<PAGE> 1
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:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14A-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to sec.240.14a-11(c) or sec.240.14a-12
</TABLE>
CHURCH & DWIGHT CO., iNC.
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
N/A
- --------------------------------------------------------------------------------
(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 Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
(5) Total fee paid:
------------------------------------------------------------------------
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
------------------------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
(3) Filing Party:
------------------------------------------------------------------------
(4) Date Filed:
------------------------------------------------------------------------
<PAGE> 2
[ARM & HAMMER LOGO]
CHURCH & DWIGHT CO., INC.
469 North Harrison Street, Princeton, New Jersey 08543-5297
Notice of Annual Meeting of Stockholders to be held Thursday, May 7, 1998.
The Annual Meeting of Stockholders of Church & Dwight Co., Inc. (the
"Company") will be held at THE ASIA SOCIETY, 725 Park Avenue, New York, New
York, on Thursday, May 7, 1998, at 11:00 a.m., to consider and take action on
the following:
1. Election of four persons to serve as Directors for a term of three
years.
2. Approval of the appointment of Deloitte & Touche as independent
auditors of the Company's 1998 financial statements.
3. Proposal to approve the 1998 Stock Option Plan.
4. To consider and act upon a stockholder proposal requesting that the
Board of Directors take the steps necessary to provide for cumulative
voting in the election of Directors.
5. Transaction of such other business as may properly be brought before
the meeting or any adjournments thereof.
All stockholders are cordially invited to attend, although only those
stockholders of record as of the close of business on March 9, 1998, will be
entitled to notice of, and to vote at, the meeting or any adjournments thereof.
The transfer books will not be closed.
A list of stockholders entitled to vote will be available for inspection by
interested stockholders at the offices of Proskauer Rose LLP, 1585 Broadway, New
York, New York 10036, commencing on April 24, 1998.
MARK A. BILAWSKY
Vice President, General Counsel
and Secretary
Princeton, New Jersey
April 1, 1998
YOUR VOTE IS IMPORTANT. EVEN IF IT IS YOUR DESIRE TO ABSTAIN, PLEASE SIGN AND
RETURN THE ENCLOSED PROXY IN THE ACCOMPANYING POSTAGE-PAID ENVELOPE.
<PAGE> 3
CHURCH & DWIGHT CO., INC.
469 North Harrison Street, Princeton, New Jersey 08543-5297
April 1, 1998
Proxy Statement
PROXIES AND VOTING
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors of Church & Dwight Co., Inc. (the "Company"),
for use at the Annual Meeting of Stockholders to be held on Thursday, May 7,
1998 and at any adjournment thereof.
The securities entitled to vote at the meeting consist of the Company's
Common Stock. Each stockholder of record at the close of business on March 9,
1998, is entitled to vote in accordance with the Company's Restated Certificate
of Incorporation as amended. At the Annual Meeting each share of stock
beneficially owned by the same person for a period of 48 consecutive months
preceding March 9, 1998, will be entitled to four votes per share. All other
shares will be entitled to one vote per share. The discussion on page 30 of this
Proxy Statement outlines the procedures for determining when changes in
beneficial ownership are deemed to occur. The number of shares outstanding at
the close of business on March 9, 1998, was 19,412,455.
At the Annual Meeting of Stockholders held on May 8, 1997, as reported in
the Certificate of Inspectors of Elections, the number of shares of Company
Common Stock entitled to vote at such meeting was 19,505,259 bearing 39,737,919
votes. Of such shares, 6,744,220 were entitled to four votes per share and
12,761,039 were entitled to one vote per share.
Any stockholder giving a proxy has the power to revoke that proxy at any
time before it is voted. Any proxy which is not revoked will be voted at the
meeting and all proxies will be voted, if no contrary instruction is indicated
on the proxy, FOR the election of the nominees described herein, FOR approval of
the appointment of Deloitte & Touche as independent auditors, FOR approval of
the proposed 1998 Stock Option Plan as described herein, and AGAINST the
proposed stockholder resolution relating to cumulative voting in the election of
Directors.
The presence, in person or by proxy, of the holders of such number of
shares of Company Common Stock as are entitled to cast a majority of the vote,
at the meeting, constitutes a quorum. Proxies submitted with the votes withheld
for the election of Directors or abstentions with regard to proposals 2, 3 and 4
and broker non-votes are included in determining whether or not a quorum is
present. Votes will be tabulated by the Company's transfer agent. Directors are
elected by a plurality of the votes cast at the meeting. "Plurality" means that
the nominees who receive the largest number of votes cast are elected as
Directors up to the maximum number of Directors to be chosen at the meeting.
Consequently, any shares not voted (whether by abstention, broker non-vote or
otherwise) have no impact in the election of Directors except to the extent the
failure to vote for a nominee results in another nominee receiving a
<PAGE> 4
larger number of votes. The approval of proposals 2, 3 and 4 requires the
affirmative vote of such number of shares as are entitled to cast a majority of
the votes present in person or by proxy at the meeting. Abstentions are counted
as non-affirmative votes on proposals 2, 3 and 4, whereas broker non-votes are
not counted in tabulating the votes thereon.
Solicitation of proxies is being made by management on behalf of the Board
of Directors through the mail, in person, and by telephone through its employees
who will not be additionally compensated. The cost thereof will be borne by the
Company. The Company has retained D.F. King & Co., Inc., to aid in the
solicitation of proxies for a fee estimated not to exceed $5,000 plus
out-of-pocket expenses. The Company will also reimburse brokerage houses and
others for forwarding proxy material to beneficial owners.
This Proxy Statement and enclosed form of Proxy and Stockholder
Certification Form is expected to be first mailed to Stockholders on April 1,
1998.
1. ELECTION OF DIRECTORS
The Restated Certificate of Incorporation provides for the division of the
Board of Directors into three classes, each class equal or as nearly equal as
possible, with the Directors in each class serving for a term of three years. At
the 1998 Annual Meeting of Stockholders, four Directors will be elected to serve
until the 2001 Annual Meeting. Such Directors will serve until their successors
are elected and qualified. All nominees are members of the present Board.
It is not anticipated that any of the nominees will become unavailable to
serve as Directors for any reason, but if that should occur before the Annual
Meeting, the persons named in the form of proxy reserve the right to substitute
another of their choice as nominee in his/her place or to vote for such lesser
number of Directors as may be prescribed by the Board of Directors in accordance
with the Company's Restated Certificate of Incorporation and By-Laws.
Information concerning the nominees and the continuing members of the Board
of Directors is set out below:
STANDING FOR ELECTION -- MAY 7, 1998
TERM EXPIRES IN 1998
<TABLE>
<S> <C>
ROBERT H. BEEBY
[Photo of Robert H. Mr. Beeby, 66, retired in 1991 as President and Chief
Beeby] Executive Officer of Frito-Lay, Inc., the nation's largest
manufacturer of snack food. Prior to that, he served as
President and Chief Executive Officer of Pepsi-Cola
International. He currently serves as a member of the
Board of Directors of the Columbia Gas System, Inc. and
A.C. Neilsen. He became a member of the Board in 1992.
He is a member of the Compensation & Organization
Committee of the Board.
</TABLE>
2
<PAGE> 5
<TABLE>
<S> <C>
J. RICHARD LEAMAN, JR.
[Photo of J. Mr. Leaman, 63, retired in May 1995 as President, Chief
Richard Leaman Executive Officer of S. D. Warren Company, a producer of
Jr.] coated printing and publishing papers. He retired as
Vice Chairman of Scott Paper Company on January 1, 1995,
a position he held since April 1991. Mr. Leaman is on
the Board of Directors of Pep Boys, S. D. Warren Company
and Ranpak Corp. He also serves as Vice Chairman of the
Executive Committee and on the Board of Trustees of
Widener University, and a member of the Dartmouth Alumni
Council. Mr. Leaman has been a Director of the Company
since 1985. He serves as Chairman of the Audit Committee
of the Board.
DWIGHT C. MINTON
[Photo of Dwight C. Mr. Minton, 63, is Chairman of the Board of the Company.
Minton] After serving many years as President, and as Chief
Executive Officer since 1968, he retired from the
Company in October 1995. He currently serves as Chairman
of the Greater Yellowstone Coalition, Vice Chairman of
the National Environmental Education and Training
Foundation and is a Director of Crane Co. and Medusa
Corporation. He has been a Director of the Company since
1965 and serves as Chairman of the Director's Stock
Option Plan, Executive and Loan Committees of the Board
and is a member of the Compensation & Organization
Committee of the Board.
JOHN O. WHITNEY
[Photo of John O. Mr. Whitney, 69, is a Professor and Executive Director, the
Whitney] Deming Center for Quality Management at Columbia Business
School. He currently serves as a member of the Board of
Directors of the Turner Corporation and Atchison
Castings, Inc. He also serves as Advisory Director of
Newsbank. He became a member of the Board in 1992. He is
a member of the Compensation & Organization Committee of
the Board.
</TABLE>
CONTINUING DIRECTORS
TERM EXPIRES IN 1999
<TABLE>
<S> <C>
CYRIL C. BALDWIN, JR.
[Photo of Cyril C. Mr. Baldwin, 70, is Chairman of the Board of Cambrex
Baldwin Jr.] Corporation, a specialty chemicals company. He became a
Director of the Company in 1983. He is a member of the
Executive Committee, Compensation & Organization
Committee and the Committee on Directors of the Board.
</TABLE>
3
<PAGE> 6
<TABLE>
<S> <C>
WILLIAM R. BECKLEAN
[Photo of William Mr. Becklean, 61, is Senior Vice President of Tucker
R. Becklean] Anthony, Inc. a full-service regional brokerage and
investment banking firm. He previously served as Vice
President of Kidder, Peabody & Co., Inc. He became a
Director of the Company in 1980. Mr. Becklean is a
member of the Audit Committee of the Board.
ROSINA B. DIXON, M.D.
[Photo of Rosina B. Dr. Dixon, 55, has been a consultant to the pharmaceutical
Dixon] industry since 1986. She is a Director of Cambrex
Corporation and Enzon, Inc. She became a Director of the
Company in 1979, currently serves as Chairman of the
Compensation & Organization Committee of the Board and
is a member of the Committee on Directors and Executive
Committee of the Board.
DEAN P. PHYPERS
[Photo of Dean P. Mr. Phypers, 69, retired in 1987 as Senior Vice President
Phypers] and Director, International Business Machines Corporation, a
leading manufacturer of information systems. He
currently serves as a Director of American International
Group, Bethlehem Steel Corporation and Cambrex
Corporation. He has been a Director of the Company since
1974. He serves as Chairman of the Committee on
Directors and is a member of the Executive Committee of
the Board.
</TABLE>
TERM EXPIRES IN 2000
<TABLE>
<S> <C>
ROBERT A. DAVIES, III
[Photo of Robert A. Mr. Davies, 62, is the President and Chief Executive Officer
Davies III] of the Company, positions he has held since October 1995.
From January 1995 to September 1995 he was the President
of the Arm & Hammer Division. During the period 1985 to
1990 he served as President & Chief Executive Officer
and a member of the Board of Directors of California
Home Brands, Inc. He currently serves as a member of the
Board of DSLT, Brands, Inc., previously Diamond Crystal
Salt, Inc. He is a member of the Executive Committee of
the Board.
</TABLE>
4
<PAGE> 7
<TABLE>
<S> <C>
JOHN D. LEGGETT, III, PH.D.
[Photo of John D. Mr. Leggett, 56, is President of Sensor Instruments Co.,
Leggett III] Inc., a company formed by him in 1985, which is involved in
the design, manufacture and marketing of environmental
sensing instrumentation. He has been a Director of the
Company since 1979 and currently is a member of the
Executive, Audit and Compensation & Organization
Committees of the Board.
ROBERT A. MCCABE
[Photo of Robert A. Mr. McCabe, 63, is President of Pilot Capital Corporation,
McCabe] whose business is providing equity financing for private
companies. He is a member of the Board of Directors of
Borg-Warner Security Corporation, Thermo Optek
Corporation, The Atlantic Bank, and Thermo Electron
Corporation. Mr. McCabe is a Trustee of the American
School of Classical Studies at Athens, the Thera
Foundation, Athens College, and the French Library in
Boston. Mr. McCabe has been a Director of the Company
since 1987. He is a member of the Audit Committee of the
Board.
</TABLE>
RETIRING DIRECTOR
<TABLE>
<S> <C>
JARVIS J. SLADE
[Photo of Jarvis J. Mr. Slade, 72, is a partner in Hampton Capital Company, a
Slade] merchant banking firm. Mr. Slade is Chairman of the Board of
MCRB Service Bureau Corp., and a member of the Board of
Directors of Prime Energy Corporation and Lexington
Management Group. Mr. Slade is a member of the Executive
Committee of the Board. He has been a Director of the
Company since 1970. Mr. Slade will retire from the Board
effective on May 7, 1998. With deep regret the Company
accepts his resignation.
