (the "Company"), for use at the
Annual Meeting of Stockholders to be held in New York City on May 8, 1997, and
at any adjournment thereof. The proxy may be revoked at any time before it is
voted. If no contrary instruction is received, signed proxies returned by
stockholders will be voted in accordance with the Board of Directors'
recommendations.
This proxy statement and accompanying proxy are first being sent to
stockholders on or about the date set forth above.
Because respect for the rights and privacy of stockholders has always been a
practice at the Company, the Company has adopted a policy to assure that all
proxies, ballots and vote tabulations that identify stockholders are kept
confidential. Proxy cards will be returned in envelopes addressed to an
independent tabulator, which will receive, inspect and tabulate the proxies.
The identity of the vote of any stockholder will not be disclosed without the
consent of the stockholder except for use by the independent tabulator, for
solicitations for change of control of the Company and to meet legal
requirements.
Stockholders of record at the close of business on March 17, 1997 are entitled
to vote at the meeting. On that date, the Company had outstanding
shares of Common Stock (the "Common Stock"), shares of $4.25
Preferred Stock (the "$4.25 Preferred Stock") and shares of Series B
Convertible Preference Stock (the "Series B Convertible Preference Stock").
Each outstanding share of Common Stock and $4.25 Preferred Stock has one vote,
and each outstanding share of Series B Convertible Preference Stock has two
votes, corresponding to its conversion ratio.
The holders of a majority of the votes entitled to be cast present in person
or by proxy shall constitute a quorum for purposes of the 1997 Annual Meeting
of Stockholders. Abstentions and broker non-votes are counted for purposes of
determining whether a quorum is present on any matter. A plurality vote is
required for the election of directors. Accordingly, abstentions and broker
non-votes will not affect the outcome of the election. The affirmative vote of
a majority of all outstanding stock will be required to approve the
authorization of additional shares of common stock. As a result, abstentions
and broker non-votes will have the same effect as a negative vote. All other
matters to be voted on will be decided by the affirmative vote of a majority
of the votes of the shares represented at the meeting, either in person or by
proxy, and entitled to vote. On any such matter, an abstention will have the
same effect as a negative vote but, because shares held by brokers will not be
considered to be entitled to vote on matters as to which the brokers withhold
authority, a broker non-vote will have no effect on the vote.
The Company will pay the cost of soliciting proxies for the meeting. Proxies
may be solicited by regular employees of the Company in person, or by mail,
courier, telephone or facsimile. In addition, the Company has retained D.F.
King & Co. Inc. to solicit proxies by mail, courier, telephone and facsimile
and to request brokerage houses and other nominees to forward soliciting
material to beneficial owners. For these services the Company will pay a fee
of approximately $22,000 plus expenses.
2
<PAGE>
1. ELECTION OF DIRECTORS
The Board of Directors proposes the election of the following nine nominees as
directors, to serve until their successors have been elected and have
qualified. All of the incumbent directors of the Company are nominees except
for Vernon R. Alden who, having reached the mandatory retirement age, will not
stand for reelection at the Annual Meeting of Stockholders.
NOMINEES
The name, age and principal occupation of each nominee, the nominee's length
of service as a director of the Company, the names of the other public
companies of which the nominee is a director and certain other biographical
information are set forth below.
Chairman and Chief Executive Officer of the Company. Mr.
Mark joined the Company in 1963 and held a series of
significant positions in the United States and abroad. He
was appointed Vice President and General Manager of the
Household Products Division in 1975. From March 1979 to
March 1981, he was Group Vice President of domestic
operations. In March 1981, he was elected Executive Vice
President and became President and a director of the
Company on March 1, 1983. Mr. Mark was elected Chief
Executive Officer in May 1984 and Chairman in May 1986. Mr.
Mark is also a director of Citicorp and Citibank, N.A.,
Pearson, plc, Time Warner, Inc. and the New York Stock
Exchange.
Director since 1983
REUBEN MARK,
58
Visiting Scholar, Program in Science, Technology and
Society, Massachusetts Institute of Technology since 1985.
Mrs. Conway was President of Smith College from 1975 to
1985. She was Vice President, Internal Affairs, University
of Toronto, from 1973 to 1975 and a member of its graduate
faculty from 1971 to 1975. She has served as a member of
the Harvard Board of Overseers and The Conference Board and
as a trustee of Hampshire College, Adelphi University,
Northfield Mt. Hermon School and The Clarke School of the
Deaf. Mrs. Conway is a member of the boards of Merrill
Lynch & Co., Inc., Arthur D. Little, Inc., Nike, Inc., the
Allen Group and Lend Lease International. She is also a
trustee of the New England Medical Center, Mt. Holyoke
College, The Knight Foundation, The Enterprise Foundation
and The Kresge Foundation.
JILL K. Director since 1984
CONWAY, 62
3
<PAGE>
Chairman and Chief Executive Officer of General Re
Corporation since 1987. Mr. Ferguson has been with General
Re since 1969, when he joined the company as an actuary.
Prior to joining General Re, Mr. Ferguson worked for the
Kemper Insurance Group from 1965 to 1969 and served with
the U.S. Public Health Service from 1966 to 1968. Mr.
Ferguson is a director of General Signal Corporation and
the Insurance Institute of America. He is a Fellow of the
Casualty Actuarial Society, the American Academy of
Actuaries, past Director of the Casualty Actuarial Society,
the American Academy of Actuaries and the Actuarial
Education and Research Foundation.
Director since 1987
RONALD E.
FERGUSON, 55 Executive Vice President Technology Office, Apple Computer
Inc. Ms. Hancock joined Apple in July, 1996. Prior to
joining Apple, Ms. Hancock was Executive Vice President and
Chief Operating Officer, National Semiconductor. Ms.
Hancock joined National Semiconductor in September, 1995.
Prior to joining National Semiconductor, she was Senior
Vice President and Group Executive at IBM. Ms. Hancock is
on the board of directors of Aetna and Siemens Rolm
Communications Inc. She is also on the board of trustees of
Marist College.
Director since 1988
Chairman, President and Chief Executive Officer of Campbell
ELLEN M. Soup Company. Mr. Johnson began his business career as a
HANCOCK, 53 management trainee at Colgate Australia in 1959 and
received a series of promotions at the Company, becoming
General Manager of Colgate's South African subsidiary in
1967. He then held several positions with Warner-Lambert
from 1972 to 1982, including President of its Asian
Management Center, President of its Personal Products
Division and President of American Chicle Division. In
1982, Mr. Johnson became President and Chief Executive
Officer of Entenmann's, Inc. From 1987 to 1989, he served
as Chairman, Chief Executive Officer and President of
Gerber Products Company and from 1989 to 1990 he served as
Chairman and Chief Executive Officer of Gerber. Mr. Johnson
was elected Chairman of Campbell Soup Company in 1993 and
has been its President, Chief Executive Officer and a
Director since January 1990. Mr. Johnson serves on the
DAVID W. Advisory Council for the University of Notre Dame College
JOHNSON, 64 of Business Administration as well as University of
Chicago's Graduate School of Business.
Director since 1991
4
<PAGE>
Officer, Faneuil Hall Associates, Inc., a private investment
company, since 1973. Mr. Kendall is a former Chairman of
The Kendall Company, which he joined in 1956. He held a
series of significant positions with The Kendall Company in
the United States and abroad. He is president of the Henry
P. Kendall Foundation and a former director of the Shawmut
Bank of Boston, N.A. He has served a number of educational
and scientific organizations as president, chairman and
trustee.
Director since 1972
President, Chief Executive Officer and director, Schering-
Plough Corporation. Mr. Kogan joined Schering-Plough as
JOHN P. Executive Vice President, Pharmaceutical Operations in 1982
KENDALL, 68 and became President and Chief Operating Officer in 1986
and then President and Chief Executive Officer in 1996. Mr.
Kogan is also a director of the Atlantic Mutual Companies
and the Bank of New York Company. He has served on the
boards of many civic, educational and public service
organizations, including Leonard Stern School of Business,
New York University, Saint Barnabas Medical Center and the
Council on Foreign Relations.
Director since 1996
RICHARD J. Chief Executive Officer and President, National Public
KOGAN, 55 Radio. From 1973 through 1988, Mr. Lewis held positions of
increasing responsibility with Chesapeake & Potomac
Telephone Company, including Vice President responsible for
External Affairs. From 1988 through 1993, until he assumed
his present position, Mr. Lewis was the President and Chief
Executive Officer of Chesapeake & Potomac Telephone
Company. Mr. Lewis has also served on the Peace Corps staff
in Africa and on the staff of the United States Equal
Employment Opportunity Commission and the United States
Department of Justice. Mr. Lewis is also a director of
Hallibarton Co., Guest Services, Apple Computer Inc. and
Black Entertainment Television and has served on the boards
of many civic, educational and public service
organizations, including Catholic University, the United
Negro College Fund, the Washington Performing Arts Society
and the Greater Washington Board of Trade.
DELANO E.
LEWIS, 58
Director since 1991
5
<PAGE>
Director of Tambrands Inc. Prior to that, Mr. Wentz was
Chairman of Tambrands from June 1993 to September 1996.
Prior to becoming Chairman, Mr. Wentz had previously been a
director of Tambrands Inc. Previously, he was Chairman of
ESSTAR Incorporated and Chairman, President and Chief
Executive Officer of Amstar Company. Mr. Wentz joined
Amstar in 1969 as Vice President of Operations for its
subsidiary, Duff-Norton Company, Inc. He was elected
President of Duff-Norton in 1970, Vice President of Amstar
in 1972, a director in 1976 and Executive Vice President
and Chief Operating Officer in 1979. He assumed the
additional responsibilities of President in 1981, Chief
Executive Officer in 1982 and Chairman in 1983. In 1984,
Mr. Wentz was appointed President and a director of Amstar
Holdings, Inc.
Director since 1982
HOWARD B.
WENTZ, JR.,
67
The Board recommends a vote IN FAVOR OF THE NOMINEES FOR DIRECTOR LISTED ABOVE.
6
<PAGE>
SECURITY OWNERSHIP OF MANAGEMENT
The following table shows the beneficial ownership of Common Stock and
Series B Convertible Preference Stock by each director, each executive officer
named in the Summary Compensation Table on page and directors and
executive officers as a group. No director or executive officer owns any $4.25
Preferred Stock.