Upon Mr. Slade's retirement the number of Board members
will be reduced to eleven until such time as a new
member(s) is identified and elected.
</TABLE>
Unless otherwise stated, each Director has served in the principal business
indicated above for the past five or more years.
THE BOARD OF DIRECTORS
During 1997 there were twelve meetings of the Board of Directors. All
Directors attended at least seventy-five percent of the total number of meetings
held by the Board of Directors and the total number of meetings held by all
Committees of Board on which such Director served.
5
<PAGE> 8
The Board has an Audit Committee and a Compensation & Organization
Committee, but does not have a Nominating Committee. The typical duties of a
Nominating Committee, the screening and selection of candidates to fill
vacancies on the Board of Directors, are part of the responsibilities of the
Committee on Directors.
AUDIT COMMITTEE. The Audit Committee, comprised of William R. Becklean; J.
Richard Leaman, Jr.; John D. Leggett, III, Ph.D.; and Robert A. McCabe, met
three times during 1997. The Committee's functions include recommending to the
Board of Directors the engagement and discharge of the independent auditors,
reviewing the independence of the auditors, considering the range of audit and
non-audit services and fees, and reviewing the adequacy of the Company's system
of internal accounting controls. All members of the Committee are outside
Directors.
COMPENSATION & ORGANIZATION COMMITTEE. The Compensation & Organization
Committee, comprised of Cyril C. Baldwin, Jr.; Robert H. Beeby; Rosina B. Dixon,
M.D.; John D. Leggett, III, Ph.D.; Dwight C. Minton; and John O. Whitney, met
five times during 1997. All of the members of the Committee are non-employee
Directors and are ineligible to participate in any plans or programs which are
administered by the Committee. The functions performed by the Committee include:
consideration, including competitiveness, and design of the Company's
compensation plans; review and approval of Executive Officer compensation; and
administration of the Company's compensation plans.
COMMITTEE ON DIRECTORS. The Committee on Directors, comprised of Cyril C.
Baldwin; Robert A. Davies, III; Rosina B. Dixon, M.D.; Dwight C. Minton; and
Dean P. Phypers, was established in November 1994. The members of the Committee
met three times during 1997. The functions of the Committee include, among other
things, the selection, evaluation and consideration of candidates for nomination
to the Board, and the monitoring and evaluation of overall Board performance.
Any Stockholder wishing to propose a nominee should submit a recommendation in
writing to the Company's Secretary, indicating the nominee's qualifications and
other relevant biographical information and providing confirmation of the
nominee's consent to serve as a Director.
6
<PAGE> 9
EXECUTIVE OFFICERS OF THE COMPANY
Listed below are the names, ages and positions held with the Company (as of
March 9, 1998) by each Executive Officer.
<TABLE>
<CAPTION>
NAME AGE POSITION
---- --- --------
<S> <C> <C>
Robert A. Davies, III................ 62(1) President and Chief Executive Officer
Raymond L. Bendure, Ph.D............. 54(1) Vice President Research and Development
Mark A. Bilawsky..................... 50(1) Vice President, General Counsel and Secretary
Mark G. Conish....................... 45(1) Vice President Manufacturing and Distribution
James P. Crilly...................... 55(1) Senior Vice President Arm & Hammer Division
Zvi Eiref............................ 59(1) Vice President Finance and Chief Financial Officer
Dennis M. Moore...................... 47(1) Vice President/General Manager International
Operations/Business Development
Eugene F. Wilcauskas................. 55(1) Vice President, President and Chief Operating Officer
Specialty Products Division
Leo T. Belill........................ 57(2) Vice President Specialty Products Division
Alfred H. Falter..................... 48(2) Vice President Corporate Purchasing
W. Patrick Fiedler................... 49(2) Vice President Sales and Marketing, Specialty Products
Division
Gary P. Halker....................... 47(2) Vice President, Controller and Chief Information
Officer
Jaap Ketting......................... 46(2) Vice President - Brazil
Henry Kornhauser..................... 65(2) Vice President - Advertising
Larry B. Koslow...................... 46(2) Vice President Marketing Personal Care, Arm & Hammer
Division
Ronald D. Munson..................... 55(2) Vice President International Operations, Specialty
Products Division
Joyce F. Srednicki................... 53(2) Vice President Marketing Household Products, Arm &
Hammer Division
</TABLE>
- ---------------
(1) Executive Officers serving for such term as the Board of Directors shall
determine.
(2) Executive Officers serving for such term as determined by and at the
discretion of the Chief Executive Officer.
Mr. Davies was elected President and Chief Executive Officer in October
1995. He served as President of the Arm & Hammer Division from January to
September 1995. From 1985 to 1990 he served as President & Chief Executive
Officer and a member of the Board of Directors of California Home Brands, Inc.
He is a member of the Board of DSLT, Inc., previously Diamond Crystal Salt, Inc.
Mr. Bendure joined the Company in November 1995 as Vice President Research
and Development. From 1988 to 1993 Mr. Bendure was employed by Colgate Palmolive
Co. as World Wide Director, Corporate Technology. From 1993 to 1995 Mr. Bendure
was Senior Vice President, Optical Research & Development for Allergan.
Mr. Bilawsky joined the Company in 1976 as Tax and Internal Audit Manager,
and in 1979 he became Associate General Counsel and Tax Counsel. He has served
as Vice President, General Counsel and Secretary of the Company since 1989.
7
<PAGE> 10
Mr. Conish was appointed Vice President Manufacturing and Engineering in
April 1993 and in November 1994 he became Vice President Manufacturing and
Distribution. For the previous nineteen years he served in various management
positions, the most recent being Senior Director, Manufacturing/Engineering.
Mr. Crilly rejoined the Company in February 1995 as Vice President Sales
Arm & Hammer Division, a position he held with the Company from 1980 to 1984. In
February 1997 Mr. Crilly became Senior Vice President Arm & Hammer Division.
From 1984 to 1990 Mr. Crilly was retained by California Home Brands as Vice
President Sales and Marketing. From 1990 to 1994 he was a partner in California
Calamari & Gold Coast Fisheries, Inc.
Mr. Eiref rejoined the Company in November 1995 as Vice President Finance
and Chief Financial Officer, a position he held with the Company from 1979 to
1988. From 1988 to 1995 Mr. Eiref was employed by Chanel, Inc. as Senior Vice
President Finance.
Mr. Moore joined the Company in 1980 and in 1984 was elected Vice President
Human Resources. In May 1989 Mr. Moore became Vice President of Administration
and in July 1996 he became Vice President Corporate Business Development. In
October 1997 Mr. Moore was appointed Vice President/General Manager
International Operations/Business Development.
Mr. Belill was appointed Vice President and General Manager Basic Products
Group in August 1989, after joining the Company in 1986. In April 1991 Mr.
Belill became Vice President Specialty Products Division. For the period June
1996 until April 1997 he was acting General Manager of the Specialty Products
Division.
Mr. Falter joined the Company in 1979 as Plant Controller and served in
various managerial positions until March 1988 when he became Director, Corporate
Purchasing. In December 1995 Mr. Falter was appointed Vice President Corporate
Purchasing.
Mr. Fiedler was appointed Vice President Marketing for the Specialty
Products Division in October 1995. In February 1997 Mr. Fiedler became Vice
President Sales and Marketing for that Division. In 1994 Mr. Fiedler was
appointed President of Armand Products Company, a partnership in which the
Company owns a fifty percent interest, after having previously served as Vice
President/General Manager. Prior to that Mr. Fiedler was employed by Occidental
Chemical Corporation in various managerial positions.
Mr. Ketting has been Vice President - Brazil since June 1997. He began with
Church & Dwight in January 1987 as Manager of Financial Analysis for the
Specialty Products Division. In June 1990 he became Director of Financial
Analysis for the Specialty Products Division. Before coming to Church & Dwight,
Mr. Ketting spent ten years with Allied Corp. and its General Chemical Company
spin-off in various financial management positions.
Mr. Halker joined the Company in 1977 and in 1984 was appointed Controller.
In March 1993 Mr. Halker became Chief Information Officer and in August 1994 he
became Vice President and Chief Information Officer. In August 1995 he became
Vice President, Controller and Chief Information Officer.
Mr. Kornhauser joined the Company in January 1997 as Vice
President - Advertising. Prior to that Mr. Kornhauser was Chairman of the Board
of Partners & Shevack, an advertising agency in which he was
8
<PAGE> 11
a principal. Prior to that he served as President of C.T. Clyne until 1980 when
he became the Chairman and Chief Executive Officer of his own advertising
agency, Kornhauser & Calene. In 1989 Kornhauser & Calene merged with Partners &
Shevack.
Mr. Koslow joined the Company in November 1995 as Vice President Marketing
Personal Care for the Arm & Hammer Division. For the previous five years, Mr.
Koslow was employed by Sterling Winthrop Inc. as Vice President
Marketing - Sterling Health Canada and Category Director, Analgesics - Sterling
Health USA.
Mr. Munson joined the Company in 1983 as Director of Marketing, Specialty
Products Division and served in various managerial positions in sales and
marketing prior to being appointed Vice President and General Manager
Performance Products Group in July 1989. In July 1991 he became Vice President
International Operations, Specialty Products Division.
Ms. Srednicki was appointed Vice President Marketing Household Products for
the Arm & Hammer Division in October 1995. Since 1975 she served in various
positions of increasing responsibilities in sales and marketing.
Mr. Wilcauskas joined the Company in April 1997 as President & Chief
Operating Officer of the Specialty Products Division. Prior to that Mr.
Wilcauskas was an advisor to Investec Strategies, Inc. Prior to that he served
as President of Akzo Nobel, Inc. Mr. Wilcauskas joined Akzo Nobel in 1986 as the
result of the acquisition of the Wilson-Fiberfil Division from Plastics
Specialties & Technologies, Inc. where he was a principal, a board member and a
corporate vice president.
SECURITY OWNERSHIP
The following persons were known to the Company to be beneficial owners as
of January 1, 1998, of more than five percent of the Company's Common Stock. The
table is based on reports filed by such persons with the Securities and Exchange
Commission and on other information available to the Company.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF
BENEFICIAL OWNERSHIP
NAME AND ADDRESS ------------------------ PERCENT
OF BENEFICIAL OWNER SHARES VOTES OF CLASS(1)
------------------- ----------- --------- -----------
<S> <C> <C> <C>
Chase Manhattan Corporation.................... 1,332,950(2) 1,332,950 6.81
270 Park Avenue
New York, New York 10017
FMR Corporation................................ 1,143,400(3) 1,143,400 5.88
82 Devonshire Street
Boston, Massachusetts 02109-3614
Gabelli Funds, Inc............................. 1,840,600(4) 1,840,600 9.48
One Corporate Center
Rye, New York 10580-1434
</TABLE>
9
<PAGE> 12
Information, as supplied to the Company by Executive Officers and
Directors, with respect to the beneficial ownership of Company Common Stock by
each Director, by each Executive Officer listed in the table on page 14, and by
all Executive Officers and Directors as a group, as of March 9, 1998, is set
forth in the table below. Unless otherwise noted in the footnotes following the
table, each individual had sole voting and investment power over the shares of
Company Common Stock shown as beneficially owned.
<TABLE>
<CAPTION>
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP
---------------------------------------------------- DEFERRED
PERCENT STOCK COMPENSATION
OF OPTION PLANS PLANS
NAME SHARES(5)(6) VOTES CLASS(1) (SHARES) ("SHARES")
---- ------------ --------- --------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Cyril C. Baldwin, Jr. .............. 8,743 27,763 -- 6,000 --
William R. Becklean................. 6,207 17,304 -- 6,000 1,410
Robert H. Beeby..................... 5,746 11,746 -- 5,000
Robert A. Davies, III............... 26,893(7) 32,725 -- 20,000 43,702
Rosina B. Dixon, M.D. .............. 23,578(8) 94,033 -- 6,000 12,792
J. Richard Leaman, Jr. ............. 3,840 15,360 -- 6,000 2,606
John D. Leggett, III, Ph.D. ........ 327,022(9) 1,300,666 1.68 6,000 --
Robert A. McCabe.................... 8,412 29,832 -- 6,000 1,338
Dwight C. Minton.................... 156,095(10) 586,148 -- 305,132 --
Dean P. Phypers..................... 7,240 28,960 -- 6,000 3,023
Jarvis J. Slade..................... 8,792 35,168 -- 6,000 11,987
John O. Whitney..................... 4,419 10,419 -- 5,000 4,753
James P. Crilly..................... 15,648(11) 17,430 -- 10,000 --
Zvi Eiref........................... 105,482(12) 421,325 -- -- 2,830
Dennis M. Moore..................... 8,998(13) 35,992 -- 65,400 21,736
Eugene F. Wilcauskas................ 128(14) 512 -- -- 127
All Executive Officers and Directors
as a group (28 persons)........... 835,639(15) 3,073,044 4.30 642,832 109,928
</TABLE>
- ---------------
(1) Based solely on the number of outstanding shares; does not take into
account disparities from pro rata voting rights which may arise due to the
fact that some shares are entitled to four votes per share and some shares
are entitled to one vote per share. Percentage is shown only if one percent
or greater of the class.
(2) Chase Manhattan Corporation reported on Form 13G, dated February 12, 1998,
sole voting power over 546,800 shares, and sole investment power over
408,000 shares, shared voting power over 126,900 shares and shared
investment power over 924,950 shares.
(3) Based on information included in Schedule 13G, dated February 14, 1998,
filed with the Securities and Exchange Commission on behalf of Mr. Edward
C. Johnson 3d and certain affiliates; FMR Corp. ("FMR"), Fidelity
Management & Research Company ("FMRC") and Fidelity Management Trust
Company ("FMTC"). In such Schedule 13G, FMRC and FMTC each reported
beneficial ownership of 1,059,400 and 84,000 shares, respectively, with no
investment or voting power over such shares. Mr. Johnson and FMR, through
its control of FMRC and FMTC, each reported sole investment power, with no
voting power, over 1,059,400 shares and sole investment and voting power
over 84,000 shares.
10
<PAGE> 13
(4) Based on information included in Schedule 13D (Amendment No. 6), dated May
5, 1997, filed with the Securities and Exchange Commission on behalf of Mr.
Gabelli and certain affiliates, Gabelli Funds, Inc. and GAMCO Investors,
Inc. In such Schedule 13D, Mr. Gabelli reported no investment or voting
power over such shares; Gabelli Funds, Inc. reported sole investment and
voting power over 370,000 shares, GAMCO Investors, Inc. reported sole
investment power over 1,406,600 shares and sole voting power over 1,467,600
shares and Gabelli Asset Management Company International Advisory Services
Ltd. reported sole investment and voting power over 3,000 shares.
(5) Does not include shares of Company Common Stock which each Director and
each Executive Officer respectively, has rights to purchase, or will have
such rights within sixty (60) days from March 9, 1998, under the Stock
Option Plan for Directors (see discussion on page 13) and the 1983 Stock
Option Plan (see discussion on page 20) respectively. These shares are
reflected in the table in the column labeled Stock Option Plans (Shares).
Such shares are not entitled to vote at the 1998 Annual Meeting of
Stockholders.
(6) Does not include "shares" of Company Common Stock credited to the account
of each Director in the Deferred Compensation Plan for Directors (see
discussion on page 12) and credited to the account of each Executive
Officer in the Deferred Compensation Plan for Officers (see discussion on
page 22). These "shares" are reflected in the table in the column labeled
Deferred Compensation Plans ("Shares"). Such shares are not entitled to
vote at the 1998 Annual Meeting of Stockholders.
(7) Includes Mr. Davies' interest in 2,748 shares under the Company's Employee
Stock Purchase Plan and 1,944 shares under the Company's Investment Savings
and Profit Sharing Plans.
(8) Includes 4,500 shares held by a trust for which Dr. Dixon, a Director,
serves as co-trustee. Dr. Dixon holds shared voting power over such shares.
Includes 1,088 shares owned by a child of Dr. Dixon, as to which shares she
disclaims any beneficial interest.
(9) Includes 212,505 shares held by two trusts of which Mr. Leggett serves as
co-trustee.
(10) Includes 38,570 shares beneficially owned by Mr. Minton as trustee or
custodian. Includes 50,000 shares owned by Mr. Minton's wife. Includes Mr.
Minton's interest in 10,450 shares under the Company's Employee Stock
Purchase Plan. Includes Mr. Minton's interest in 22,613 shares under the
Company's Investment Savings and Profit Sharing Plans.
(11) Includes Mr. Crilly's interest in 594 shares under the Company's Investment
Savings and Profit Sharing Plans.
(12) Includes Mr. Eiref's interest in 4,571 shares under the Company's
Investment Savings and Profit Sharing Plans and Mr. Eiref's interest in 201
shares under the Company's Employee Stock Purchase Plan.
(13) Includes Mr. Moore's interest in 7,998 shares under the Company's
Investment Savings and Profit Sharing Plans.
(14) Includes Mr. Wilcauskas' interest in 128 shares under the Company's
Investment Savings and Profit Sharing Plans.
(15) Includes interest of Executive Officers in 75,505 shares under the
Company's Investment Savings and Profit Sharing Plans. Includes interest of
Executive Officers in 25,941 shares under the Company's Employee Stock
Purchase Plan.
11
<PAGE> 14
COMPENSATION OF DIRECTORS
Directors, who are not employees of the Company, were paid an annual
retainer of $16,000 in 1997. In addition, non-employee Directors were paid
$1,000 for each Board meeting attended. Each non-employee Director who was
Chairman of either the Audit, Compensation & Organization, or the Committee on
Directors, was paid $1,600 for each committee meeting attended and all other
non-employee Directors were paid $800 for each committee meeting attended.
Non-employee Directors do not participate in any of the Company's compensation
plans. Directors' compensation programs are described below. The compensation of
each non-employee Director for 1997 did not exceed $40,600 with the exception of
Mr. Minton.
Mr. Dwight C. Minton, Chairman of the Board, retired as Chief Executive
Officer and President of the Company on October 1, 1995. Effective on such date,
the Company retained the services of Mr. Minton as a consultant. The term of
such consulting arrangement shall continue for the life of Mr. Minton. Pursuant
to this consulting arrangement, Mr. Minton's compensation for 1997 was $250,000.
For subsequent years, his compensation shall be at the annual rate of $100,000
subject to review and adjustment by the Board. For 1998, the Board determined
that Mr. Minton's compensation shall be $250,000. In addition, the Company has
agreed to continue Mr. Minton's medical benefits and provide office space and
administrative support during the term of the consulting agreement. The Company
has further agreed that outstanding stock options granted to Mr. Minton pursuant
to the Company's Stock Option Plans shall not expire upon his termination of
employment with the Company. Mr. Minton's right to exercise such stock options
shall continue for the ten-year period commencing on the grant dates of the
respective options. Mr. Minton shall receive no other fees relating to his
service as Chairman and shall not be eligible to participate in the Compensation
Plan for Directors.
In 1997 the Company engaged the services of Dr. Dixon as a consultant and
paid fees to her in connection with such services of approximately $39,000. The
consulting services provided were unrelated to her services as a Director.
Compensation earned by each Director may be deferred, at the discretion of
such Director, pursuant to the Deferred Compensation Plan for Directors until
such time as the Director ceases to be a Director for any reason. Compensation
deferred in this manner is recorded in a ledger account and is deemed to be
invested in Company Common Stock for purposes of determining earnings and losses
in such ledger account. Actual shares of Company Common Stock are not held in
such account and as such, each participating Director has no voting or
investment rights for such "shares". Certain Directors have elected to defer
compensation as described herein and as of December 31, 1997, the number of
"shares" represented by amounts held in their ledger accounts are as set forth
in the Security Ownership table on page 10.
COMPENSATION PLAN FOR DIRECTORS
The Board of Directors of the Company adopted, on December 13, 1995, the
Compensation Plan for Directors (the "Plan") which was approved by the
stockholders at the May 9, 1996 Annual Meeting and became effective January 1,
1996.
12
<PAGE> 15
The Plan provides for the payment of Director's compensation, in the form
of Company Common Stock, at the end of the calendar year for which such
compensation was earned. The number of shares paid is determined as follows: (i)
on the first stock trading day in January the retainer and meeting fees to be
paid to each Director for that calendar year (see Compensation of Directors
discussion on page 12), are converted into shares of Company Common Stock,
rounded up to the nearest whole share. For example, if a Director is to receive
$16,000 for the annual retainer and $1,000 for each Board Meeting attended and
the closing price of Company Common Stock on the first trading day in January is
$28.00 per share, then the compensation, calculated in terms of shares of
Company Common Stock, would be 571.4 shares, rounded to 572 shares, for the
annual retainer, and 35.7 shares, rounded to 36 shares, for each meeting
attended; (ii) on the first stock trading day following the Company's regularly
scheduled Board Meeting in December the compensation earned by each Director, in
shares of Company Common Stock, is converted into dollars using the closing
price of Company Common Stock on such day. Each Participant may elect to receive
up to fifty percent of such determined compensation in cash, the remainder to be
paid in the form of Company Common Stock. The Company Common Stock to be issued
and cash compensation to be paid are distributed by December 31 of such year.
STOCK OPTION PLAN FOR DIRECTORS. The Board of Directors of the Company
adopted, on February 27, 1991, the Stock Option Plan for Directors (the "Plan"),
which was approved by the stockholders at the May 9, 1991 Annual Meeting and
became effective January 1, 1991. Stock Options are granted to all non-employee
Directors of the Company (the "Participant").
The Plan authorizes the granting of options to purchase shares of Company
Common Stock (the "Stock") at the fair market value on the date of grant. The
maximum term during which these options may be exercised is ten years, subject
to a three-year vesting period. The options may be exercised only by the
Participant during his/her lifetime and only transferred by will or the laws of
descent and distribution.
Except for the options granted in 1997 in the amount of 2,000 shares,
participants are granted an option to purchase 1,000 shares of Stock each year
on the date on which the Company holds its Annual Meeting during the term of the
Plan, with the further exception that a Participant's initial option grant shall
be 3,000 shares of Stock.
The total number of shares that may be issued pursuant to options under the
Plan cannot exceed 500,000 shares of Stock (adjusted for stock splits, stock
dividends and the like).
13
<PAGE> 16
COMPENSATION OF EXECUTIVE OFFICERS
The following table sets forth information concerning annual compensation
paid or accrued by the Company during the fiscal years ended December 31, 1997,
1996 and 1995 to, or for, the Chief Executive Officer, and each of the next four
highest paid Executive Officers of the Company, whose total annual salary and
bonus exceeded $100,000.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
---------------------------------- -------------------
AWARDS LTIP
OTHER ANNUAL -------- -------- ALL OTHER
COMPENSATION OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY BONUS(1) (2) (SHARES) PAY-OUTS (3)(4)(5)
- --------------------------- ---- -------- -------- ------------ -------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
ROBERT A. DAVIES, III 1997 $350,583 $300,000 $ 260 -- -- $70,450
President and 1996 350,000 192,500 22,052 86,500 -- 55,670
Chief Executive Officer 1995 292,426 182,900 27,815 40,000 -- 20,471
JAMES P. CRILLY 1997 181,458 100,000 260 -- 31,741
Senior Vice President 1996 165,000 74,500 3,145 20,300 -- 20,810
Arm & Hammer Division 1995 156,118 59,600 3,025 10,000 -- 5,778
ZVI EIREF 1997 210,333 126,000 260 -- 39,036
Vice President and 1996 210,000 94,500 7,654 33,800 -- 27,239
Chief Financial Officer 1995 43,750 -- 87 10,000 -- 1,050
DENNIS M. MOORE 1997 189,333 102,050 10,948(6) -- 32,822
Vice President/General 1996 189,000 85,000 20,609(6) 28,700 -- 28,923
Manager International 1995 187,688 95,300 236,759(6)(7)(8) -- -- 22,711
Operations/Business
Development
EUGENE F. WILCAUSKAS 1997 178,417 135,000 -- -- -- 27,895
President and Chief 1996 -- -- -- -- -- --
Operating Officer 1995 -- -- -- -- -- --
Specialty Products Division
</TABLE>
- ---------------
(1) Represents incentive compensation payments under the Company's Annual
Incentive Compensation Plan as discussed on page 19.
(2) Includes premiums paid for long-term disability insurance, liability
insurance and medical reimbursement plans. Total premiums paid on behalf of
named individuals were as follows for 1997, 1996, and 1995, respectively:
R.A. Davies, III $260, $22,052, $27,815; J.P. Crilly $260, $3,145, $3,025;
Z. Eiref $260, $7,654, $87; D.M. Moore $260, $8,921, $14,684; E.F.
Wilcauskas $0, (none for 1996 and 1995).
(3) Includes Company contributions, vested and unvested, under the Company's
Investment Savings Plan and Profit Sharing Plan. Total contributions on
behalf of named individuals were as follows for 1997, 1996 and 1995,
respectively: R.A. Davies, III $53,625, $18,000, $4,500; J.P. Crilly
$27,705, $18,000, $3,906; Z. Eiref $32,205, $18,000, $750; D.M. Moore
$30,315, $17,969, $13,456; E.F. Wilcauskas $23,850, (none for 1996 and
1995).
14
<PAGE> 17
(4) Includes compensation deferred pursuant to a deferred compensation
agreement with the Company, providing certain plan contributions above
Internal Revenue Code limits. Such amounts are not deferred at the request
of the individual or the Company. Total compensation deferred on behalf of
named individuals was as follows for 1997, 1996 and 1995, respectively:
R.A. Davies, III $5,718, $22,301, $4,200; J.P. Crilly $1,209, $1,197, $394;
Z. Eiref $1,510, $1,800, $300; D.M. Moore $880, $5,003, $3,846; E.F.
Wilcauskas $1,309, (none for 1996 and 1995).