<TABLE>
<CAPTION>
COMMON STOCK
---------------------
AMOUNT AND NATURE OF SERIES B CONVERTIBLE
BENEFICIAL PREFERENCE
OWNERSHIP/1/,/2/ STOCK (ESOP)
--------------------- ---------------------------
NAME OF DIRECTLY EXERCISABLE AMOUNT AND NATURE OF
BENEFICIAL OWNER OWNED/3/ OPTIONS BENEFICIAL OWNERSHIP/2/,/4/
---------------- --------- ----------- ---------------------------
<S> <C> <C> <C>
Reuben Mark.................. 621,638 1,973,641 2,994
William S. Shanahan.......... 64,105 309,677 1,810
Lois D. Juliber.............. 34,740 92,095 712
Andrew D. Hendry............. 14,663 57,629 315
David A. Metzler............. 57,053 101,167 1,739
Vernon R. Alden/5/........... 10,544 1,666 --
Jill K. Conway/6/............ 4,475 1,999 --
Ronald E. Ferguson/7/........ 10,205 1,999 --
Ellen M. Hancock/8/.......... 4,937 1,999 --
David W. Johnson/9/.......... 4,714 1,999 --
John P. Kendall/1//0/........ 165,963 333 --
Richard J. Kogan............. 1,878 1,999 --
Delano E. Lewis/1//1/........ 3,016 1,999 --
Howard B. Wentz, Jr./1//2/... 15,498 1,000 --
All directors and executive
officers as a group
(30 persons)................ 1,498,986 3,052,808 26,265
</TABLE>
- --------
1 Information/regarding Common Stock holdings is as of March 10, 1997, except
for holdings in the Savings and Investment Plan, which are as of December
24, 1996. Unless otherwise indicated, beneficial ownership of Common Stock
is direct, and the person indicated has sole voting and investment power.
2 Each/indicated person beneficially owns less than 1% of the outstanding
Common Stock and Series B Convertible Preference Stock, except for Mr. Mark
who beneficially owns 1.7% of the outstanding Common Stock. All directors
and executive officers as a group beneficially own 3.0% of the outstanding
Common Stock and less than 1% of the outstanding Series B Convertible
Preference Stock. Ownership of Common Stock includes direct ownership,
options exercisable within 60 days and Savings and Investment Plan
holdings.
3 This/column includes shares of restricted stock which were outstanding as
of December 31, 1996 that vested on March 1, 1997.
4 Information/regarding Series B Convertible Preference Stock holdings is as
of December 24, 1996. Series B Convertible Preference Stock is issued to a
trustee acting on behalf of the Company's Savings & Investment Plan.
Participants in such plan, including the executive officers named in the
Summary Compensation Table, have sole voting power over such shares,
subject to the trustee's right to vote such shares if the participant fails
to do so, but no investment power until distribution in accordance with the
terms of such plan, subject to statutory diversification requirements.
Footnotes continue on following page.
7
<PAGE>
5 Mr./Alden's holdings do not include 1,000 shares of Common Stock held by
his spouse, as to which he disclaims beneficial ownership.
6 Mrs./Conway's holdings include (i) 325 Common Stock units credited to a
deferred account under the Stock Plan for Non-Employee Directors (the
"Stock Plan") and (ii) Common Stock units credited to an account under
the Director Pension Plan (the "Pension Plan"), in each case, over which
she has no voting or investment power.
7 Mr./Ferguson's holdings include (i) 650 Common Stock units credited to a
deferred account under the Stock Plan, (ii) 3,104 Common Stock units
credited to a deferred account under the Restated and Amended Deferred
Compensation Plan for Non-Employee Directors (the "Deferred Compensation
Plan"), and (iii) 918 Common Stock units credited to an account under the
Pension Plan, in each case, over which he has no voting or investment
power. In addition, in the ordinary course of business, General Re
Corporation makes portfolio investments and may from time to time hold
securities of the Company. Mr. Ferguson, Chairman of the Board and Chief
Executive Officer of General Re Corporation, disclaims any beneficial
ownership of these securities.
8 Mrs./Hancock's holdings include 200 shares of Common Stock owned jointly
with her spouse. Mrs. Hancock's holdings also include (i) 650 Common Stock
units credited to a deferred account under the Stock Plan and (ii)
Common Stock units credited to an account under the Pension Plan, in each
case, over which she has no voting or investment power.
9 Mr./Johnson's holdings include Common Stock units credited to an
account under the Pension Plan over which he has no voting or investment
power.
10 Mr./Kendall's0holdings/do not include 350,502 shares of Common Stock held
by trusts in which he has a contingent remainderman's interest and 65,083
shares of Common Stock held by trusts in which he has a limited power of
appointment. He has no voting or investment power in these trusts, and he
disclaims beneficial ownership of such shares. Mr. Kendall's holdings do
include (i) 525 Common Stock units credited to a deferred account under the
Stock Plan and (ii) Common Stock units credited to a deferred account
under the Deferred Compensation Plan, in each case, over which he has no
voting or investment power.
11 Mr./Lewis'1holdings/include (i) 650 Common Stock units credited to a
deferred account under the Stock Plan and (ii) Common Stock units
credited to an account under the Pension Plan, in each case, over which he
has no voting or investment power.
12 Mr./Wentz's2holdings/include Common Stock units credited to an account
under the Pension Plan over which he has no voting or investment power.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Based on a review of the forms and written representations received by the
Company pursuant to Section 16(a) of the Securities Exchange Act of 1934, the
Company believes that, during 1996, its executive officers and directors
complied with all applicable Section 16 filing requirements.
8
<PAGE>
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors met nine times during 1996.
The standing committees of the Board are the Audit Committee, Finance
Committee, Personnel and Organization Committee and Committee on Directors.
The Audit Committee oversees management's fulfillment of its financial
reporting and disclosure responsibilities and its maintenance of an
appropriate internal control system. It recommends appointment of the
Company's independent public accountants and oversees the activities of the
Company's internal audit function and the Global Business Practices
organization. To ensure independence, the independent public accountants,
internal auditors and general counsel meet with the Audit Committee with and
without the presence of management representatives. Its current members are:
Ronald E. Ferguson (Chair), Vernon R. Alden, Jill K. Conway, John P. Kendall
(Deputy Chair) and Howard B. Wentz, Jr. It met four times in 1996.
The Finance Committee oversees the financial policies and practices of the
Company. It also reviews the budgets of the Company, makes recommendations to
the Board regarding financial and strategic matters and oversees the Company's
finance, treasury and related functions. Its current members are: Howard B.
Wentz, Jr. (Chair), Ronald E. Ferguson, Ellen M. Hancock (Deputy Chair), John
P. Kendall, Reuben Mark and Richard J. Kogan as of January 9, 1997. It met six
times in 1996.
The Personnel and Organization Committee oversees organizational, personnel,
compensation and benefits policies and practices of the Company. It reviews
the compensation of the executive officers and recommends to the Board the
compensation of the Chief Executive Officer. The Committee administers the
1977, 1987 and 1996 Stock Option Plans (and will administer the 1997 Stock
Option Plan if it is adopted by stockholders at the Annual Meeting), the
Executive Incentive Compensation Plan and the Executive Severance Plan. It
also oversees the Company's charitable giving and other social responsibility
programs. Its current members are: Jill K. Conway (Chair), Vernon R. Alden,
Ronald E. Ferguson, David W. Johnson (Deputy Chair), John P. Kendall and
Delano E. Lewis. It met seven times in 1996.
The Committee on Directors recommends nominees for the Board of Directors. It
also makes recommendations to the Board regarding Board and committee
structure, corporate governance and director compensation and reviews Board
member performance. Its current members are: Vernon R. Alden (Chair), Jill K.
Conway, John P. Kendall, Delano E. Lewis (Deputy Chair) and Howard B. Wentz,
Jr. It met three times in 1996. The Committee on Directors will consider
nominees recommended by stockholders. Nominations by stockholders must be made
in accordance with the information and timely notice requirements of the
Company's By-Laws, a copy of which may be obtained from the Secretary of the
Company. Such nominations must be in writing and, for consideration at the
1997 Annual Meeting, received by the Secretary no later than April 4, 1997.
Vernon R. Alden, who sits on the Audit Committee, the Personnel and
Organization Committee and the Committee on Directors, having reached the
mandatory retirement age, will not stand for reelection at the Annual Meeting
of Stockholders. His replacement on these committees, if any, shall be
appointed by the Board of Directors.
All directors attended at least 83%, and on average 95%, of the meetings of
the Board and the committees on which they served in 1996.
9
<PAGE>
COMPENSATION OF DIRECTORS
Current Directors' Compensation
In 1996, non-employee directors (that is, all directors except Mr. Mark)
received the following compensation: a retainer of $18,000 and 275 shares of
Common Stock, a committee retainer of $3,000 for the chair of each committee
and $1,500 for the deputy chair of each committee, meeting fees of $1,000 for
each Board or committee meeting attended and a stock option grant for 1,000
shares of Common Stock.
Under the Restated and Amended Deferred Compensation Plan for Non-Employee
Directors, directors may elect to defer payment of all or a part of their cash
compensation as directors and committee members. Deferred fees are credited to
a phantom Common Stock account, which is adjusted to reflect changes in the
market price of the Common Stock and dividends paid. Distributions are made in
cash, either in annual installments or by lump sum, after the retirement or
resignation of the director. For information concerning directors who have
deferred fees, see "Security Ownership of Management."
Under the Stock Purchase Plan for Non-Employee Directors, which has been
replaced by the Stock Plan for Non-Employee Directors described below,
directors could elect to have all or a portion of their non-deferred cash
compensation used to purchase Common Stock. Shares of Common Stock that
represent retainer and committee chairperson fees are purchased prospectively
at the beginning of the year; shares that represent attendance fees are
purchased retroactively after the end of the year. In each case, the purchases
are made on the third business day following the Company's annual public
earnings release. During 1996, Ellen M. Hancock, David W. Johnson, Delano E.
Lewis and Howard B. Wentz, Jr. purchased 152, 181, 191 and 191 shares of
Common Stock, respectively.
1996 compensation to non-employee directors also included participation in the
Director Pension Plan, which has been replaced effective January 1, 1997 as
described below. Under the Director Pension Plan, a non-employee director who
retires after reaching age 72 and who has served a minimum of nine years as a
director receives an annual pension equal in value to the annual retainer paid
for the twelve-month period prior to retirement. For this purpose, Common
Stock received in 1996 as a retainer is valued at the fair market value on the
day that it is granted to the director. A non-employee director who becomes
permanently disabled and has five or more years of service as a director
receives an undiscounted pension from the date of such disability. A non-
employee director who retires before reaching age 72 with at least nine years
of service as a director may receive a pension with the approval of the Board.
All such pensions are paid quarterly for the lifetime of the director.
Under the Stock Plan for Non-Employee Directors, approved by the stockholders
at last year's annual meeting and effective as of January 1, 1997, the
Director Pension Plan has been replaced by an annual grant of 125 shares of
Common Stock (except in the case of Mr. Alden and Mr. Kendall, who have
elected to remain in the Director Pension Plan, and who will not receive the
annual grant of 125 shares of Common Stock in lieu of the Director Pension
Plan). In addition, the cash portion of the annual retainer has been replaced
by an annual grant of 250 shares of Common Stock. Pursuant to the Stock Plan
for Non-Employee Directors, each non-employee director may make an annual
irrevocable election to defer receipt of all or a part of the shares granted
under this plan. Each non-employee director also may make an annual
irrevocable election to receive cash in lieu of up to 25% of the shares of
Common Stock granted under, and not deferred pursuant to, this plan solely for
the
10
<PAGE>
purpose of satisfying related tax obligations. Directors may also elect to
have all or a portion of their cash compensation for committee chairperson and
attendance fees used to purchase Common Stock. Shares of Common Stock that
represent committee chairperson fees are purchased prospectively at the
beginning of the year; shares that represent attendance fees are purchased
retroactively after the end of the year. In each case, directors purchase
treasury shares on the third business day following the Company's annual
public earnings release.
In 1996, the Company provided a $50,000 insurance policy for each non-employee
director (coverage ends at retirement) and up to $300,000 in travel and
accident insurance coverage. In addition, directors are eligible to
participate in the Company's matching gift program, under which gifts to
educational or medical institutions are matched up to a maximum of $8,000.
11
<PAGE>
EXECUTIVE COMPENSATION
SUMMARY COMPENSATION TABLE
The following table sets forth the 1996, 1995 and 1994 compensation of the
Chief Executive Officer and the four other most highly compensated executive
officers of the Company (the "Named Officers").
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
---------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
- -------------------------------------------------------------------------------------------------
(A) (B) (C) (D) (E) (F) (G) (H) (I)
OTHER RESTRICTED *SECURITIES ALL
ANNUAL STOCK UNDERLYING OTHER
NAME AND COMPENSA- AWARDS OPTIONS LTIP COMPEN-
PRINCIPAL POSITION YEAR SALARY($) BONUS($)/1/ TION($)/2/ ($)/3/ (#)/4/ PAYOUTS($) SATION($)/5/
------------------ ---- --------- ----------- ---------- ---------- ----------- ---------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Reuben Mark 1996 1,021,000 1,656,302 -- 2,416,800 -- -- 130,802
Chairman of the Board 1995 984,667 1,000,000 -- 1,516,063 114,074 -- 124,767
and Chief Executive 1994 945,500 1,413,000 -- 2,411,731 159,800 -- 101,571
Officer
William S. Shanahan 1996 716,917 859,478 -- 415,160 44,000 -- 94,488
President and Chief 1995 685,667 487,000 -- 355,429 41,000 -- 81,923
Operating Officer 1994 646,667 650,000 -- 693,284 152,700 -- 62,212
Lois D. Juliber 1996 388,958 350,097 -- 188,660 36,586 -- 25,540
Executive Vice President 1995 370,499 338,746 -- 157,672 53,277 -- 23,531
Chief of Operations 1994 348,687 213,000 -- 311,935 55,566 -- 21,479
Developed Markets
Andrew D. Hendry 1996 356,167 329,562 -- 151,036 26,987 -- 26,886
Senior Vice President 1995 339,875 168,000 -- 128,818 17,816 -- 21,616
General Counsel and 1994 313,750 221,000 -- 348,979 16,241 -- 20,938
Secretary
David A. Metzler 1996 391,000 269,037 -- 188,660 20,000 -- 47,459
Executive Vice President 1995 371,958 193,171 -- 157,672 56,825 -- 47,019
Chief of Operations High 1994 348,333 217,992 -- 311,935 23,222 -- 37,526
Growth Markets
</TABLE>
- --------
* Includes reload options granted pursuant to the Accelerated Ownership
Feature of the 1987 Stock Option Plan. Reload option grants do not result in
an increase in the combined total number of shares and options held by an
employee prior to the exercise. See Individual Grants Table on page .
1 Amounts/include bonuses earned for the years indicated, paid on or before
March 15 of the following year, consistent with past practice.
2 None/of the Named Officers received perquisites or other personal benefits
in an amount large enough to require reporting in this column, nor did any
of them receive any other compensation required to be reported in this
column.
3 Restricted/stock awards under this program reflect the achievement of
certain financial goals (growth in net sales and earnings per share) over a
three-year measurement period.
Awards shown include those earned for the years indicated, paid on or before
March 15 of the following year, consistent with past practice. Awards vest
over a period of a minimum of three years.
12
<PAGE>
Dividend equivalents accrue on the restricted stock during the vesting
period. As of December 31, 1996, the Named Officers as a group held an
aggregate of 234,552 shares of restricted stock, with a value of $21,637,422
based on the closing market price of the Common Stock on December 31, 1996.
The number and value of the restricted stock holdings of each of the Named
Officers at December 31, 1996, are set forth below:
<TABLE>
<CAPTION>
# OF SHARES $ VALUE
----------- ----------
<S> <C> <C>
Reuben Mark.......................................... 160,571 14,812,675
William S. Shanahan.................................. 35,682 3,291,665
Lois D. Juliber...................................... 13,428 1,238,733
Andrew D. Hendry..................................... 14,222 1,311,979
David A. Metzler..................................... 10,649 982,370
</TABLE>
4 Amounts/include reload options granted pursuant to the Accelerated Ownership
Feature of the 1987 Stock Option Plan. This feature was implemented to
promote increased employee share ownership by encouraging the early exercise
of options and retention of shares. Under this feature, if an employee uses
shares he or she already owns to pay the exercise price of a stock option or
the related taxes withheld, he or she receives a new option for an equal
number of shares at the then current market price with the same expiration
date as the original option. The incremental shares received upon exercise
of the stock option over the shares surrendered are restricted from sale for
a period of two years. The new, or reload, option grant does not result in
an increase in the combined total number of shares and options held by an
employee prior to the exercise.
The number of reload options included in the amounts shown in column (g) for
1996, 1995 and 1994, respectively, are as follows: Mr. Mark, 0, 114,074 and
159,800; Mr. Shanahan, 0, 0 and 109,700; Ms. Juliber, 17,586, 35,277 and
26,566; Mr. Hendry, 13,987, 4,816 and 2,241; and Mr. Metzler, 0, 37,825 and
3,222. See also Individual Grants Table on page .
5 Amounts/shown in All Other Compensation, column (i), are pursuant to
programs available to all employees generally, as follows:
<TABLE>
<CAPTION>
SUPPLEMENTAL
SAVINGS & SAVINGS &
INVESTMENT INVESTMENT VALUE OF
PLAN RETIREE SUCCESS PLAN COMPANY PAID
COMPANY INSURANCE SHARING COMPANY LIFE INSURANCE
NAMED OFFICER MATCH ACCOUNT ACCOUNT MATCH PREMIUMS
------------- ---------- --------- ------- ------------ --------------
<S> <C> <C> <C> <C> <C>
Reuben Mark......... 6,300 12,963 3,125 94,134 14,280
William S.
Shanahan........... 6,300 12,963 3,125 50,659 21,441
Lois D. Juliber..... 4,950 648 3,125 14,466 2,351
Andrew D. Hendry.... 4,950 648 3,125 13,501 4,662
David A. Metzler.... 6,300 12,963 3,125 18,754 6,317
</TABLE>
The amounts shown as Savings & Investment Plan Company Match, Retiree
Insurance Account and Success Sharing Account represent the value (as of the
time of allocation) of shares of Series B Convertible Preference Stock
allocated to the Named Officers' Accounts under the Savings and Investment
Plan. Premium payments for life insurance were not made pursuant to split
dollar life insurance arrangements.
13
<PAGE>
1996 OPTION GRANTS
The following table shows information regarding grants of stock options in
1996 to the Named Officers. The table includes both new options granted in
1996 and reload options granted automatically under the Accelerated Ownership
Feature of the 1987 Stock Option Plan described on page in footnote 4. Use
of the Accelerated Ownership Feature does not result in an increase in the
total combined number of shares and options held by an employee. The Company
did not grant any stock appreciation rights during 1996.
INDIVIDUAL GRANTS
- -------------------------------------------------------------------------------
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E) (F)
NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE GRANT DATE
OPTIONS EMPLOYEES OR BASE PRESENT
EXECUTIVE OFFICER GRANTED IN FISCAL YEAR PRICE ($/SH) EXP. DATE VALUE ($)(/7/)
----------------- ---------- -------------- ------------ --------- --------------
<S> <C> <C> <C> <C> <C>
Reuben Mark............. -- -- % --
====== ==== =======
William S. Shanahan
1996 Grant(/1/)........ 44,000 1.54% 81.2500 09/05/06 555,296
====== ==== =======
Lois D. Juliber
1996 Grant(/1/)........ 19,000 0.67% 81.2500 09/05/06 238,493
4/96 Reload
Options(/2/).......... 8,072 0.28% 76.0000 (/3/) 64,215
10/96 Reload
Options(/2/).......... 9,514 0.33% 88.9375 (/4/) 88,569
------ ----
TOTAL................. 36,586 1.28% 391,277
====== ==== =======
Andrew D. Hendry
1996 Grant(/1/)........ 13,000 0.45% 81.2500 09/05/06 163,180
5/96 Reload
Options(/2/).......... 3,753 0.13% 76.2500 (/5/) 29,954
11/96 Reload
Options(/2/).......... 10,234 0.36% 92.1875 (/6/) 98,754
------ ----
TOTAL................. 26,987 0.94% 291,888
====== ==== =======
David A. Metzler
1996 Grant(/1/)........ 20,000 0.70% 81.2500 09/05/06 251,015
====== ==== =======
</TABLE>
- --------
1 The/1996 option grants (other than options granted pursuant to the
Accelerated Ownership Feature referred to above) become exercisable in
increments of one-third annually commencing on the first anniversary date of
the option grant and become fully exercisable on the third anniversary date
thereof.
2 Reload/options received pursuant to the Accelerated Ownership Feature become
fully exercisable six months after the date of grant and terminate on the
expiration date of the original option. See also footnote 4 on page .
3 Includes/the following options received pursuant to the Accelerated
Ownership Feature: 526 options expiring on 09/07/98; 2,454 options expiring
on 09/13/99; 4,525 options expiring on 09/03/02; and 567 options expiring on
11/05/02.
14
<PAGE>
4 following options received pursuant to the Accelerated
Ownership Feature: 4,545 options expiring on 09/01/03, and 4,969 options
expiring on 09/07/04.
5 Includes/the following options received pursuant to the Accelerated
Ownership Feature: 906 options expiring on 03/13/01, and 2,847 options
expiring on 10/10/01.
6 Includes/the following options received pursuant to the Accelerated
Ownership Feature: 5,179 options expiring on 10/10/01, and 5,055 options
expiring on 09/01/03.
7 Amounts/shown are estimates of the value of the options calculated using a
Black-Scholes based option valuation model. The material assumptions and
adjustments incorporated into the Black-Scholes based model include the
exercise price of the option, the option term, an interest rate factor based
on the U.S. Treasury rate over the option term (ranging from 5.8% to 6.4%),
a volatility factor based on the standard deviation of the price of the
Common Stock (ranging from 17% to 18%) and a dividend rate based on the
annualized dividend rate per share of Common Stock. The actual value of the
options, if any, will depend on the extent to which the market value of the
Common Stock exceeds the price of the option on the date of exercise.
Management believes that the Black-Scholes model was not developed for the
purpose of valuing employee stock options, particularly those having rights
such as the Accelerated Ownership Feature. There can be no assurance that
this Black-Scholes based model will approximate the value the executive will
actually realize.
1996 OPTION EXERCISES AND YEAR-END VALUES
The following table shows information regarding the exercise of stock
options during 1996 by the Named Officers and the number and value of any
unexercised stock options as of December 31, 1996.