(5) Includes premiums paid for life insurance plans. Total premiums paid on
behalf of named individuals were as follows for 1997, 1996 and 1995,
respectively: R. A. Davies, III $11,107, $15,369, $11,771; J. P. Crilly
$2,827, $1,613, $1,478; Z. Eiref $5,321, $7,439, (none for 1995); D.M.
Moore $1,627, $5,951, $5,409; E.F. Wilcauskas $2,736, (none for 1996 and
1995).
(6) Includes $10,000 of loan forgiveness in each of 1997, 1996 and 1995 in
connection with a program to encourage employees to relocate to Princeton,
New Jersey. Such program was generally available to all employees.
(7) Includes debt forgiveness and income tax indemnity in connection with the
termination of the Executive Stock Purchase Plan as discussed on page 21.
Total amount paid on behalf of named individuals in 1995 was: D.M. Moore
$165,409.
(8) Includes interest paid by the Company in accordance with the Executive
Stock Purchase Plan as discussed on page 21. Total interest paid on behalf
of named individuals in 1995 was: D.M. Moore $44,978.
The following table sets forth information with respect to grants of stock
options for the Executive Officers named in the Summary Compensation Table
during 1997 pursuant to the 1983 Stock Option Plan(1). Also shown are
hypothetical gains for each option based on assumed rates of annual compound
stock price appreciation of five percent and ten percent from the date the
options were granted over the full option term.
OPTION GRANTS FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE VALUE
----------------------------------------------- AT ASSUMED ANNUAL RATES
% OF TOTAL OF STOCK PRICE
OPTIONS APPRECIATION FOR OPTION
GRANTED TO EXERCISE TERM (10 YEARS)(2)
OPTIONS EMPLOYEES IN PRICE EXPIRATION ---------------------------
NAME GRANTED FISCAL YEAR ($/SHARE) DATE 5% ANNUAL 10% ANNUAL
---- ------- ------------ --------- ---------- ----------- ------------
<S> <C> <C> <C> <C> <C> <C>
Robert A. Davies, III.... -- -- -- -- $ -- $ --
James P. Crilly.......... -- -- -- -- -- --
Zvi Eiref................ -- -- -- -- -- --
Dennis M. Moore.......... -- -- -- -- -- --
Eugene F. Wilcauskas..... 20,000 52.00 28.000 4/01/07 912,800 1,450,400
</TABLE>
- ---------------
(1) Stock options, under the 1983 Stock Option Plan, are granted to management
employees, including Executive Officers, giving optionees the right to
purchase shares of Company Common Stock over a ten-year period, subject to a
three-year vesting period, at the fair market value per share on the date of
grant.
15
<PAGE> 18
(2) These amounts represent assumed rates of appreciation only. Actual gains, if
any, on stock option exercises are dependent on the future performance of
the Company Common Stock and overall market conditions. These amounts are
not intended to forecast possible future increases, if any, in the market
price of the Company's Common Stock.
The following table sets forth information for the Company's option plans
with respect to stock option exercises by the Executive Officers named in the
Summary Compensation Table on Page 14, during 1997, including the aggregate
value of gains on the date of exercise. Also shown are the (i) number of shares
covered by both exercisable and unexercisable stock options as of December 31,
1997, and (ii) values for in-the-money options which represent the difference
between the exercise price of such stock options and the price of Company Common
Stock as of December 31, 1997.
AGGREGATED OPTION EXERCISES FOR THE FISCAL YEAR
ENDED DECEMBER 31, 1997 AND OPTION VALUE
AT DECEMBER 31, 1997
<TABLE>
<CAPTION>
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SHARES OPTIONS IN-THE-MONEY OPTIONS
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Robert A. Davies, III... -- -- -- 126,200 $ -- $827,915
James P. Crilly......... -- -- -- 30,300 -- 239,221
Zvi Eiref............... -- -- -- 43,800 -- 311,784
Dennis M. Moore......... -- -- 65,400 28,700 319,290 199,471
Eugene F. Wilcauskas.... -- -- -- 20,000 -- 1,260
</TABLE>
16
<PAGE> 19
COMPARISON OF TEN-YEAR CUMULATIVE TOTAL RETURN
AMONG COMPANY, S&P 500 INDEX AND THE HOUSEHOLD PRODUCTS INDEX(1)
FIVE-YEAR TEN-YEAR
AVERAGE ANNUAL AVERAGE ANNUAL
RETURN RETURN
-------------- --------------
COMPANY (0.3) 9.4
S&P 500 20.3 18.0
HOUSEHOLD PRODUCTS 23.1 25.1
<TABLE>
<CAPTION>
Measurement Period Household
(Fiscal Year Covered) Company S&P 500 Products Index
<S> <C> <C> <C>
1987 40.21 47.87 38.24
1988 35.32 55.82 41.18
1989 57.48 73.50 64.48
1990 54.98 71.22 76.62
1991 94.37 92.92 89.27
1992 100.00 100.00 100.00
1993 91.79 110.08 111.30
1994 59.63 111.53 120.80
1995 62.66 153.45 169.08
1996 79.12 188.68 218.05
1997 98.68 251.63 306.66
</TABLE>
(1)The Household Products Index consists of Clorox Company, Colgate Palmolive
Co., Fort James Corp., Procter & Gamble and Kimberly Clark.
17
<PAGE> 20
COMPENSATION & ORGANIZATION COMMITTEE REPORT
The Company's executive compensation program is determined and administered
by the Compensation & Organization Committee of the Board of Directors (the
"Compensation Committee"), which is composed of Dr. Dixon (Chairman) and Messrs.
Baldwin, Beeby, Leggett, Minton and Whitney, all of whom are non-employee
Directors. The Compensation Committee is responsible for all compensation
decisions regarding the Company's Executive Officers, subject to the approval of
the Board of Directors. Decisions relating to the Chief Executive Officer's
compensation are subject to the approval of all the non-employee Directors.
COMPENSATION PHILOSOPHY
In order to achieve its performance objectives, the Company believes that
it must be able to attract, motivate and retain qualified people with
appropriate talents, skills and abilities. Accordingly, the Compensation
Committee has established a compensation program that is competitive in the
markets in which the Company competes for management talent.
The executive compensation program is comprised of base salary, annual
incentive compensation and long-term incentive compensation components. Using
external surveys as a guide, the level of total compensation for Executive
Officers (including the Executive Officers named in the foregoing tables) is
intended to be comparable to the level of total compensation paid to executives
with comparable responsibilities in a peer group of companies identified by the
Committee. Based on such surveys, compensation paid to executives may be
adjusted by the Committee to reflect the relative size differences of the
companies contained in the group. The peer group is intended to represent a
sufficient sample size to enable the Company to get a true reading on executive
compensation although it is not necessarily the same companies with which the
Company would meaningfully compare its performance in the marketplace. The
Compensation Committee generally seeks to maintain annual compensation (base
salary and annual incentive compensation in the aggregate) and welfare benefits
at an average level, perquisites at a lower than average level, and long-term
incentive compensation at an average level, as compared with similar types of
compensation paid to executives in the peer group. It should be noted that the
incentive compensation component of executive compensation tends to be more
performance sensitive, both individual and Company performance, than the other
compensation components. The Compensation Committee gives emphasis to long-term
incentive compensation in the form of stock options, because such compensation
places the Executive Officers of the Company in the same position as long-term
stockholders. As a result, business decisions are improved and Executive
Officers receive gains that are consistent with those realized by stockholders
of the Company. While still within the guidelines discussed above, the
Compensation Committee has, within the last few years, sought to adjust the mix
of compensation by placing increased emphasis on the more variable, performance
based portion, such as incentive compensation and stock option grants, and less
emphasis on the fixed portion, base salaries. Toward that end, the Compensation
Committee had frozen base salaries for Executive Officers at the April 1, 1995
levels, during the period 1995 through 1997, and increased the target level for
incentive compensation.
18
<PAGE> 21
The following is a discussion of each of the elements of the Company's
executive compensation program, along with a discussion of actions taken by the
Compensation Committee with respect to the Chief Executive Officer's
compensation.
BASE SALARY
Base salary for each Executive Officer is determined by comparing such
Executive Officer's base salary to that of his/her counterparts in the Company's
peer group as shown in the periodic external salary surveys described above. In
addition, the Compensation Committee may adjust the base salary of an Executive
Officer in the event the Compensation Committee determines that such base salary
(i) does not adequately reflect the performance and accomplishments of such
Executive Officer, (ii) is out of line in comparison with the base salary of
other Executive Officers or (iii) is not consistent with the Compensation
Committee's policy to attract, motivate and retain qualified Executive Officers.
The factors used in the evaluation of the Executive Officer's performance,
include such Executive Officer's level of responsibility and his/her
contribution to the achievement of the Company's strategic operating objectives,
which will include objectives specific to such individual Executive Officer.
The base salaries paid to Executive Officers were frozen during the period
April 1, 1995 through December 31, 1997, reflecting the Compensation Committee's
desire to place more emphasis on the variable components of compensation (see
the discussion on Annual Incentive Compensation and Long-Term and Other
Compensation).
In comparison with the Company's peer group, base salaries paid to
Executive Officers in 1997 were at the lower end of the median range of base
salaries of such peer group.
ANNUAL INCENTIVE COMPENSATION
Annual incentive compensation for Executive Officers is awarded under the
Company's Incentive Compensation Plan and is based on both corporate and
individual performance. The size of the aggregate incentive compensation pool,
if any, from which individual annual bonuses are paid, is based on an amount of
the Company's after-tax profits that may be payable as incentive compensation to
participants assuming achievement of the Company's performance targets and
target performance by individual participants. The aggregate incentive
compensation award pool is either increased or decreased, depending on the
percentage by which actual operating earnings per share exceeds or falls short
of the target operating earnings per share approved by the Board of Directors
for the relevant fiscal year. For each one percent that actual operating
earnings per share exceeds the target operating earnings per share, the
aggregate award pool is increased by two percent. Conversely, for each one
percent that actual operating earnings per share is less than the target
operating earnings per share, the aggregate award pool is decreased by four
percent.
After the amount of the aggregate award pool is determined using the
foregoing method, each individual Executive Officer's annual incentive
compensation is determined by the Compensation Committee using the applicable
percentage of base salary for each such Executive Officer. The applicable
percentage of base salary is determined in accordance with the Company's
Incentive Compensation Plan and ranges from thirty-three to fifty-five percent
depending on the position and level
19
<PAGE> 22
of the Executive Officer with the Company. This is consistent with the
Compensation Committee's desire to place more weight on performance based
compensation such as incentive compensation and stock options. The individual
bonuses can be higher or lower based on criteria evaluated by the Compensation
Committee, including: (i) such Executive Officer's achievement (or contribution
to the achievement by such Executive Officer's department or area of
responsibility) of personal targets and objectives and (ii) the evaluations and
recommendations of the Chief Executive Officer and Human Resources Department as
to such Executive Officer's annual incentive compensation. The personal targets
and objectives are the same as those described above used by the Compensation
Committee in determining such Executive Officer's base salary.
Additionally, the Compensation Committee may adjust the amount of the
incentive compensation award pool and individual incentive compensation awards
if, in any given year, unusual or nonrecurring factors affect the operations or
operating earnings of the Company in a manner which is not reflected in the
actual performance of the Company or Executive Officers for such year. For 1997,
as an added incentive to continue the turnaround in the Company's profitability
that was begun in 1995, the Compensation Committee increased the incentive
compensation opportunity, for 1997 only, by an amount equal to 15% of the base
salaries of the Executive Officers and a select group of managers below the
Executive Officer level whose retention and motivation were seen by management
as vital to the achievement of the Company's business plan for 1997.
The Compensation Committee intends for the incentive compensation awards
paid to Executive Officers to be competitive with those paid to comparable
executive officers in the Company's peer group. In any particular year the
incentive compensation level of each Executive Officer may be higher or lower
than that of the peer group executives as a result of such Executive Officer's
level of achievement of the specific performance-related goals.
The incentive compensation awarded to each Executive Officer named in the
foregoing tables includes the 15% additional award for 1997 described above, and
is reflected in the Summary Compensation Table on page 14. In comparison with
the Company's peer group, the incentive compensation awards paid to Executive
Officers for 1997 were within the median range of incentive compensation of such
peer group. Base salaries and incentive compensation, in the aggregate, paid to
Executive Officers in 1997 were at the median level in comparison with the
Company's peer group.