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
SHARES FY-END (#) FY-END ($)
ACQUIRED ON VALUE EXERCISABLE/ EXERCISABLE/
EXECUTIVE OFFICER EXERCISE (#) REALIZED ($) UNEXERCISABLE UNEXERCISABLE
----------------- ------------ ------------ ------------- -------------
<S> <C> <C> <C> <C>
Reuben Mark............... 69,776 1,426,047 1,973,641/ 60,559,387/
0 0
William S. Shanahan....... 31,950 639,000 309,677/ 11,077,464/
85,668 1,644,081
Lois D. Juliber........... 21,768 604,628 82,581/ 2,088,833/
50,182 867,146
Andrew D. Hendry.......... 23,570 987,562 47,395/ 1,533,921/
36,568 515,868
David A. Metzler.......... 9,416 191,340 101,167/ 3,133,372/
39,334 758,478
</TABLE>
The option values shown above reflect an increase in the market value of the
Company from $2.7 billion as of December 31, 1987 (the earliest grant year of
the options reported above) to $13.6 billion as of December 31, 1996.
15
<PAGE>
RETIREMENT PLAN
Table A below shows the estimated maximum annual retirement benefit payable to
persons (including the Named Officers) retiring in 1997 under the "final
average earnings" formula of the Colgate Employees' Retirement Income Plan
(the "Retirement Plan"). Table B shows the estimated annual retirement benefit
for each of the Named Officers payable under the Colgate Personal Retirement
Account ("PRA") formula, which was added to the Retirement Plan on July 1,
1989. All salaried employees of the Company employed at June 30, 1989
(including the Named Officers) were offered a one-time election to maintain
the Retirement Plan's benefit under the "final average earnings" formula by
making monthly contributions of 2% of recognized earnings (described below) up
to the Social Security wage base and 4% of recognized earnings in excess of
the wage base. All of the Named Officers (excluding Mr. Hendry) made this one-
time election in 1989. The Named Officers and other employees who so elected
are entitled at retirement to receive the greater of the benefit under the
"final average earnings" benefit formula (Table A) or the benefit under the
PRA formula (Table B). Those who did not so elect, are entitled at retirement
to receive the benefit under the PRA formula only.
TABLE A
(EXPRESSED IN $)
<TABLE>
<CAPTION>
YEARS OF SERVICE
REMUNERATION /1/,/2/,/3/ 15 20 25 30 35 40
- ------------------------ ------- ------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
500,000............... 135,000 180,000 225,000 270,000 315,000 360,000
750,000............... 202,500 270,000 337,500 405,000 472,500 540,000
1,250,000............... 337,500 450,000 562,500 675,000 787,500 900,000
1,750,000............... 472,500 630,000 787,500 945,000 1,102,500 1,260,000
2,250,000............... 607,500 810,000 1,012,500 1,215,000 1,417,500 1,620,000
2,750,000............... 742,500 990,000 1,237,500 1,485,000 1,732,500 1,980,000
</TABLE>
- --------
/1Remuneration/equals "final average earnings," which is the average of the
individual's highest consecutive three years of "recognized earnings" out of
the ten years immediately preceding retirement. For the Named Officers,
"recognized earnings" is the sum of the regular salary earned during the
prior year (column (c) in the Summary Compensation Table on page ) (or
annual salary as of January 1, if higher), plus the bonus payment paid
during the preceding calendar year (column (d) in the Summary Compensation
Table on page ).
/2The/number of years of credited service under the Retirement Plan as of
January 1, 1997 for the Named Officers are: Mr. Mark--33 years 7 months; Mr.
Shanahan--31 years 5 months; Ms. Juliber--8 years 5 months; Mr. Hendry--5
years 10 months; and Mr. Metzler--31 years 11 months.
/3Includes/payments under the Supplemental Employees' Retirement Plan in
excess of limitations under the Internal Revenue Code of 1986, as amended.
Benefits are computed by multiplying "final average earnings" by the product
of years of credited service and 1.8%. Benefits payable under the
Supplemental Employees' Retirement Plan are subject to a maximum of 70% of
the sum of the individual's base salary at retirement and bonus for the
calendar year immediately preceding retirement, less benefits payable under
the basic Retirement Plan. Benefits are subject to an offset for Social
Security and certain other benefits.
16
<PAGE>
Benefits under the PRA are determined as follows: On July 1, 1989, an account
with an opening balance was established for each eligible person employed on
June 30, 1989, equal to the greater of (i) the lump-sum value of the pension
then accrued under the Retirement Plan's "final average earnings" formula or
(ii) an amount calculated by aggregating the monthly pay-based credits which
would have been made to the employee's account had the PRA always been in
effect. Thereafter, and with respect to PRA accounts established for any
eligible employee hired on or after July 1, 1989, monthly pay-based credits
are accumulated in an employee's account, being determined as a percentage of
the employee's monthly recognized earnings in accordance with the following
formula:
<TABLE>
<CAPTION>
UP TO 1/4 OF OVER 1/4 OF
SOCIAL SECURITY THE SOCIAL SECURITY
YEARS OF SERVICE WAGE BASE WAGE BASE
- ---------------- --------------- -------------------
<S> <C> <C>
0- 9....................................... 2.50% 3.75%
10-14....................................... 3.00% 4.50%
15-19....................................... 4.00% 6.00%
20-24....................................... 5.35% 8.00%
25 or more.................................. 7.50% 11.25%
</TABLE>
In addition, the employee's account is credited monthly with interest at an
annual rate of 2% over the current six-month Treasury bill rate, adjusted
quarterly.
TABLE B
Table B shows the estimated annual retirement benefits payable under the PRA
for each of the Named Officers, based on 1997 recognized earnings and assuming
no future increases in such earnings and an annuity rate of 9%:
<TABLE>
<CAPTION>
YEAR AMOUNT OF
REACHING LEVEL
AGE 65 ANNUITY ($)/1/
-------- ----------
<S> <C> <C>
Reuben Mark.......................................... 2004 852,860
William S. Shanahan.................................. 2005 472,973
Lois D. Juliber...................................... 2014 171,289
Andrew D. Hendry..................................... 2012 78,852
David A. Metzler..................................... 2007 267,656
</TABLE>
- --------
/1/Includes payments in excess of Internal Revenue Code limitations under the
Supplemental Employees' Retirement Plan. Benefits payable under the
Supplemental Employees' Retirement Plan are subject to a maximum of [70]%
of the sum of the individual's base salary at retirement and bonus for the
calendar year immediately preceding retirement, less benefits payable under
the basic Retirement Plan.
EXECUTIVE SEVERANCE PLAN AND OTHER ARRANGEMENTS
The Executive Severance Plan (the "Severance Plan") was adopted by the Board
of Directors effective September 1, 1985, and was last amended as of June 8,
1995. The Severance Plan is administered by the Personnel and Organization
Committee (the "P&O Committee"). The P&O Committee selects participants from
among the executive officers and other key personnel of the Company and has
selected the Named Officers, among others, as participants.
17
<PAGE>
If within two years of a change of control of the Company (as defined in the
Severance Plan), an executive participating in the Severance Plan terminates
employment due to an adverse change in conditions of employment or the Company
terminates the executive's employment other than for cause (defined as serious
willful misconduct likely to result in material economic damage to the
Company), the executive is entitled to receive, in a lump sum, an amount equal
to between 12 and 36 months of compensation and a pro rata cash bonus under
the Executive Incentive Compensation Plan for the period prior to termination.
Compensation is defined to include the executive's base salary as of the
termination date plus his or her highest cash award under the Executive
Incentive Compensation Plan within the last five years. If an outside
accounting firm determines that receipt of such a lump sum under the Severance
Plan would subject the executive officer to tax under Section 4999 of the
Internal Revenue Code, he or she may elect to receive in lieu of such lump
sum, a reduced amount resulting in equal or greater net after-tax aggregate
payments than would be received by payment of the lump sum.
In addition, the Company has made commitments to participants in the
Severance Plan that if it terminates the employment of a participant at its
convenience rather than as a result of a change of control, it will continue
the participant's base salary and certain benefits for a period ranging from
nine to 36 months. No payments are made in the event of a voluntary
termination (which does not include termination due to an adverse change in
conditions of employment) or termination for cause. In addition, the period
during which salary is continued and benefits are paid does not extend beyond
attainment of age 65 or attainment of 85 or more combined years of age and
service with the Company.
Other arrangements relating to a change of control contained in existing
Company benefit plans are as follows. Under the 1977 and 1987 Stock Option
Plan and the proposed 1997 Stock Option Plan, all outstanding stock options
held by employees, whether or not then currently exercisable, become
immediately exercisable upon a change of control. Under the Non-Employee
Director Stock Option Plan, all outstanding options granted to non-employee
directors also become immediately exercisable upon a change of control
regardless of whether or not they were then fully vested and exercisable or
the options may be surrendered for the difference between their exercise price
and the stock's current value. In addition, the vesting of restricted stock
awards to employees granted under the Executive Incentive Compensation Plan is
accelerated upon a change of control. With respect to the Supplemental
Employees' Retirement Plan, which is an unfunded plan, the Company has
arranged for a letter of credit which requires the issuing bank to fund the
accrued benefits payable under such plan in the event of a change of control
of the Company and the Company's refusal to pay the benefit. Funding will be
made by payments to a trust, which currently is subject to the claims of the
Company's creditors in the event of an insolvency.
COMPENSATION COMMITTEE INTERLOCKS
As discussed above, the members of the P&O Committee during 1996 were Mrs.
Conway and Messrs. Alden, Ferguson, Johnson, Kendall and Lewis. All six
members are non-management directors, and none has any direct or indirect
material interest in or relationship with the Company or any of its
subsidiaries, other than stockholdings as discussed above and as related to
his or her position as director. None of the executive officers of the Company
has served on the Board of Directors or compensation committee of any other
entity, any of whose officers served either on the Company's Board of
Directors or the P&O Committee.
18
<PAGE>
P&O COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Company's executive compensation practices are designed to support its
business goals of fostering profitable growth and increasing shareholder
value. The Company seeks to align the interests of executives and stockholders
through the use of stock-based compensation plans. In addition, the Company's
policy is to pay for performance; that is, the better the individual, team,
business unit and/or global performance against established goals and
objectives, the greater the compensation reward. Finally, each element of the
Company's compensation package is designed to be competitive with the
compensation practices of other leading consumer products and industrial
companies.
As noted above, the P&O Committee is composed entirely of non-management
directors. In addition to using Company resources, the P&O Committee
periodically retains the services of independent compensation consultants to
help it assess the competitiveness and effectiveness of the Company's
executive compensation practices in general and for the Chief Executive
Officer in particular. In 1994, Towers Perrin consulted with the P&O Committee
in its review of Section 162(m) of the Internal Revenue Code and in developing
modifications to existing compensation plans to qualify compensation paid to
its executive officers for deductibility. The Company's practice is to
maximize the deductibility of compensation paid to executive officers, to the
extent possible consistent with the Company's objectives, in order to attract
and retain high caliber executives. In 1995, Towers Perrin conducted a
comprehensive review of the Company's long term incentive program including
the appropriateness of the performance measures, payout levels relative to
performance and the competitiveness of the plan design features. In 1996,
Hewitt & Associates and Towers Perrin contributed to a comprehensive review of
the competitiveness of the Company's executive salary, bonus and long term
incentive programs.
The P&O Committee reviewed and recommended the overall compensation of Reuben
Mark, the Chairman and Chief Executive Officer of the Company, subject to the
approval of the non-management directors. In addition, the P&O Committee
reviewed and approved, and the Board ratified, the overall compensation of the
other executive officers of the Company. The key elements of compensation used
by the Company are base salary and performance-based incentives including
annual cash bonuses, stock options, restricted stock grants and other long
term incentives. This report discusses the Company's practices regarding each
of these elements as applied to the executive officers generally and concludes
with a separate discussion of Mr. Mark's compensation in particular.
BASE SALARY
The Company's practice is to pay salaries that are competitive with a
comparison group of other leading consumer products and industrial companies
(the "Comparison Group"). The companies in the Comparison Group are selected
by the Company's Human Resources department based on the recommendation of
independent compensation consultants and are reviewed and approved by the P&O
Committee. While the Comparison Group is comprised primarily of consumer
products companies, companies outside the consumer products field are also
included because the Company believes, and the P&O Committee concurs, that the
market for executive talent is broader than simply other consumer products
companies. The peer group used in the Stock Price Performance Graphs on pages
is composed solely of companies with whom the Company competes in one or
more of its primary businesses. The composition of the Comparison Group is
updated periodically.
19
<PAGE>
The midpoint of the salary range for executive officers is set at the median
of the Comparison Group, with salaries above the median available to
exceptional performers and key contributors to the success of the Company.
Annual salary adjustments are based on individual performance, assumption of
new responsibilities, competitive data from the Comparison Group and the
Company's overall annual salary budget guidelines. If an executive officer is
responsible for a particular business unit, this unit's financial results are
taken into account. In addition, other performance measures, such as
improvements in customer service, faster product development, improving market
share of Colgate brands, global expansion and productivity increases, are
considered.
The direct manager of each officer determines such officer's salary increase
based on the factors discussed above. In 1996, salaries for executive officers
as a group were at approximately the median of the Comparison Group for
similar jobs.
ANNUAL CASH BONUS
In 1996, the Company's executive officers were eligible for annual cash
bonuses under the Executive Incentive Compensation Plan ("EICP" or the "EICP
Plan"). Annual bonuses under the EICP Plan for certain covered executives are
payable only upon the successful attainment of specific performance measures
established in advance by the P&O Committee. During 1996, these covered
executives included the Chief Executive Officer and the six executive officers
who report directly to him (the "Covered Executives"). The amount of the
annual EICP bonus for these Covered Executives is payable based upon the
degree of achievement of the pre-established performance measures, subject to
the P&O Committee's discretion to adjust awards downward. The pre-established
performance measure for 1996 was an earnings per share goal.
Bonuses for executive officers who were not Covered Executives were determined
by a formula based on the financial performance of the entire Company as a
whole or the business unit to which an executive was assigned as well as
performance against specific individual and team goals. Company-wide financial
performance measures were based on the budgetary process which permits
adjustments from time to time to take account of unusual items beyond the
control of the Company or business unit involved. For 1996, the Company-wide
financial performance measure was an earnings per share goal, and this applied
to all executive officers with corporate-wide responsibilities. The business
unit financial measures were sales and profit, and these applied to all
officers with specific business unit responsibilities.
All executive officers are assigned threshold, target and maximum bonus award
opportunities based on their grade levels. Target award opportunities are
generally set at the median of the Comparison Group. If the Company or
business unit exceeds its earnings per share or sales and profit goals, above-
target bonuses may be granted. If the minimum financial goals are not met,
bonuses, if any, may be below the target level.
During 1996, the Company exceeded its earnings per share goal and most
business units exceeded their sales and profit goals; therefore, bonuses for
executive officers as a group exceeded median bonus levels of the Comparison
Group.
LONG TERM PERFORMANCE-BASED INCENTIVES
Colgate has two principal compensation vehicles for encouraging the long term
growth and performance of the Company. The first is stock options granted
under the 1987 Stock Option Plan, and
20
<PAGE>
the second is restricted stock awards under the Long Term Global Growth
Program of the EICP Plan. In addition, from time to time, restricted stock
awards also may be granted for special recognition and retention purposes.
THE 1987 STOCK OPTION PLAN
Under the Company's 1987 Stock Option Plan, stock options are generally
granted annually to executive officers. Guidelines for the size of stock
option awards are developed based on factors similar to those used to
determine salary and bonus, including a review of the practices of the
Comparison Group. Since the Company and the P&O Committee view the granting of
stock options as a way to obtain competitive compensation advantage, the
Company's strategy is to set target award levels at the 75th percentile of the
Comparison Group. Actual award grants may vary from the target based on
individual performance, business unit performance or the assumption of
increased responsibilities. In the event of poor corporate performance, the
P&O Committee may decide not to grant annual stock options. As a result of the
comprehensive executive compensation review conducted in 1996, the P&O
Committee concluded that 1996 stock option awards for executive officers as a
group were below the Comparison Group target award levels. The amount and
terms of current stock holdings by executive officers did not influence grant
decisions.
Stock options during 1996 (other than options granted under the Accelerated
Ownership Feature described on page in footnote ) were granted with an
exercise price equal to the market price of the Common Stock on the date of
grant and have a ten-year term. They vest in equal annual installments over
three years. This approach is designed to motivate the creation of stockholder
value over the long term since the full benefit of the stock option grant
cannot be realized unless stock price appreciation occurs over a number of
years. In addition, the Accelerated Ownership Feature of the 1987 Stock Option
Plan facilitates ownership and retention of the Common Stock by executive
officers of the Company. Since its inception, the Accelerated Ownership
Feature has resulted in a significant increase in ownership of Common Stock by
executive officers of the Company.
THE LONG TERM GLOBAL GROWTH PROGRAM
Under the Long Term Global Growth Program, long term incentive awards are
granted based on whether the Company achieves targeted levels of growth in
compound global annual net sales and earnings per share over a three-year
measurement period. In addition to these financial measures, supplemental
measures dealing with non-financial business fundamentals are established from
time to time. These performance measures, for all executive officers other
than Covered Executives, may be adjusted for unusual items beyond the control
of the Company or business unit involved.
Each year an executive officer is assigned a threshold, target and maximum
award opportunity that is realizable if the Company meets or exceeds specific
financial goals, e.g., sales and earnings per share, over the following three
years. The target award opportunities are set in dollars as a percentage of
salary at approximately from the median to the 75th percentile of the
Comparison Group, except for the Chairman's target which is expressed as a
specific number of shares. At the end of the measurement period, awards are
made in the form of restricted stock based on the fair market value of the
Common Stock on the date the award is actually made. Grants of awards are
subject to the discretion of the P&O Committee. Once awarded after the three-
year measurement period, the restricted stock grants are subject to possible
forfeiture for an additional three year period if the executive's employment
with the Company is terminated during that time.
21
<PAGE>
The P&O Committee granted restricted stock awards to executive officers under
the Long Term Global Growth Program for 1996 based on sales and earnings per
share growth over the 1994 through 1996 measurement period. All participants
received an award below target based on a pre-established formula relating
sales and earnings per share growth to target. In addition, the Board of
Directors granted discretionary restricted stock awards to certain executive
officers in order to recognize properly the contributions of these executives
to the Company's outstanding 1996 results and to help ensure the retention of
these executives. The amount and terms of current stock holdings by executive
officers did not influence grant decisions.
1996 CHIEF EXECUTIVE OFFICER COMPENSATION
The P&O Committee reviewed and recommended the overall compensation of Reuben
Mark, the Chairman and Chief Executive Officer of the Company, subject to the
approval of the directors of the Company other than Mr. Mark, all of whom are
non-management directors. As discussed in the Base Salary section above, the
midpoint of the salary range for executive officers is set at the median of
the Comparison Group, with salaries above the median available to exceptional
performers and key contributors to the success of the Company. In setting Mr.
Mark's 1996 base salary, the key factor the P&O Committee considered was the
Company's pre-established guidelines for determining salary increases. Other
factors included the Company's success in exceeding its sales and profit goals
in 1996, Mr. Mark's tenure as Chief Executive Officer, his individual
performance and contributions to the continuing success and increased value of
the Company and a comparison of base salaries of other chief executive
officers in the Comparison Group. During 1996, the P&O Committee increased Mr.
Mark's annual salary by 4%. Mr. Mark's salary is at approximately the sixtieth
percentile of the Comparison Group.
As discussed above in the Annual Cash Bonus section, the Chief Executive
Officer's annual EICP bonus is payable based upon the successful attainment of
specific performance measures established in advance by the P&O Committee,
subject to the P&O Committee's discretion to adjust the awards. During 1996,
the pre-established performance measure was an earning per share goal. Based
on this bonus formula, Mr. Mark was awarded an annual bonus of $1,656,302.
Since the Company exceeded its earnings per share goal, bonuses for the Chief
Executive Officer and executive officers as a group exceeded median bonus
levels of the Comparison Group.
Mr. Mark is also eligible for awards under the Long Term Global Growth Program
discussed above. Mr. Mark's target award opportunity under this program,
stated in shares of Common Stock rather than cash, for the measurement period
1994-1996 was 24,300 shares. As discussed above in the Long Term Global Growth
Program section, the P&O Committee granted restricted stock awards to
executive officers under the Long Term Global Growth Program for 1996 based on
sales and earnings per share growth over the 1994 through 1996 measurement
period. The Chief Executive Officer and all executive officers as a group
received an award below target based on a pre-established formula relating
sales and earnings per share growth to target. Mr. Mark was granted 15,601
restricted shares for the 1994-1996 measurement period, below his target of
24,300. In addition, the Board of Directors granted Mr. Mark 6,625 additional
restricted shares in order to recognize properly his contribution to the
Company's outstanding 1996 results.
No new stock option grants were granted to Mr. Mark in 1996.
22
<PAGE>
In summary, the P&O Committee believes that executive performance
significantly influences Company performance. Therefore the P&O Committee's
approach to executive compensation is guided by the principle that executives
should have the potential for increased earnings when performance objectives
are exceeded, provided there is appropriate downside risk if performance
targets are not met.
The foregoing report has been furnished by Mrs. Conway (Chair) and Messrs.
Alden, Ferguson, Johnson, Kendall and Lewis.
STOCK PRICE PERFORMANCE GRAPHS
The following graphs compare cumulative total stockholder returns on the
Common Stock against the S&P Composite-500 Stock Index and a peer company
index for a five-year and a ten year period each ending December 31, 1996.