LONG-TERM AND OTHER COMPENSATION
In addition to the base salary and annual incentive compensation components
of Executive Officers' compensation, the total compensation for Executive
Officers includes a long-term incentive component in the form of stock options
granted under the Company's 1983 Stock Option Plan. The Compensation Committee
believes that stock ownership encourages management to enhance shareholder
value. Stock option grants are intended to motivate and reward Executive
Officers and other key management employees for improving the overall financial
condition of the Company over a period of time. The 1983 Stock Option Plan is
also intended to induce continued employment of key management employees with
the Company and, by offering incentives comparable to those offered by the
Company's peer group, to enable the Company to compete for, attract and retain
skilled management personnel. The Company encourages participants in the Plan to
hold the shares of Company Common Stock received through the
20
<PAGE> 23
exercise of stock options so that the participants' interest will continue to be
aligned with the long-term interests of the stockholders of the Company. The
amount of options currently held by Executive Officers is not a factor in
determining the amount of stock options to be granted under the Plan.
Stock options granted to management employees, including Executive
Officers, give optionees the right to purchase shares of Company Common Stock
over a ten-year period, subject to a three-year vesting period, at the fair
market value per share on the date of grant. Generally, the number of options
granted to an Executive Officer is based on a percentage of the Executive
Officer's base salary, determined by the Compensation Committee considering the
recommendations of the Human Resources Department, and the market price per
share on the date of grant. The determination of such percentage of base salary
takes into account the Executive Officer's responsibilities with the Company
(i.e., more options are given to employees and executives in higher levels and
positions). Options are generally granted on an annual basis to each Executive
Officer, and the number of options granted is periodically evaluated to ensure
that the Company maintains a compensation program for each Executive Officer in
accordance with the Compensation Philosophy discussed on page 18. As described
in the prior year's Proxy Statement, a special award of stock options was
granted on November 1, 1996. As a result, no additional options were granted in
1997.
Effective May 26, 1993, the Company adopted, and the Board of Directors
approved, the Executive Stock Purchase Plan pursuant to which certain Executive
Officers purchased shares of restricted Company Common Stock at the market price
on the date of purchase. The objective of the Executive Stock Purchase Plan was,
in part, to further align the interests of the Plan Participants with the
long-term interests of stockholders. The Company had the right to repurchase
such shares, at fair market value, in the event of such Participant's
retirement, death, or termination of employment. The transactions were financed
by loans to each Participant by a financial institution, which were guaranteed
by the Company. In addition, the interest accruing on such loans was paid by the
Company on behalf of each Participant. Participants in the plan purchased 10,000
shares of restricted Company Common Stock at a price of $32.25 per share on May
26, 1993 and on May 25, 1994 an additional purchase of 10,000 shares of
restricted Company Common Stock was made at a price of $22.625 per share. Each
Participant in the Plan, with the exception of Mr. Moore, is either no longer
employed by the Company or is no longer an Executive Officer named in the
foregoing tables.
On September 27, 1995 the Company acquired the loans entered into pursuant
to the Executive Stock Purchase Plan, at face value, from the financial
institution from which the original loans were obtained. Mr. Davies, upon his
election as Chief Executive Officer and President, determined that given the
financial circumstances presently facing the Company and each Plan Participant
that the objective of the Plan was no longer being met. Accordingly, effective
on October 2, 1995 participants in the Plan transferred 15,000 shares of Company
Common Stock, acquired pursuant to the Plan, to the Company at a price equal to
the fair market value on the date of such transfer. The proceeds of such
transaction were used to reduce the respective outstanding loan balance of each
such participant. In addition, a portion of each loan balance was forgiven by
the Company in an amount equal to the excess of the original purchase price over
the fair market value of the stock on the date of such transfer. The Company
further agreed to indemnify each Participant, on an after-tax basis, for the
income tax impact of the loan forgiveness. The remaining loan balances were
satisfied by each Participant through personal funds or
21
<PAGE> 24
loans obtained by each Participant from a financial institution. Such loans are
guaranteed by the Company. Effective December 31, 1995 the Executive Stock
Purchase Plan was terminated.
The Compensation Committee had not adopted a policy regarding Section
162(m) of the Internal Revenue Code as amended by the Omnibus Budget
Reconciliation Act, which provides in part for a $1 million annual limitation on
the deduction by the Company of compensation paid to any Executive Officer for
federal income tax purposes. However, see Stock Option Plan proposal on page 23.
The Internal Revenue Code of 1986, as amended, places maximum limitations
on the amount of annual contributions which may be made to tax-qualified
retirement plans. Accordingly, the Company adopted a Deferred Compensation Plan
for Officers under which contributions are made for the benefit of certain
Executive Officers, in such amounts which are determined in accordance with such
retirement plans but exceed these limitations. Effective December 1, 1995 the
Company amended the Deferred Compensation Plan to allow for the deferral of
compensation, in whole or in part, at the discretion of each Executive Officer.
CHIEF EXECUTIVE OFFICER COMPENSATION
The Compensation Committee evaluates the performance of Mr. Davies, the
Company's Chief Executive Officer, and determines the amount of total
compensation to be paid to Mr. Davies, which is subject to approval of the
non-employee members of the Company's Board of Directors.
The Compensation Committee's bases for determining the total compensation
for the Chief Executive Officer are substantially the same as discussed above
with respect to the Company's Executive Officers. Generally, as with the other
Executive Officers, the Compensation Committee seeks to maintain the Chief
Executive Officer's base salary at a level competitive with chief executive
officers of other companies in the Company's peer group, although the Chief
Executive Officer's base salary and incentive compensation are more
significantly affected by the Company's performance and individual performance
in each year.
Mr. Davies' compensation for 1997 was determined, in part, upon the success
of the Company in achieving its 1997 profit plan objective. The Compensation
Committee also made a judgment as to the quality of the Company's earnings, as
well as the overall health of the Company's businesses and the financial
condition of the Company. Additionally, the Compensation Committee recognized
the positive contribution that Mr. Davies has made as the Company has reversed
the negative financial trend over the last few years.
Mr. Davies' base salary for 1997 was below the median level with respect to
the Company's peer group, reflecting the Compensation Committee's desire to
place more emphasis on his performance based compensation such as incentive
compensation and stock options.
In January 1998, the Compensation Committee reviewed the performance of Mr.
Davies and determined that Mr. Davies had excelled in his performance for 1997
in that the Company met its target operating earnings and improved its
individual businesses in a significant manner. As a result, the Committee
awarded Mr. Davies an incentive compensation award of 85% of base salary,
including the additional 15% bonus awarded to all Executive Officers as
described above. Mr. Davies' incentive
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compensation award for 1997 approximated the median level in comparison with the
Company's peer group.
SUBMITTED BY THE COMPENSATION & ORGANIZATION COMMITTEE OF THE COMPANY'S BOARD OF
DIRECTORS:
<TABLE>
<S> <C>
Rosina B. Dixon, M.D., Chairman John D. Leggett, III, Ph.D.
Cyril C. Baldwin, Jr. Dwight C. Minton
Robert H. Beeby John O. Whitney
</TABLE>
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Under Section 16(a) of the Securities Exchange Act of 1934 (the "Exchange
Act"), the Company's Directors, its Executive Officers, and persons holding more
than ten percent of the Company Common Stock are required to report their
initial ownership of the Company's Common Stock and any changes in such
ownership to the Securities and Exchange Commission and the New York Stock
Exchange.
Specific due dates for reports required under Section 16(a) have been
established, and the Company is required to report in this Proxy Statement any
failure to file by these dates during 1997. To the Company's knowledge, based on
information furnished to the Company, all of these filing requirements were
satisfied for 1997, except that (i) Mr. W. Patrick Fiedler, Vice President Sales
& Marketing, inadvertently filed one late report relating to five transactions
in Company Common Stock, and (ii) Mr. Jaap Ketting, Vice President - Brazil,
inadvertently filed one late report relating to one transaction in Company
Common Stock, and (iii) Mr. Dwight Minton, Chairman of the Board, inadvertently
filed one late report relating to one transaction in Company Common Stock. All
other reports for Messrs. Fiedler, Ketting and Minton were filed timely.
2. APPOINTMENT OF AUDITORS
Upon the recommendation of the Audit Committee of the Board of Directors,
the Board appointed Deloitte & Touche as independent auditors for the Company to
examine its consolidated financial statements for 1998, and requests that the
stockholders approve such appointment. The Board of Directors may review its
selection if the appointment is not approved by the stockholders. Deloitte &
Touche has served as auditors of the Company since 1969.
The Company has been informed that neither Deloitte & Touche, nor any
member of the firm, has any relationship with the Company or its subsidiaries,
other than that arising from such firm's employment as described above. A
representative of Deloitte & Touche will be in attendance at the Annual Meeting
to respond to appropriate questions and will be afforded the opportunity to make
a statement at the meeting, if he desires to do so.
3. PROPOSAL TO APPROVE THE 1998 STOCK OPTION PLAN
The Board of Directors is submitting to the Stockholders for their approval
the 1998 Stock Option Plan (the "Plan"). The proposed Plan would replace the
Company's 1983 Stock Option Plan (the "1983
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<PAGE> 26
Plan"). The Plan is intended to qualify under Section 162(m) of the Internal
Revenue Code of 1986, as amended (the "Code"), as "performance based
compensation", and under Rule 16b-3 of the Securities Exchange Act of 1934 (the
"Exchange Act"). The 1983 Plan does not qualify under Section 162(m) of the
Code. See "Federal Income Tax Consequences" below. As of the date hereof,
options to purchase 1,920,000 shares of Common Stock are available for grant
under the 1983 Plan. No further grants under the Company's 1983 Plan will be
made if the proposed Plan is approved, but all outstanding options previously
granted under the 1983 Plan will remain in effect in accordance with their
terms. The Board of Directors has approved the Plan in concept, and will
consider the formal Plan document being submitted to Stockholders at the Board's
next regularly scheduled meeting on April 22, 1998. Formal approval of the Plan
by the Board is anticipated. Assuming approval of the Plan by the Board of
Directors at the April 22, 1998 meeting and by Stockholders at the Annual
Meeting, the effective date of the Plan will be April 22, 1998.
The Plan authorizes incentives for key management employees of the Company
in the form of stock options to further align their interests with the interests
of the Stockholders and to increase their stake in the future growth and
prosperity of the Company. The Plan is also intended to induce continued
employment of key management employees and, by offering comparable incentives,
to enable the Company to compete for, attract and retain competent management
people. Stock options may be granted under the Plan only to those employees of
the Company and its subsidiaries who are determined to be key management
employees by the Board of Directors or the committee of the Board administering
the Plan. The Plan permits the granting of stock options which are "incentive
stock options" ("ISO Options") subject to the provisions of Section 422 of the
Code and/or non-qualified options ("Non-Qualified Options"), to acquire Common
Stock, (Collectively, the "Options") at the discretion of the Board.
A copy of the Plan is attached to this Proxy Statement as Exhibit A. The
principal features of the Plan are summarized below. The summary is qualified in
its entirety to the full text of the Plan.
An aggregate of 3,000,000 shares of Common Stock (subject to increase or
decrease upon any change in the capital structure of the Company as provided for
in the Plan) will be reserved for issuance upon exercise of Options, subject to
Stockholder and Board of Directors' approval of the Plan. In the event that any
outstanding Options expire or are terminated, the shares allocable to such
expired or terminated Options shall again become available for the granting of
Options.
The terms and conditions of individual option grants may vary, subject to
the following guidelines; (i) the option price per share of Common Stock subject
to ISO Options shall not be less than the fair market value of a share of Common
Stock on the date of grant and not less than 110% of the fair market value of a
share of Common Stock in the case of Options granted to a holder of ten percent
or more of the combined voting power of all classes of stock of the Company or
its subsidiaries (a "Ten Percent Holder"); (ii) the term of all Options shall
not exceed ten years from the date of grant and shall not exceed five years in
the case of an Option granted to a Ten Percent Holder; and (iii) no options may
be granted on or after the tenth anniversary of the effective date of the Plan.
The Plan will be administered by the Compensation & Organization Committee
of the Board of Directors or such other committee or subcommittee of the Board
appointed from time to time by the
24
<PAGE> 27
Board (the "Committee"). Under the Plan, the Committee must consist of two or
more persons, each of whom shall be "Non-Employee Directors" within the meaning
of Rule 16b-3 ("Rule 16b-3") under the Exchange Act and "Outside Directors" as
defined for purposes of Section 162(m) ("Section 162(m)") of the Code. The
Committee will determine: (i) which officers and employees of the Company and
its subsidiaries shall be granted Options; (ii) the number of shares subject to
each such Option; (iii) the amount to be paid by a grantee upon exercise of
Options; (iv) the terms and conditions subject to which Options may be
exercised; (v) the form of consideration that may be used to pay for shares
issued upon exercise of such Options; and (vi) such other matters in its
discretion as provided for by the Plan. The Committee will also be responsible
for the administration and interpretation of the Plan.
Only "Key Employees" of the Company and its affiliates are eligible to
receive Non-Qualified Options under the Plan and only "Key Employees" of the
Company and its subsidiaries are eligible to receive ISO Options under the Plan.