1991 1992 1993 1994 1995 1996
Colegate-Palmolive 100 117 134 139 159 213
Peer Group 100 104 112 128 165 219
S&P 500 100 108 118 120 165 203
23
<PAGE>
<TABLE>
<CAPTION>
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Colgate-Palmolive 100 99 126 175 209 284 331 379 396 451 606
Peer Group 100 123 132 187 198 244 260 281 317 408 538
S&P 500 100 105 123 162 157 204 220 242 245 337 415
</TABLE>
The 1996 return for the Common Stock shown on the above graphs is based on a
closing price per share as of December 31, 1996 of $92.25; as of
, 1997, the closing price per share of the Common Stock was $ .
The companies included in the peer company index compete with the Company in
one or more of its primary businesses and are the same as included in last
year's proxy statement, except for The Dial Corp. which, as a result of a
spin-off of a major portion of its business in 1996, no longer has a trading
history prior to 1996. The companies are as follows: Avon Products, Inc.,
Clorox Company, Dow Chemical Company (Dow Brands), Gillette Company, Ralston
Purina Company (Pet Foods Division), The Procter & Gamble Company, Quaker Oats
Company (Pet Foods Division) and Unilever N.V. The Comparison Group discussed
in the P&O Committee Report earlier in this proxy statement includes other
industrial companies and consumer products companies for reasons discussed in
the report.
24
<PAGE>
2. APPROVAL OF SELECTION OF AUDITORS
The Board of Directors, on the recommendation of the Audit Committee, has
selected Arthur Andersen LLP as auditors for the year ending December 31,
1997. Arthur Andersen LLP has audited the accounts of the Company since its
incorporation. The Board of Directors considers it desirable to continue the
services of Arthur Andersen LLP. Representatives of Arthur Andersen LLP are
expected to be present at the meeting. They will have the opportunity to make
a statement and will be available to respond to appropriate questions. If the
stockholders should fail to approve the selection of auditors, auditors will
be designated by the Board of Directors.
The Board recommends a vote IN FAVOR of the approval of the selection of
Arthur Andersen LLP as auditors.
3. ADOPTION OF 1997 STOCK OPTION PLAN
INTRODUCTION
At the Annual Meeting, the Company's stockholders will be requested to
consider and act upon a proposal to adopt the Colgate-Palmolive Company 1997
Stock Option Plan attached as Appendix A to this proxy statement (the "1997
Plan").
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE APPROVAL OF THE
1997 PLAN.
DESCRIPTION OF THE 1997 PLAN
Set forth below is a summary of certain important features of the 1997 Plan,
which summary is qualified in its entirety by reference to the actual plan
attached as Appendix A.
The purpose of the 1997 Plan is to give the Company a competitive advantage in
attracting, retaining and motivating officers and employees and to link
employee incentives directly to the profitability of the Company's businesses
and increases in stockholder value.
The 1997 Plan will be administered by the P&O Committee. The P&O Committee
selects participants from among those executives and other key employees of
the Company and its subsidiaries who are in a position to contribute
materially to the success of the Company and determines the amounts, times,
forms, terms and conditions of grants. Approximately 1,100 employees,
including Executive Officers, will be eligible for grants under the 1997 Plan.
Grants may be in the form of options (including incentive stock options) to
purchase shares of the Company's Common Stock and stock appreciation rights
(collectively "stock incentives"). Either authorized but unissued shares or
treasury shares may be used. The 1997 Plan provides for grants of stock
incentives covering up to fifteen (15,000,000) million shares of Common Stock
(the "Plan Maximum"). However, except for purposes of determining the number
of shares available for grants of incentive stock options (which shall remain
fixed at such number), the Plan Maximum shall be increased by the number of
shares of Common Stock used to pay the exercise price of stock options
25
<PAGE>
and the number of stock options which have terminated upon expiration,
cancellation and forfeiture. For purposes of assuring the deductibility of
Awards under Section 162(m) of the Internal Revenue Code, no participant may be
granted an award in any one year which exceeds 0.5% of the number of issued and
outstanding shares of Common Stock (the "Individual Maximum"). In the case of
multi-year awards, no participant may be granted an award which exceeds the
product of the Individual Maximum and the number of years covered by the grant
(regardless of how shares are allocated over such period). Stock appreciation
rights may be granted on a "free-standing" basis or in conjunction with all or
a portion of the shares covered by an option, either at the time of grant or at
any time during the term of the option (except that in the case of incentive
stock options, such rights may be granted only at the time of grant of such
option). Stock incentive awards are subject to such provisions as the P&O
Committee determines and may be exercised at one time or in such installments
over the exercise period as determined by the P&O Committee. The option price
per share cannot be less than the fair market value of Common Stock on the date
each such option is granted. On March , 1997, the closing price of the
Company's Common Stock was $ per share as reported for New York Stock
Exchange Composite Transactions.
Where two or more stock incentives have been granted in conjunction with one
another, such stock incentives are not cumulative. That is, the exercise of one
of such stock incentives will result in the cancellation of the related stock
incentives. The voluntary surrender of all or a portion of any stock incentive
may be conditioned upon the granting of a new stock incentive. In the event of
any change in Common Stock, such as a stock split or stock dividend, the P&O
Committee may make appropriate adjustment in the number of shares subject to
the 1997 Plan and in the terms of any grants. On March 6, 1997, the P&O
Committee approved an adjustment to the Plan Maximum to reflect the two-for-one
stock dividend payable on May 15, 1997.
Each stock incentive is exercisable in whole or in part, prior to its
cancellation or termination, by written notice to the Company. If an option is
being exercised, such notice must be accompanied by payment in full of the
purchase price by check or in another form acceptable to the P&O Committee,
including shares of Common Stock. The 1997 Plan provides that participants who
exercise stock options under the 1997 Plan (or the 1987 Plan, the 1977 Plan or
the 1996 Stock Option Plan) and pay the purchase price and/or withholding taxes
in shares of Common Stock (which shares shall have been owned for at least six
months) will be granted a replacement option in a number equal to the number of
shares paid to the Company as the purchase price and for withholding taxes.
Replacement options will be exercisable at a price equal to the fair market
value of the Common Stock on the date of the grant of the replacement option
and will expire no later than the expiration date of the original option.
Replacement options can not be granted more than twice each year to the same
participant and will not be exercisable for at least six months from the date
of grant. In addition, as a condition to the grant of a replacement option, the
recipient must agree not to resell, for a period of up to two years, the number
of shares received upon exercise of the original option which are in excess of
the number of shares used to exercise the original option. Proceeds, if any,
from the exercise of options under the 1997 Plan will be used for general
corporate purposes. Stock incentives are not transferable except by will or by
laws of descent and distribution unless otherwise permitted by the P&O
Committee.
In general, each stock incentive will terminate upon the earlier of (i) the
date fixed by the P&O Committee when the stock incentive is granted or (ii)
unless determined otherwise by the P&O Committee, termination of employment or,
to the extent the stock incentive was then exercisable, three
26
<PAGE>
months after the participant's termination of employment. In the event of
death, retirement or disability, the stock incentive may be fully exercised,
whether or not it was then exercisable (unless provided otherwise in the stock
incentive agreement), for up to three years thereafter. If a participant's
employment is terminated for cause, however, his or her ability to exercise any
stock incentive terminates.
Upon exercise of a stock appreciation right, the participant will receive
either cash or shares of Common Stock or both, as the P&O Committee may
determine, equal to the excess of the fair market value (of a share of Common
Stock) on the date of exercise over the price per share specified in the
related stock option.
The Company may make loans to such participants as the P&O Committee, in its
discretion, may determine in connection with the exercise of options in an
amount up to the exercise price of the option plus any applicable withholding
taxes. In no event may any such loan exceed the fair market value, at the date
of exercise, of the shares covered by the option exercised.
In the event of a change of control of the Company (as defined in the 1997
Plan), all stock options and stock appreciation rights which have not
terminated and which are then held by any participant will become immediately
exercisable. In addition, unless the P&O Committee determined otherwise at the
time of grant, each participant generally will have the right (whether or not
an option is then exercisable) during the sixty-day period beginning on a
change of control of the Company, whether or not the related option is
exercisable, to receive in cash an amount equal to the excess of (i) the
highest fair market value per share of Common Stock during the sixty-day period
ending on the date the change of control occurred over (ii) the exercise price
per share of such option.
The 1997 Plan has a ten year term. The Board may amend, alter or discontinue
the 1997 Plan, without stockholder approval, to the extent it deems appropriate
in the best interests of the Company except for amendments for which
stockholder approval would be required to retain the benefits of Section 162(m)
of the Internal Revenue Code of 1986. Nevertheless, no amendment, alteration or
discontinuance may be made which would impair the rights of any outstanding
grants of stock incentives, unless otherwise agreed to by the holders thereof.
Federal Tax Consequences. The principal federal income tax consequences of the
1997 Plan under the Internal Revenue Code of 1986 as presently in effect to
participants and the Company are set forth below.
The grant of non-qualified stock options and stock appreciation rights does not
result in any taxable income to the participant or in any tax deduction to the
Company. Upon the exercise of a non-qualified option, the excess of the market
value of the share acquired over its cost to the participant is taxable to the
participant as ordinary income and is deductible by the Company. The
participant's tax basis for the shares is their fair market value at the time
of exercise. Upon the exercise of a stock appreciation right, the cash or fair
market value of the stock received is taxable to the participant as ordinary
income and is deductible by the Company. The participant's tax basis for any
shares received is the market value thereof at the time of exercise. Income
realized on the exercise of a non-qualified stock option or stock appreciation
right is subject to federal and (where applicable) state and local withholding
taxes.
27
<PAGE>
If a non-qualified stock option is exercised and the option price is paid by
exchanging other appreciated shares of the Company's Common Stock for the
shares subject to the option, the following tax consequences are applicable:
(a) regarding the stock evenly exchanged, no taxable gain or loss will be
recognized by the participant and the tax basis and holding period of the old
stock carries over to the new stock and (b) regarding the additional shares
received, the fair market value of the additional shares will be taxable to
the participant as ordinary income, the consequences of which are described
above.
The exercise of an incentive stock option generally will not result in income
to the participant if (i) the option is exercised within three months after
the termination of employment (with other special rules for death or
disability) and (ii) no disposition of the shares received upon exercise is
made within two years from the date of grant or within one year after the date
of exercise (collectively, the "holding periods"), whichever is later.
However, the participant could be subject to the minimum tax on tax
preferences upon the exercise of an incentive stock option, depending upon his
or her individual tax situation. In the event of a sale of the shares received
upon exercise of an incentive stock option after the expiration of the holding
periods, any appreciation of the shares received above the exercise price
should qualify as capital gain. The Company is not entitled to a tax deduction
with respect to the exercise of an incentive stock option nor with respect to
any disposition of the acquired shares after the expiration of the holding
periods. However, if such shares are sold by the participant before the end of
the holding period, the participant will recognize income and the Company will
be entitled to a deduction equal to the lesser of the fair market value of the
shares on the date of exercise minus the option price, or the amount realized
on disposition minus the option price. Any gain in excess of the ordinary
income portion will be taxable as long-term or short-term capital gain,
depending on the holding period.