For purposes of the Plan, the term "Key Employees" means any executive officer,
senior manager or other key employees that contribute significantly to the
overall performance of the Company, its subsidiaries and/or other affiliates.
The Plan provides that the maximum number of shares of Common Stock for
which Options may be granted to any person during any calendar year shall not
exceed 150,000 shares of Common Stock (subject to adjustments upon certain
changes in the capital structure of the Company), as set forth in the Plan. To
the extent that shares of Common Stock for which Options are permitted to be
granted to a participant during a calendar year are not covered by a grant of an
Option in such year, such shares of Common Stock shall increase the number of
shares available for the grant Options to such participant in the subsequent
calendar year.
The Board of Directors or the Committee has the authority to amend the Plan
at any time, provided that Stockholder approval will be required to: (i)
increase the aggregate number of shares of Common Stock as to which Options may
be granted (except for increases due to adjustments upon changes in the capital
structure of the Company); (ii) decrease the exercise price of any Option
(subject to adjustments upon changes in the capital structure of the Company);
or (iii) make any other amendment that would require Stockholder approval under
the rules of any exchange or system on which the Company's securities are listed
or traded. Solely to the extent required by the applicable provisions of Rule
16b-3 under the Exchange Act or Section 162(m) of the code, or, with respect to
ISO Options, under Section 422 of the Code, no amendment may be made without the
approval of the Stockholders of the Company which would: (i) increase the
maximum individual participant limitations for a calendar year; (ii) change the
classification of persons eligible to receive Options under the Plan; or (iii)
extend the maximum term of Options.
The Board of Directors or the Committee may terminate the Plan at any time.
No Options may be granted on or after the tenth anniversary of the date of
Stockholder approval of the Plan, unless terminated prior thereto. The
termination or amendment of the Plan will not alter or impair any rights or
obligations under any Options previously granted under the Plan.
The Plan provides that Options granted thereunder will not be transferable
other than by will or by laws of descent and distribution, and during an
optionee's lifetime, Options will be exercisable only by the optionee.
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<PAGE> 28
The market value of the Company's Common Stock as of the close of business
on March 9, 1998, as reflected by the closing price of the Common Stock on the
New York Stock Exchange, was $28.75 per share.
Grants of Options are at the discretion of the Committee and, thus, the
amount of such grants, if any, are presently not determinable. To date, no
Options have been granted.
FEDERAL INCOME TAX CONSEQUENCES
The tax consequences of incentive stock options and non-qualified options
are complex. Therefore, the description of tax consequences set forth below is
necessarily general in nature and does not purport to be complete. Moreover,
statutory provisions are subject to change, as are their interpretations, and
their application may vary in individual circumstances. The tax consequences
under applicable state and local income tax laws may not be the same as under
the federal income tax laws.
ISO Options granted pursuant to the Plan are intended to qualify as
"Incentive Stock Options" within the meaning of Section 422 of the Code. If an
optionee makes no disposition of the shares acquired pursuant to exercise of an
incentive stock option within one year after the transfer of shares to such
optionee and within two years from grant of the option, such optionee will
realize no taxable income as a result of the grant or exercise of such option;
any gain or loss than is subsequently realized may be treated as long-term
capital gain or loss, as the case may be. Under these circumstances, the Company
will not be entitled to a deduction for federal income tax purposes with respect
to either the issuance of such incentive stock options or the transfer of shares
upon their exercise.
If shares subject to incentive stock options are disposed of prior to the
expiration of the above time periods, the optionee will recognize ordinary
income in the year in which the disqualifying disposition occurs, the amount of
which will generally be the lesser of (i) the excess of the market value of the
shares on the date of exercise over the option price, or (ii) the gain
recognized on such disposition. Such amount will ordinarily be deductible by the
Company for federal income tax purposes in the same year, provided that the
Company satisfies certain federal income tax reporting requirements. In
addition, the excess, if any, of the amount realized on a disqualifying
disposition over the market value of the shares on the date of exercise will be
treated as capital gain.
Non-Qualified Options may also be granted under the Plan. An optionee who
exercises a Non-Qualified Option will recognize as taxable ordinary income, at
the time of exercise, an amount equal to the excess of the fair market value of
the shares on the date of exercise over the exercise price. Such amount will
ordinarily be deductible by the Company in the same year, provided that the
Company satisfies certain federal income tax withholding requirements that may
be applicable.
The discussion above pertaining to a deduction of the Company is qualified
by the application of Section 162(m). Pursuant to Section 162(m), the maximum
allowable deduction for compensation paid or accrued by the Company with respect
to the chief executive officer of the Company or any of the four most highly
compensated officers of the Company (other than the chief executive officer) is
limited to $1 million per year. However, compensation is tax deductible without
regard to such limitations if the compensation satisfies the "performance-based"
requirements of the rules and regulations under
26
<PAGE> 29
Section 162(m). The Plan is intended to meet the requirements of Section 162(m),
and, if Stockholder approval is obtained, the Company expects that deductions
will not be limited thereby.
VOTE REQUIRED FOR APPROVAL
The Plan will be submitted to Stockholders for their approval at the Annual
Meeting. The proposal to adopt the Plan must be approved by the holders of a
majority of the shares of Common Stock present or represented by proxy and
entitled to vote at the Annual Meeting.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL OF THE
1998 STOCK OPTION PLAN.
4. STOCKHOLDER PROPOSAL REQUESTING
CUMULATIVE VOTING IN THE ELECTION OF DIRECTORS
Mr. John J. Gilbert and Ms. Margaret R. Gilbert of 29 East 64th Street, New
York, NY 10021-7043, and Ms. Bernadette Liberti of 598 Centre Avenue,
Lindenhurst, NY 11757, the beneficial owners of 1,080 shares in the aggregate,
have indicated that the following resolution will be introduced at the meeting:
RESOLVED: That the stockholders of Church & Dwight Co., Inc.,
assembled in annual meeting in person and by proxy, hereby request the
Board of Directors to take the steps necessary to provide for cumulative
voting in the election of directors, which means each stockholder shall be
entitled to as many votes as shall equal the number of shares he or she
owns multiplied by the number of directors to be elected, and he or she may
cast all of such votes for a single candidate, or any two or more of them
as he or she may see fit.
REASONS: California law still requires that unless stockholders have
voted not to have cumulative voting they will have it. Ohio also has the
same provision.
The National Bank Act provides for cumulative voting. In many cases
companies get around it by forming holding companies without cumulative
voting. Banking authorities have the right to question the capability of
directors to be on banking boards. In many cases authorities come in after
and say the director or directors were not qualified. We were delighted to
see the SEC has finally taken action to prevent bad directors from being on
boards of public companies. The SEC should have hearings to prevent such
persons becoming directors before they harm investors.
Many successful corporations have cumulative voting. Example, Pennzoil
defeated Texaco in that famous case. Texaco's recent problems might have
also been prevented with cumulative voting getting directors on the board
to prevent such things. Ingersoll-Rand, also having cumulative voting, won
two awards. FORTUNE magazine ranked it second in its industry as "America's
Most Admired Corporations" and the WALL STREET TRANSCRIPT noted "on almost
any criteria used to evaluate management, Ingersoll-Rand excels." In 1994
and 1995 they raised their dividend.
Lockheed-Martin, as well as VWR Corporation, now have a provision that
if anyone has 40% or more of the shares cumulative voting applies; it does
apply at the latter company.
27
<PAGE> 30
In 1995 American Premier adopted cumulative voting. Alleghany Power
System tried to take away cumulative voting, as well as put in a stagger
system, and stockholders defeated it, showing stockholders are interested
in their rights. Also, Hewlett Packard, a very successful company, has
cumulative voting.
Another reason to have cumulative voting is to see that we have some
directors elected to the board who will have a chairman who will conduct
the meeting with an agenda and also to see that we end the stagger system
of electing directors, which more and more companies are now properly
doing.
If you agree, please mark your proxy for this resolution; otherwise it
is automatically cast against it, unless you have marked to abstain.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE AGAINST THIS PROPOSAL.
A similar proposal was submitted to stockholders by Messrs. John J. Gilbert
and Lewis D. Gilbert at the 1993 Annual Meeting of Stockholders. The proposal
was overwhelmingly rejected with 93% of the votes cast against the proposal,
including 2% abstentions.
Cumulative voting is the process by which votes may be accumulated and
distributed among any number of nominees instead of being spread ratably among
as many candidates as there are vacancies to be filled. Under cumulative voting,
each Stockholder is entitled to cast as many votes as are equal to the number of
votes eligible to be cast, multiplied by the number of Directors to be elected
(the discussion on page 30 outlines the procedures for determining the number of
votes per share of Stock).
As a consequence, cumulative voting permits special groups of stockholders
to elect Directors to represent their particular interests or points of view.
The Company has sought to place broad powers in the hands of the entire Board of
Directors to enable the Board to represent all Stockholders. The Board of
Directors believes each Director should act on behalf and for the benefit of,
all the Stockholders rather than as a representative of any particular group.
Cumulative voting may negatively impact the ability of the Board to work
together to the detriment of the Company and its shareholders. The election of
each Director by a majority vote of Stockholders permits the Directors to
administer the functions of the Company for the benefit of all Stockholders.
For these reasons, the Board of Directors believes that the adoption of
this proposal would not be in the best interest of Stockholders and recommends
that Stockholders vote AGAINST this proposal.
The affirmative vote of such number of shares as shall be entitled to cast
a majority of the votes represented in person or proxy at the Annual Meeting is
required for approval of this proposal.
OTHER BUSINESS
The Management is not aware of any matters, other than as indicated above,
that will be presented for action at the meeting. However, if any other matters
properly come before the meeting, it is
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<PAGE> 31
understood that the persons named in the enclosed form of proxy intend to vote
such proxy in accordance with their best judgment on such matters.
Stockholders' proposals for the 1999 Annual Meeting of Stockholders must be
received no later than December 2, 1998, at the executive offices of the
Company, 469 North Harrison Street, Princeton, New Jersey 08543-5297, Attention:
Secretary, in order to be considered for inclusion in the Company's Proxy
Statement for such meeting.
ANNUAL REPORT AND FORM 10-K
THE ANNUAL REPORT TO STOCKHOLDERS OF THE COMPANY FOR 1997, INCLUDING
FINANCIAL STATEMENTS, IS BEING FURNISHED, SIMULTANEOUSLY WITH THIS PROXY
STATEMENT, TO ALL STOCKHOLDERS OF RECORD AS OF THE CLOSE OF BUSINESS ON MARCH 9,
1998, THE RECORD DATE FOR VOTING AT THE ANNUAL MEETING. A COPY OF THE COMPANY'S
ANNUAL REPORT AND FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1997, INCLUDING THE
FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULES, BUT EXCLUDING THE
EXHIBITS THERETO, WILL BE PROVIDED WITHOUT CHARGE TO STOCKHOLDERS UPON WRITTEN
REQUEST TO SECRETARY, CHURCH & DWIGHT CO., INC., 469 N. HARRISON STREET,
PRINCETON, NEW JERSEY, 08543-5297. THE FORM 10-K PROVIDED TO STOCKHOLDERS WILL
INCLUDE A LIST OF EXHIBITS TO THE FORM 10-K. COPIES OF EXHIBITS WILL BE
FURNISHED TO STOCKHOLDERS UPON WRITTEN REQUEST AND UPON PAYMENT OF REPRODUCTION
AND MAILING EXPENSES.
MARK A. BILAWSKY
Vice President, General Counsel
and Secretary
Princeton, New Jersey
April 1, 1998
29
<PAGE> 32
PROCEDURES FOR DETERMINING CHANGES IN
BENEFICIAL OWNERSHIP OF COMPANY COMMON STOCK
Effective February 19, 1986, the Restated Certificate of Incorporation of
Church & Dwight Co., Inc. (the "Company") was amended (the "Amendment") to
provide that, subject to the provisions below, every share of Company Common
Stock is entitled to four votes per share if it has been beneficially owned
continuously by the same holder (i) for a period of 48 consecutive months
preceding the record date for the Stockholders' Meeting; or (ii) since February
19, 1986. All other shares carry one vote.
In general, the Amendment provides that a change in beneficial ownership of
a share of Company Common Stock occurs whenever any change occurs in any person
or group who has or shares voting power, investment power or the right to
receive sale proceeds with respect to such share.
In the absence of proof to the contrary, provided in accordance with the
procedures referred to below, a change in beneficial ownership shall be deemed
to have occurred whenever a share of Company Common Stock is transferred of
record into the name of any other person.
In the case of a share of Company Common Stock held of record in the name
of a corporation, partnership, voting trustee, bank, trust company, broker,
nominee or clearing agency, or in any other name except a natural person, there
shall be presumed to have been a change in beneficial ownership in such share
within the 48 months preceding the record date, unless it has been established
to the contrary pursuant to such procedures.
There are several exceptions and qualifications to the terms of the
Amendment described above, including, but not limited to, a change in beneficial
ownership as a result of a gift or inheritance. For a copy of the complete
Amendment, please contact the Company at 469 North Harrison Street, Princeton,
New Jersey 08543-5297, Attn.: Secretary.
Stockholders who hold their Shares in "street name" or through any other
method specified above are required to submit proof of continued beneficial
ownership to the Company in order to be entitled to four votes per share. Such
proof must consist of a written certification by the record owner that there has
been no change in beneficial ownership (as defined in the Amendment) during the
relevant period. The required form for this certification will be the completion
of the section provided on the proxy card which indicates the number of one-vote
shares, four-vote shares and total number of votes. The Company reserves the
right, however, to require evidence in addition to the certification in
situations where it reasonably believes an unreported change may have occurred.
Proof (including certifications) will be accepted only if it is received by the
Company at least five days before the date for the Stockholders' Meeting.
The Company will notify stockholders of record who are natural persons, in
advance of a Stockholders' Meeting, of the Company's determination as to the
number of shares for which they are entitled to four votes per share and the
number of shares for which they are entitled to one vote per share. This
determination will be shown on the proxy cards for such stockholders.
Stockholders of record who disagree with such determination may certify that no
change in beneficial ownership has occurred during the relevant period, by
following the same procedure set out in the previous paragraph for other
stockholders, with the same reserved right of the Company to require additional
evidence.
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<PAGE> 33
CHURCH & DWIGHT CO., INC.
Stockholder Certification Form
for the
Annual Meeting of Stockholders
on
May 7, 1998
USE ONLY IF YOU CLAIM MORE VOTING RIGHTS
THAN INDICATED ON YOUR PROXY CARD.
The Undersigned certifies that:
1. Of the _____ shares of the Company's Common Stock held of record by the
Undersigned on March 9, 1998, _____ shares have been beneficially owned
continuously by the same person for 48 consecutive months preceding the record
date; and
2. (Applicable only to stockholders who are natural persons) -- the
following is a statement supporting why the Undersigned disagrees with the
Company's determination of the voting power (as shown on the proxy card) to
which the Undersigned is entitled in connection with the Annual Meeting:
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Dated:
------------------------------------
------------------------------------
------------------------------------
------------------------------------
Signature of Stockholder(s)
Please sign exactly as your name appears on the proxy card for the meeting. When
shares are held by joint tenants, both should sign. When signing as attorney,
executor, administrator, trustee or guardian, please give full title as such. If
a corporation, please sign in full corporate name by President or other
authorized officer. If a partnership, please sign in partnership name by
authorized person.
The certification should be returned to:
Church & Dwight Co., Inc.
469 North Harrison Street
Princeton, New Jersey 08543-5297
Attention: Secretary
<PAGE> 34
EXHIBIT A
CHURCH & DWIGHT CO., INC.
1998 STOCK OPTION PLAN
SECTION 1. PURPOSE
The purpose of the Church & Dwight Co., Inc. 1998 Stock Option Plan (the
"Plan") is to enhance the profitability and value of the Company and its
Affiliates for the benefit of their Stockholders by enabling the Company to
offer Key Employees of the Company and its Affiliates, stock based incentives in
the Company, thereby creating a means to raise the level of stock ownership by
employees in order to attract, retain and reward such individuals and strengthen
the mutuality of interests between such individuals and the Company's
Stockholders. The Plan is effective as of the date set forth in Section 9.
SECTION 2. DEFINITIONS
For purposes of the Plan, the following terms shall have the following
meanings:
2.1 "Affiliate" shall mean other than the Company, (i) any corporation in
an unbroken chain of corporations beginning with the Company, or in the event
the Company is a subsidiary within the meaning of Code Section 424(f), beginning
with the Company's parent within the meaning of Code Section 424(e), which owns
stock possessing fifty percent (50%) or more of the total combined voting power
of all classes of stock in one of the other corporations in such chain; (ii) any
corporation, trade or business (including, without limitation, a partnership or
limited liability company) which is controlled fifty percent (50%) or more
(whether by ownership of stock, assets or an equivalent ownership interest or
voting interest) by the Company or one of its Affiliates; or (iii) any other
entity, approved by the Committee as an Affiliate under the Plan, in which the
Company or any of its Affiliates has a material equity interest.
2.2 "Board" shall mean the Board of Directors of the Company.
2.3 "Code" shall mean the Internal Revenue Code of 1986, as amended. Any
reference to any section of the Code shall also be a reference to any successor
provision.
2.4 "Committee" shall mean a committee or subcommittee of the Board
appointed from time to time by the Board, which committee or subcommittee shall
be intended to consist of two (2) or more non-employee directors, each of whom
shall be, to the extent required by Rule 16b-3 a "non-employee director" as
defined in Rule 16b-3 and, to the extent required by Section 162(m) of the Code,
an "outside director" as defined under Section 162(m) of the Code.
Notwithstanding the foregoing, if and to the extent that no Committee exists
which has the authority to administer the Plan, the functions of the Committee
shall be exercised by the Board. If for any reason the appointed Committee does
not meet the requirements of Rule 16b-3 or Section 162(m) of the Code, such
noncompliance with the requirements of Rule 16b-3 or Section 162(m) of the Code
shall not affect the validity of the awards, grants, interpretations or other
actions of the Committee.
2.5 "Common Stock" shall mean, subject to Section 4 hereof, the common
stock, [$1.00] par value per share, of the Company.
A-1
<PAGE> 35
2.6 "Company" shall mean Church & Dwight Co., Inc., a Delaware corporation,
and its successors and assigns.
2.7 "Effective Date" shall mean the effective date of the Plan as defined
in Section 9.
2.8 "Eligible Employees" shall mean the Key Employees of the Company and
its Affiliates who are eligible pursuant to Section 5.1 to be granted Stock
Options under the Plan. Notwithstanding the foregoing, with respect to the grant
of Incentive Stock Options, Eligible Employees shall mean the Key Employees of
the Company, its Subsidiaries and its Parent (within the meaning of Code Section
424(e)) who are eligible pursuant to Section 5.2 to be granted Stock Options
under the Plan.
2.9 "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
2.10 "Fair Market Value" for purposes of the Plan, unless otherwise
required by any applicable provision of the Code or any regulations issued
thereunder, shall mean, as of any date, the average of the high and low sales
price reported for the Common Stock on the applicable date (i) as reported on
the principal national securities exchange on which it is then traded or the
NASDAQ Stock Market, Inc. or (ii) if not traded on any such national securities
exchange or the NASDAQ Stock Market, Inc., as quoted on an automated quotation
system sponsored by the National Association of Securities Dealers. If the
Common Stock is not readily tradable on a national securities exchange, the
NASDAQ Stock Market, Inc., or any other automated quotation system sponsored by
the National Association of Securities Dealers, its Fair Market Value shall be
set in good faith by the Committee. For purposes of the grant of any Stock
Option, the applicable date shall be the date on which the Option is granted or,
if the sale of the Common Stock shall not have been reported or quoted on such
date, on the first day prior thereto on which the sale of the Common Stock was
reported or quoted.
2.11 "Incentive Stock Option" shall mean any Stock Option awarded under the
Plan intended to be and designated as an "Incentive Stock Option" within the
meaning of Section 422 of the Code.
2.12 "Key Employee" shall mean an executive officer, senior manager or
other key employee that contributes significantly to the overall performance of
the Company and its Subsidiaries and/or other Affiliates.
2.13 "Non-Qualified Stock Option" shall mean any Stock Option awarded under
the Plan that is not an Incentive Stock Option.
2.14 "Participant" shall mean any Eligible Employee of the Company or its
Affiliates who has been granted a Stock Option pursuant to Section 6.
2.15 "Rule 16b-3" shall mean Rule 16b-3 under Section 16(b) of the Exchange
Act as then in effect or any successor provisions.
2.16 "Section 162(m) of the Code" shall mean the exception for
performance-based compensation under Section 162(m) of the Code and any Treasury
regulations thereunder.
2.17 "Stock Option" or "Option" shall mean any Option to purchase shares of
Common Stock granted to Eligible Employees pursuant to Section 6.
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2.18 "Subsidiary" shall mean any subsidiary corporation of the Company
within the meaning of Section 424(f) of the Code.
2.19 "Ten Percent Stockholder" shall mean a person owning stock of the
Company possessing more than 10% of the total combined voting power of all
classes of stock of the Company or its Subsidiaries or its Parent corporations
as defined in Section 424(e) of the Code.
2.20 "Transfer" or "Transferred" shall mean anticipate, alienate, attach,
sell, assign, pledge, encumber, charge or otherwise transfer.
SECTION 3. ADMINISTRATION
3.1 The Committee. The Plan shall be administered and interpreted by the
Committee.
3.2 Awards. The Committee shall have full authority to grant, pursuant to
the terms of the Plan (including Section 5 hereof), Stock Options to Eligible
Employees and to otherwise administer the Plan. In particular, the Committee
shall have the authority:
(a) to select the Eligible Employees to whom Stock Options may from
time to time be granted hereunder;
(b) to determine whether and to what extent Stock Options are to be
granted hereunder to one or more Eligible Employees;
(c) to determine, in accordance with the terms of the Plan, the number
of shares of Common Stock to be covered by each Stock Option granted to an
Eligible Employee;
(d) to determine the terms and conditions, not inconsistent with the
terms of the Plan, of any Stock Option granted hereunder to an Eligible
Employee (including, but not limited to, the exercise or purchase price (if
any), any restriction or limitation, any vesting schedule or acceleration
thereof, or any forfeiture restrictions or waiver thereof, regarding any
Stock Option, and the shares of Common Stock relating thereto, based on
such factors, if any, as the Committee shall determine, in its sole
discretion);
(e) to determine whether and under what circumstances a Stock Option
may be settled in cash and/or Common Stock;
(f) to modify, extend or renew a Stock Option, subject to Section 8.1
hereof, provided however, that if a Stock Option is modified, extended or
renewed and thereby deemed to be the issuance of a new Stock Option under
the Code or the applicable accounting rules, the exercise price of such
Stock Option may continue to be the original exercise price even if less
than the Fair Market Value of the Common Stock at the time of such
modification, extension or renewal; and
(g) to offer to buy out an Option previously granted, based on such
terms and conditions as the Committee shall establish and communicate to
the Participant at the time such offer is made.
3.3. Guidelines. Subject to Section 8 hereof, the Committee shall have the
authority to adopt, alter and repeal such administrative rules, guidelines and
practices governing the Plan and perform all acts, including the delegation of
its administrative responsibilities, as it shall, from time to time, deem
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advisable; to construe and interpret the terms and provisions of the Plan and
any Stock Option issued under the Plan (and any agreements relating thereto);
and to otherwise supervise the administration of the Plan. The Committee may
correct any defect, supply any omission or reconcile any inconsistency in the
Plan or in any agreement relating thereto in the manner and to the extent it
shall deem necessary to carry the Plan into effect, but only to the extent any
such action would be permitted under the applicable provisions of both Rule
16b-3 and Section 162(m) of the Code. The Committee may adopt special guidelines
and provisions for persons who are residing in, or subject to, the taxes of,
countries other than the United States to comply with applicable tax and
securities laws. To the extent applicable, the Plan is intended to comply with
the applicable requirements of Rule 16b-3 and section 162(m) of the code and
shall be limited, construed and interpreted in a manner so as to comply
therewith.
3.4. Decisions Final. Any decision, interpretation or other action made or
taken in good faith by or at the direction of the Company, the Board, or the
Committee (or any of its members) arising out of or in connection with the Plan
shall be within the absolute discretion of the Company, the Board or the
Committee, as the case may be, and shall be final, binding and conclusive on the
Company and all employees and Participants and their respective heirs,
executors, administrators, successors, and assigns.
3.5. Reliance on Counsel. The Company, the Board or the Committee may
consult with legal counsel, who may be counsel for the Company or other counsel,
with respect to its obligations, or duties hereunder, or with respect to any
action or proceeding or any question of law, and shall not be liable with
respect to any action taken or omitted by it in good faith pursuant to the
advise of such counsel.
3.6. Procedures. If the Committee is appointed, the Board may, but need
not, designate one of the members of the Committee as chairman and the Committee
shall hold meetings, subject to the By-Laws of the Company, at such times and
places including, without limitation, by telephone conference or by written
consent, as the Committee shall deem advisable. A majority of the Committee
shall be made by a majority of its members. Any decision or determination
reduced to writing and signed by all the Committee members in accordance with
the By-Laws of the Company shall be fully as effective as if it had been made by
a vote at a meeting duly called and held. The Committee may keep minutes of its
meetings and may make such rules and regulations for the conduct of its business
as it shall deem advisable.
3.7. Designation of Consultants/Liability
(a) The Committee may designate employees of the Company and
professional advisors to assist the Committee in the administration of the
Plan and may grant authority to employees to execute agreements or other
documents on behalf of the Committee.