THE BOARD OF DIRECTORS BELIEVES THAT APPROVAL OF THE COLGATE-PALMOLIVE COMPANY
1997 STOCK OPTION PLAN IS IN THE BEST INTERESTS OF ALL STOCKHOLDERS AND,
ACCORDINGLY, RECOMMENDS A VOTE FOR THE PROPOSED PLAN. YOUR PROXY WILL BE SO
VOTED UNLESS YOU SPECIFY OTHERWISE.
4. AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION TO INCREASE NUMBER OF
AUTHORIZED SHARES OF COMMON STOCK FROM 500,000,000 SHARES TO 1,000,000,000
SHARES
On March 6, 1997, the Company's Board of Directors unanimously adopted a
resolution declaring it advisable to amend the Company's Restated Certificate
of Incorporation to increase the number of authorized shares of Common Stock,
$1.00 par value, from 500,000,000 to 1,000,000,000 shares, subject to approval
by the stockholders. No increase in the number of authorized shares of
Preferred Stock or Convertible Preference Stock is being proposed at this
time. The form of the proposed amendment (the "Amendment") is attached as
Appendix B.
On March 6, 1997, the Board of Directors approved a two-for-one stock dividend
for all stockholders of record on April 25, 1997, payable on May 15, 1997. The
two-for-one stock dividend will reduce the number and aggregate market value
of the shares of Common Stock available for issuance by the Company for
corporate purposes.
Management believes that the Amendment is in the best interests of the Company
and its stockholders, to maintain the Company's flexibility in responding to
future business and market needs
28
<PAGE>
and opportunities. To preserve in market value terms the shares of Common
Stock available for issuance by the Company, management believes that it is
appropriate to increase the Company's authorized shares of Common Stock in
proportion to the stock dividend. These additional shares will be used for
general corporate purposes, including use for additional stock splits,
financing transactions, acquisitions, stock dividends, rights or securities
convertible into Common Stock and employee stock option and other stock
ownership plans.
Management has no plan at the present time for the issuance or use of the
additional shares of Common Stock to be authorized by the Amendment. The
issuance of additional shares of authorized Common Stock would be within the
discretion of the Board of Directors, without the requirement of further
action by stockholders unless such action is required by applicable law or the
rules of any stock exchange on which the Company's securities may then be
listed. All newly authorized shares would have the same rights as the
presently authorized shares, including the right to cast one vote per share
and to participate in dividends when and to the extent declared and paid.
Under the Company's Restated Certificate of Incorporation, no holders of any
class of stock of the Company are entitled to any preemptive rights with
respect to any shares of the Company's capital stock.
Management is unaware of any specific effort to obtain control of the Company,
and has no present intention of using the proposed increase in the number of
authorized shares of Common Stock as an anti-takeover device. However, the
Company's authorized but unissued capital stock could be used to make an
attempt to effect a change in control more difficult.
YOUR BOARD RECOMMENDS A VOTE FOR THE AMENDMENT OF THE COMPANY'S RESTATED
CERTIFICATE OF INCORPORATION TO INCREASE THE NUMBER OF AUTHORIZED SHARES OF
COMMON STOCK.
FUTURE STOCKHOLDER PROPOSALS
Stockholder proposals for inclusion in the proxy materials relating to the
1998 Annual Meeting of Stockholders must be received by the Company no later
than November 25, 1997.
OTHER BUSINESS
Management has no present intention of submitting any matters to the meeting
other than those set forth above. It knows of no additional matters that will
be presented by others. However, with respect to any other business that may
come before the meeting, the persons designated in the enclosed proxy will
vote in accordance with their best judgment.
By order of the Board of Directors.
Andrew D. Hendry
Senior Vice President, General Counsel and Secretary
29
<PAGE>
APPENDIX B
AMENDMENT TO RESTATED CERTIFICATE OF INCORPORATION
The first paragraph of Article FOURTH is amended to read as follows:
FOURTH: 1. The total number of shares of all classes of stock which the
Company shall have the authority to issue is 1,050,262,150 shares, divided
into 250,000 shares of Preferred Stock without par value, 12,150 shares of
$3.00 Convertible Second Preferred Stock without par value, 50,000,000 shares
of Preference Stock without par value and 1,000,000,000 shares of Common Stock
of par value of $1 per share.*
- --------
* Changes to the text are indicated by underlining.
B-1
<PAGE>
LOGO
NOTICE OF ANNUAL MEETING
OF STOCKHOLDERS AND PROXY STATEMENT
LOGO Printed on Recycled Paper
<PAGE>
COLGATE-PALMOLIVE COMPANY
300 PARK AVENUE, NEW YORK, NY 10022
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR ANNUAL MEETING ON MAY 8, 1997
P The undersigned hereby appoints as proxies, with full power of
R substitution to each, REUBEN MARK, JILL K. CONWAY and HOWARD B. WENTZ, JR.
O (the Proxy Committee) to vote as designated on the reverse side, all
X shares which the undersigned would be entitled to vote at the annual
Y meeting of stockholders of the Company to be held at New York, New York on
May 8, 1997 or at any adjournments thereof. Action hereunder may be taken
by a majority of said proxies or their substitutes who are present or if
only one be present, then by that one.
Election of Directors, Nominees:
J.K. Conway, R.E. Ferguson,
E.M. Hancock, D.W. Johnson, J.P. Kendall,
R.J. Kogan, D.E. Lewis, R. Mark,
H.B. Wentz, Jr.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE
BOXES, SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO
VOTE IN ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXY
COMMITTEE CANNOT VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
(Continued and to be signed on other side.)
<PAGE>
[X] Please mark your |
votes as in this example. ---
This proxy when properly executed will be voted in the manner directed
herein. If no direction is made, this proxy will be voted in accordance with the
Board's recommendations.
- --------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR Items 1, 2, 3 and 4.
- --------------------------------------------------------------------------------
FOR WITHHELD
1. Election of [_] [_]
Directors.
(see reverse)
FOR, except vote withheld from the following nominee(s):
- --------------------------------------------------------
FOR AGAINST ABSTAIN
2. Approve selection of Arthur Andersen LLP [_] [_] [_]
as Auditors.
FOR AGAINST ABSTAIN
3. Adopt the 1997 Stock Option Plan. [_] [_] [_]
4. Authorization of additional shares of [_] [_] [_]
common stock.
- --------------------------------------------------------------------------------
In its discretion, the Proxy Committee is authorized to vote upon such other
business as may properly come before the meeting.
- --------------------------------------------------------------------------------
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
---------------------------------------
---------------------------------------
SIGNATURE(S) DATE
================================================================================
FOLD AND DETACH HERE
ANNUAL MEETING
OF
COLGATE-PALMOLIVE COMPANY STOCKHOLDERS
THURSDAY, MAY 8, 1997
MARRIOTT MARQUIS
10:00 A.M.
BROADWAY BALLROOM
1535 BROADWAY
(45TH STREET AND BROADWAY)
NEW YORK, NY
. Your vote is important to us. Please detach the above proxy, sign the card
and insert it in the enclosed envelope at your earliest convenience. Further,
be advised that your vote is held in confidence by our outside tabulator,
First Chicago Trust Company of New York.
. If you intend to attend the meeting, please fill out and mail separately the
enclosed ticket request.
<PAGE>
COLGATE-PALMOLIVE MEXICO
STOCK/SAVINGS PLAN
To: Plan Participants
As a participant in the above Plan, you may direct the manner in which
shares of Company Common Stock allocable to your interest in the funds
established under such Plan shall be voted by the Trustee at the annual meeting
of stockholders to be held at New York, New York on May 8, 1997 or at any
adjournment thereof.
Election of Directors, Nominees:
J.K. Conway, R.E. Ferguson,
E.M. Hancock, D.W. Johnson,
J.P. Kendall, R.J. Kogan, D.E. Lewis,
R. Mark, H.B. Wentz, Jr.
You are encouraged to specify your choices by marking the appropriate boxes, SEE
REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance
with the Board of Directors' recommendations. If a signed card is not returned,
shares allocable to your interest in the Plan may be voted in the same
proportion as shares for which instruction cards are received.
(Continued and to be signed on other side.)
<PAGE>
[X] Please mark your | 0935
votes as in this example. ---
This proxy when properly executed will be voted in the manner directed
herein. If no direction is made, this proxy will be voted by the Trustee in
accordance with the Board's recommendations.
- -------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR Items 1, 2, 3 and 4.
- --------------------------------------------------------------------------------
FOR WITHHELD
1. Election of [_] [_]
Directors.
(see reverse)
FOR, except vote withheld from the following nominee(s):
- --------------------------------------------------------
FOR AGAINST ABSTAIN
2. Approve selection of Arthur Andersen LLP [_] [_] [_]
as Auditors.
FOR AGAINST ABSTAIN
3. Adopt the 1997 Stock Option Plan. [_] [_] [_]
4. Authorization of additional shares of [_] [_] [_]
common stock.
- --------------------------------------------------------------------------------
If voting by proxy, the Trustee is directed to authorize the Proxy Committee to
vote, in its discretion, upon such other business as may properly come before
the meeting.
- --------------------------------------------------------------------------------
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
---------------------------------------
---------------------------------------
SIGNATURE(S) DATE
================================================================================
FOLD AND DETACH HERE
<PAGE>
COLGATE-PALMOLIVE GERMANY
STOCK/SAVINGS PLAN
To: Plan Participants
As a participant in the above Plan, you may direct the manner in which
shares of Company Common Stock allocable to your interest in the funds
established under such Plan shall be voted by the Trustee at the annual meeting
of stockholders to be held at New York, New York on May 8, 1997 or at any
adjournment thereof.
Election of Directors, Nominees:
J.K. Conway, R.E. Ferguson,
E.M. Hancock, D.W. Johnson,
J.P. Kendall, R.J. Kogan, D.E. Lewis,
R. Mark, H.B. Wentz, Jr.
You are encouraged to specify your choices by marking the appropriate boxes, SEE
REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance
with the Board of Directors' recommendations. If a signed card is not returned,
shares allocable to your interest in the Plan may be voted in the same
proportion as shares for which instruction cards are received.
(Continued and to be signed on other side.)
<PAGE>
[X] Please mark your | 1956
votes as in this example. ---
This proxy when properly executed will be voted in the manner directed
herein. If no direction is made, this proxy will be voted by the Trustee in
accordance with the Board's recommendations.
- -------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR Items 1, 2, 3 and 4.
- --------------------------------------------------------------------------------
FOR WITHHELD
1. Election of [_] [_]
Directors.
(see reverse)
FOR, except vote withheld from the following nominee(s):
- --------------------------------------------------------
FOR AGAINST ABSTAIN
2. Approve selection of Arthur Andersen LLP [_] [_] [_]
as Auditors.
FOR AGAINST ABSTAIN
3. Adopt the 1997 Stock Option Plan. [_] [_] [_]
4. Authorization of additional shares of [_] [_] [_]
common stock.
- --------------------------------------------------------------------------------
If voting by proxy, the Trustee is directed to authorize the Proxy Committee to
vote, in its discretion, upon such other business as may properly come before
the meeting.
- --------------------------------------------------------------------------------
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
---------------------------------------
---------------------------------------
SIGNATURE(S) DATE
================================================================================
FOLD AND DETACH HERE
<PAGE>
COLGATE-PALMOLIVE U.K.
STOCK/SAVINGS PLAN
To: Plan Participants
As a participant in the above Plan, you may direct the manner in which
shares of Company Common Stock allocable to your interest in the funds
established under such Plan shall be voted by the Trustee at the annual meeting
of stockholders to be held at New York, New York on May 8, 1997 or at any
adjournment thereof.
Election of Directors, Nominees:
J.K. Conway, R.E. Ferguson,
E.M. Hancock, D.W. Johnson,
J.P. Kendall, R.J. Kogan, D.E. Lewis,
R. Mark, H.B. Wentz, Jr.
You are encouraged to specify your choices by marking the appropriate boxes, SEE
REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance
with the Board of Directors' recommendations. If a signed card is not returned,
shares allocable to your interest in the Plan will not be voted.
(Continued and to be signed on other side.)
<PAGE>
[X] Please mark your | 1957
votes as in this example. ---
This proxy when properly executed will be voted in the manner directed
herein. If no direction is made, this proxy is executed and returned, this proxy
will be voted by the Trustee/Custodian in accordance with the Board's
recommendations.
- -------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR Items 1, 2, 3 and 4.
- --------------------------------------------------------------------------------
FOR WITHHELD
1. Election of [_] [_]
Directors.
(see reverse)
FOR, except vote withheld from the following nominee(s):
- --------------------------------------------------------
FOR AGAINST ABSTAIN
2. Approve selection of Arthur Andersen LLP [_] [_] [_]
as Auditors.
FOR AGAINST ABSTAIN
3. Adopt the 1997 Stock Option Plan. [_] [_] [_]
4. Authorization of additional shares of [_] [_] [_]
common stock.
- --------------------------------------------------------------------------------
If voting by proxy, the Trustee is direct to authorize the Proxy Committeee to
vote, in its discretion, upon such other business as may properly come before
the meeting.
- --------------------------------------------------------------------------------
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
---------------------------------------
---------------------------------------
SIGNATURE(S) DATE
================================================================================
FOLD AND DETACH HERE
<PAGE>
COLGATE-PALMOLIVE PHILS., INC.
STOCK/SAVINGS PLAN
To: Plan Participants
As a participant in the above Plan, you may direct the manner in which
shares of Company Common Stock allocable to your interest in Funds "C" and "D"
of the CPPI Employees' Retirement Plan shall be voted by the Trustee/Custodian
at the annual meeting of stockholders to be held at New York, New York on May 8,
1997 or at any adjournment thereof.
Election of Directors, Nominees:
J.K. Conway, R.E. Ferguson,
E.M. Hancock, D.W. Johnson,
J.P. Kendall, R.J. Kogan, D.E. Lewis,
R. Mark, H.B. Wentz, Jr.
You are encouraged to specify your choices by marking the appropriate boxes, SEE
REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance
with the Board of Directors' recommendations. If a signed card is not returned,
shares allocable to your interest in the Plan will be voted by the Custodian in
accordance with the instructions of the Trustee.
(Continued and to be signed on other side.)
<PAGE>
[X] Please mark your | 1958
votes as in this example. ---
This proxy when properly executed will be voted in the manner directed
herein. If no direction is made and this proxy is executed and returned, this
proxy will be voted by the Trustee/Custodian in accordance with the Board's
recommendations.
- -------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR Items 1, 2, 3 and 4.
- --------------------------------------------------------------------------------
FOR WITHHELD
1. Election of [_] [_]
Directors.
(see reverse)
FOR, except vote withheld from the following nominee(s):
- --------------------------------------------------------
FOR AGAINST ABSTAIN
2. Approve selection of Arthur Andersen LLP [_] [_] [_]
as Auditors.
FOR AGAINST ABSTAIN
3. Adopt the 1997 Stock Option Plan. [_] [_] [_]
4. Authorization of additional shares of [_] [_] [_]
common stock.
- --------------------------------------------------------------------------------
If voting by proxy, the Trustee is directed to authorize the Proxy Committee to
vote, in its discretion, upon such other business as may properly come before
the meeting.
- --------------------------------------------------------------------------------
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
---------------------------------------
---------------------------------------
SIGNATURE(S) DATE
================================================================================
FOLD AND DETACH HERE
<PAGE>
COLGATE-PALMOLIVE COMPANY
EMPLOYEES SAVINGS AND INVESTMENT PLAN
To: Plan Participants
As a participant in the above Plan, you may direct the manner in which
shares of Company Common Stock and/or Convertible Preference Stock allocable to
your interest in the Trust Funds established under such Plan shall be voted by
the Trustee at the annual meeting of stockholders to be held at New York, New
York on May 8, 1997 or at any adjournment thereof.
Election of Directors, Nominees:
J.K. Conway, R.E. Ferguson,
E.M. Hancock, D.W. Johnson, J.P. Kendall,
R.J. Kogan, D.E. Lewis, R. Mark,
H.B. Wentz, Jr.
You are encouraged to specify your choices by marking the appropriate boxes, SEE
REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance
with the Board of Directors' recommendations. If a signed card is not returned,
shares allocable to your interest in the Plan will be voted in the same
proportion as shares for which instruction cards are received.
(Continued and to be signed on other side.)
<PAGE>
[X] Please mark your | 4061
votes as in this example. ---
This proxy when properly executed will be voted in the manner directed
herein. If no direction is made, this proxy will be voted by the Trustee in
accordance with the Board's recommendations.
- -------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR Items 1, 2, 3 and 4.
- --------------------------------------------------------------------------------
FOR WITHHELD
1. Election of [_] [_]
Directors.
(see reverse)
FOR, except vote withheld from the following nominee(s):
- --------------------------------------------------------
FOR AGAINST ABSTAIN
2. Approve selection of Arthur Andersen LLP [_] [_] [_]
as Auditors.
FOR AGAINST ABSTAIN
3. Adopt the 1997 Stock Option Plan. [_] [_] [_]
4. Authorization of additional shares of [_] [_] [_]
common stock.
- --------------------------------------------------------------------------------
If voting by proxy, the Trustee is directed to authorize the Proxy Committee to
vote, in its discretion, upon such other business as may properly come before
the meeting.
- --------------------------------------------------------------------------------
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
---------------------------------------
---------------------------------------
SIGNATURE(S) DATE
================================================================================
FOLD AND DETACH HERE
ANNUAL MEETING
OF
COLGATE-PALMOLIVE COMPANY STOCKHOLDERS
THURSDAY, MAY 8, 1997
. Your vote is important to us. Please detach the above proxy, sign the card
and insert it in the enclosed envelope at your earliest convenience. Further,
be advised that your vote is held in confidence by our outside tabulator,
First Chicago Trust Company of New York.
<PAGE>
COLGATE-PALMOLIVE FRANCE
STOCK/SAVINGS PLAN
To: Plan Participants
As a participant in the above Plan, you may direct the manner in which
shares of Company Common Stock allocable to your interest in the funds
established under such Plan shall be voted by the Trustee at the annual meeting
of stockholders to be held at New York, New York on May 8, 1997 or at any
adjournment thereof.
Election of Directors, Nominees:
J.K. Conway, R.E. Ferguson,
E.M. Hancock, D.W. Johnson,
J.P. Kendall, R.J. Kogan, D.E. Lewis,
R. Mark, H.B. Wentz, Jr.
You are encouraged to specify your choices by marking the appropriate boxes, SEE
REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance
with the Board of Directors' recommendations. If a signed card is not returned,
shares allocable to your interest in the Plan may be voted in the same
proportion as shares for which instruction cards are received.
(Continued and to be signed on other side.)
<PAGE>
[X] Please mark your | 5605
votes as in this example. ---
This proxy when properly executed will be voted in the manner directed
herein. If no direction is made, this proxy will be voted by the Trustee in
accordance with the Board's recommendations.
- --------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR Items 1, 2, 3 and 4.
- --------------------------------------------------------------------------------
FOR WITHHELD
1. Election of [_] [_]
Directors.
(see reverse)
FOR, except vote withheld from the following nominee(s):
- --------------------------------------------------------
FOR AGAINST ABSTAIN
2. Approve selection of Arthur Andersen LLP [_] [_] [_]
as Auditors.
FOR AGAINST ABSTAIN
3. Adopt the 1997 Stock Option Plan. [_] [_] [_]
4. Authorization of additional shares of [_] [_] [_]
common stock.
- --------------------------------------------------------------------------------
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
---------------------------------------
---------------------------------------
SIGNATURE(S) DATE
================================================================================
FOLD AND DETACH HERE
<PAGE>
COLGATE-PALMOLIVE PR
STOCK/SAVINGS PLAN
To: Plan Participants
As a participant in the above Plan, you may direct the manner in which
shares of Company Common Stock allocable to your interest in the Colgate-
Palmolive Stock Fund established under such Plan shall be voted by the Trustee
at the annual meeting of stockholders to be held at New York, New York on May 8,
1997 or at any adjournment thereof.
Election of Directors, Nominees:
J.K. Conway, R.E. Ferguson,
E.M. Hancock, D.W. Johnson,
J.P. Kendall, R.J. Kogan, D.E. Lewis,
R. Mark, H.B. Wentz, Jr.
You are encouraged to specify your choices by marking the appropriate boxes, SEE
REVERSE SIDE, but you need not mark any boxes if you wish to vote in accordance
with the Board of Directors' recommendations. If a signed card is not returned,
shares allocable to your interest in the Plan will be voted in the same
proportion as shares for which instruction cards are received.
(Continued and to be signed on other side.)
<PAGE>
[X] Please mark your | 5607
votes as in this example. ---
This proxy when properly executed will be voted in the manner directed
herein. If no direction is made and this proxy is executed and returned, this
proxy will be voted by the Trustee in accordance with the Board's
recommendations.
- -------------------------------------------------------------------------------
The Board of Directors recommends a vote FOR Items 1, 2, 3 and 4.
- --------------------------------------------------------------------------------
FOR WITHHELD
1. Election of [_] [_]
Directors.
(see reverse)
FOR, except vote withheld from the following nominee(s):
- --------------------------------------------------------
FOR AGAINST ABSTAIN
2. Approve selection of Arthur Andersen LLP [_] [_] [_]
as Auditors.
FOR AGAINST ABSTAIN
3. Adopt the 1997 Stock Option Plan. [_] [_] [_]
4. Authorization of additional shares of [_] [_] [_]
common stock.
- --------------------------------------------------------------------------------
If voting by proxy, the Trustee is directed to authorize the Proxy Committee to
vote, in its discretion, upon such other business as may properly come before
the meeting.
- --------------------------------------------------------------------------------
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
---------------------------------------
---------------------------------------
SIGNATURE(S) DATE
================================================================================
FOLD AND DETACH HERE