(b) The Committee may employ such legal counsel, consultants and
agents as it may deem desirable for the administration of the Plan and may
rely upon any opinion received from any such counsel or consultant and any
computation received from any such consultant or agent. Expenses incurred
by the Committee or Board in the engagement of any such counsel, consultant
or agent shall be paid by the Company. The Committee, its members and any
person designated pursuant to paragraph (a) above shall not be liable for
any action or determination made in good faith with respect to the Plan. To
the maximum extent permitted by applicable law, no officer of the Company
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or member or former member of the Committee or of the Board shall be liable
for any action or determination made in good faith with respect to the Plan
or any Stock Options granted under it. To the maximum extent permitted by
applicable laws and the Restated Certificate of Incorporation and By-Laws
of the Company and to the extent not covered by insurance, each officer and
member or former member of the Committee or of the Board shall be
indemnified and held harmless by the Company against any cost or expense
(including reasonable fees of counsel reasonably acceptable to the Company)
or liability (including any sum paid in settlement of a claim with the
approval of the Company), and advanced amounts necessary to pay the
foregoing at the earliest time and to the fullest extent permitted, arising
out of any act or omission to act in connection with the Plan, except to
the extent arising out of such officer's, member's or former member's own
fraud or bad faith. Such indemnification shall be in addition to any rights
of indemnification the officers, directors or member or former officers,
directors or members may have under applicable law or under the Restated
Certificate of Incorporation or By-Laws of the Company or Affiliate.
Notwithstanding anything else herein, this indemnification will not apply
to the actions or determinations made by an individual with regard to Stock
Options granted to him/her under the Plan.
SECTION 4. SHARES AND OTHER LIMITATIONS
4.1 Shares.
(a) General Limitation. The aggregate number of shares of Common
Stock which may be issued under the Plan shall not exceed three million
(3,000,000) shares (subject to any increase or decrease pursuant to section
4.2), which may be either authorized and unissued Common Stock or Common
Stock held in or acquired for the treasury of the Company or both. If any
Stock Option granted under the Plan expires, terminates or is canceled for
any reason without having been exercised in full, the number of shares of
Common Stock underlying the unexercised Option shall again be available
under the Plan. In addition, in determining the number of shares of Common
Stock available for awards other than awards of Incentive Stock Options, if
Common Stock has been exchanged by a Participant as full or partial payment
to the Company, or for withholding, in connection with the exercise of a
Stock Option or the number of shares of Common Stock otherwise deliverable
has been reduced for withholding, the number of shares of Common Stock
exchanged as payment in connection with the exercise or for withholding or
reduced shall again be available under the Plan. Any shares of Common Stock
that are issued by the Company for, and any awards that are granted through
the assumption of or in substitution for, outstanding awards previously
granted by an acquired entity shall not be counted against the shares of
Common Stock available for issuance under the Plan other than with regard
to determining the number of shares available for Incentive Stock Options.
(b) Individual Participant Limitations. The maximum number of shares
of Common Stock subject to any Option which may be granted under the Plan
to each Participant during each calendar year during the term of the Plan
shall not exceed one hundred fifty thousand (150,000) shares (subject to
any increase or decrease pursuant to Section 4.2). To the extent the shares
of Common Stock for which Options are permitted to be granted to a
Participant pursuant to this section 4.1(b) during a calendar year are not
covered by a grant of an Option to a Participant issued in such
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<PAGE> 39
calendar year, such shares of Common Stock shall automatically increase the
number of shares available for grant of Options to such Participant in the
subsequent calendar year during the term of the Plan.
4.2. Changes
(a) The existence of the Plan and the Stock Options granted hereunder
shall not affect in any way the right or power of the Board or the
Stockholders of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, any merger or consolidation of the Company or
Affiliates, any issue of bonds, debentures, preferred or prior preference
stock ahead of or affecting Common Stock, the authorization or issuance of
additional shares of Common Stock, the dissolution or liquidation of the
Company or Affiliates, any sale or transfer of all or part of its assets or
business or any other corporate act or proceeding.
(b) In the event of any change in the capital structure or business of
the Company by reason of any stock dividend or extraordinary dividend,
stock split or reverse stock split, recapitalization, reorganization,
merger, consolidation, split-up, combination or exchange of shares,
non-cash distributions with respect to its outstanding Common Stock or
capital stock other than Common Stock, reclassification of its capital
stock, any sale or transfer of all or part of the Company's assets or
business, or any similar change affecting the Company's capital structure
or business and the Committee determines in good faith that an adjustment
is necessary or appropriate under the Plan to prevent substantial dilution
or enlargement of the rights granted to, or available for, Participants
under the Plan or as otherwise necessary to reflect the change, then the
aggregate number and kind of shares which thereafter may be issued under
the Plan, the number and kind of shares or other property (including cash)
to be issued upon exercise of an outstanding Option granted under the Plan
and the purchase or exercise price thereof shall be appropriately adjusted
consistent with such change in such manner as the Committee may deem
equitable to prevent substantial dilution or enlargement of the rights
granted to, or available for, Participants under the Plan or as otherwise
necessary to reflect the change, and any such adjustment determined by the
Committee in good faith shall be binding and conclusive on the Company and
all Participants and employees and their respective heirs, executor,
administrators, successors and assigns.
(c) Fractional shares of Common Stock resulting from any adjustment in
Options pursuant to Section 4.2(a) or (b) shall be aggregated until, and
eliminated at, the time of exercise. No fractional shares of Common Stock
shall be issued under the Plan. The Committee may, in its sole discretion,
pay cash in lieu of any fractional shares of Common Stock in settlement of
awards under the Plan. Notice of any adjustment shall be given by the
Committee to each Participant whose Option has been adjusted and such
adjustment (whether or not such notice is given) shall be effective and
binding for all purposes of the Plan.
4.3. Purchase Price. Notwithstanding any provision of the Plan to the
contrary, if authorized but previously unissued shares of Common Stock are
issued under the Plan, such shares shall not be issued for a consideration which
is less than par value.
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<PAGE> 40
SECTION 5. ELIGIBILITY
5.1. Non-Qualified Stock Options. All Key Employees of the Company and its
Affiliates are eligible to be granted Non-Qualified Stock Options under the
Plan. Eligibility under the Plan shall be determined by the Committee in its
sole discretion.
5.2. Incentive Stock Options. All Key Employees of the Company, it
Subsidiaries and its Parent (within the meaning of Code Section 424(e)) are
eligible to be granted Incentive Stock Options under the Plan. Eligibility under
the Plan shall be determined by the Committee in its sole discretion.
SECTION 6. STOCK OPTION GRANTS
6.1. Options. Stock Options granted hereunder shall be one of two types:
(i) an Incentive Stock Option intended to satisfy the requirements of Section
422 of the Code or (ii) a Non-Qualified Stock Option.
6.2. Grants. The Committee shall have the authority to grant to any
Eligible Employee one or more Incentive Stock Options, Non-Qualified Stock
Options, or both types of Stock Options. To the extent that any Stock Option
does not qualify as an Incentive Stock Option (whether because of its provisions
or the time or manner of its exercise or otherwise), such Stock Option or the
portion thereof which does not so qualify, shall constitute a separate
Non-Qualified Stock Option.
6.3. Terms of Options. Options granted under the Plan shall be subject to
the following terms and conditions, shall be subject to Section 3.2 hereof and
the other provisions of this Plan, and shall be in such form and contain such
additional terms and conditions, not inconsistent with the terms of the Plan, as
the Committee shall deem desirable:
(a) Option Price. The option price per share of Common Stock subject
to an Incentive Stock Option shall be determined by the Committee at the
time of grant, but shall not be less than 100% of the Fair Market Value of
a share of Common Stock at the time of grant; provided, however, that if an
Incentive Stock Option is granted to a Ten Percent Stockholder, the
purchase price shall be no less than 110% of the Fair Market Value of the
Common Stock. The purchase price of shares of Common Stock subject to a
Non-Qualified Stock Option shall be determined by the Committee but shall
not be less than the 100% of the Fair Market Value of a share of Common
Stock at the time of grant.
(b) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Stock Option shall be exercisable more than ten (10)
years after the date the Option is granted, provided, however, the term of
an Incentive Stock Option granted to a Ten Percent Stockholder may not
exceed five (5) years.
SECTION 7. NON-TRANSFERABILITY
7.1. Non-Transferability. Except as provided in the last sentence of this
Section 7.1, no Stock Option shall be transferred by the Participant otherwise
than by will or by the laws of descent and distribution, all Stock Options shall
be exercisable, during the Participant's lifetime, only by the Participant, no
Stock Option shall, except as otherwise specifically provided by law or herein,
be transferred in any manner, and any attempt to transfer any such Stock Option
shall be void. No such
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<PAGE> 41
Stock Option shall in any manner be used for the payment of, subject to, or
otherwise encumbered by or hypothecated for debts, contracts, liabilities,
engagements or torts of any person who shall be entitled to such Stock Option,
nor shall it be subject to attachment or legal process for or against such
person. Notwithstanding the foregoing, the Committee may determine at the time
of grant or thereafter, that a Stock Option other than an Incentive Stock
Option, that is otherwise not transferable pursuant to this Section 7 is
transferable in whole or part and in such circumstances, and under such
conditions, as specified by the Committee.
SECTION 8. TERMINATION OR AMENDMENT OF THE PLAN
8.1. Termination or Amendment. Notwithstanding any other provision of the
Plan, the Board or the Committee may at any time, and from time to time, amend,
in whole or in part, any or all of the provisions of the Plan (including any
amendment deemed necessary to ensure that the Company may comply with any
regulatory requirement referred to in this Section 8 or suspend or terminate it
entirely, retroactively or otherwise; provided, however, that, unless otherwise
required by law or specifically provided herein, the rights of a Participant
with respect to Stock Options granted prior to such amendment, suspension or
termination, may not be impaired without the consent of such Participant and,
provided further, that the Plan may not be amended without the approval of the
Stockholders of the Company in accordance with the laws of the State of
Delaware, to (i) increase the aggregate number of shares of Common Stock that
may be issued under the Plan (subject to Section 4.2); (ii) decrease the minimum
Option price of any Stock Option; or (iii) make any other amendment that would
require Stockholder approval under the rules of any exchange or system on which
the Company's securities are listed or traded. In addition, solely to the extent
required by the applicable provisions of Rule 16b-3 or Section 162(m) of the
Code, or with respect to Incentive Stock Options, Section 422 of the Code, no
amendment may be made without the approval of Stockholders of the Company in
accordance with the laws of the State of Delaware which would (i) increase the
maximum individual Participant limitations for a calendar year under Section
4.1(b); (ii) change the classification of employees eligible to receive Stock
Options under the Plan; or (iii) extend the maximum Option term under Section
6.3(b).
The Committee may amend the terms of any Stock Option theretofore granted,
prospectively or retroactively, but, subject to Section 4 above or as otherwise
specifically provided herein, no such amendment or other action by the Committee
shall impair the rights of any Option holder without the Option holder's
consent.
SECTION 9. EFFECTIVE DATE OF PLAN
The Plan has been adopted by the Board effective as of , subject
to and conditioned upon the approval of the Plan by the Stockholders of the
Company in accordance with the laws of the State of Delaware and requirements of
any applicable national securities exchange or automated quotation system.
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SECTION 10. TERM OF PLAN
No Stock Option shall be granted pursuant to the Plan on or after the tenth
anniversary of the earlier of the Effective Date or the date of Stockholder
approval, but such Stock Options granted prior to such date may extend beyond
that date.
SECTION 11. NAME OF PLAN
The Plan shall be known as the "Church & Dwight Co., Inc. 1998 Stock Option
Plan."
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A-10
<PAGE> 44
Church &
Dwight Co., Inc.
1998
-------------------------------------
NOTICE OF
ANNUAL MEETING
OF STOCKHOLDERS
AND
PROXY STATEMENT
-------------------------------------
MEETING DATE
MAY 7, 1998
Church & Dwight Co., Inc.
469 North Harrison Street
Princeton, New Jersey 08543-5297 Arm&HammerLogo
Consumer and Specialty Products
<PAGE> 45
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
CHURCH & DWIGHT CO., INC.
469 NORTH HARRISON STREET, PRINCETON, NJ 08543-5297
The Undersigned, having received the Notice of Meeting and Proxy Statement
dated April 1, 1998, hereby appoints ROSINA B. DIXON, M.D.; JOHN D. LEGGETT,
III, Ph.D.; and DWIGHT C. MINTON, and each of them, proxies, each with power
to appoint his/her substitute, to vote all shares of stock which the
Undersigned is entitled to vote at the Annual Meeting of Stockholders of
Church & Dwight Co., Inc. to be held on Thursday, the 7th day of May, 1998
at THE ASIA SOCIETY, 725 Park Avenue, New York, New York, at 11:00 a.m., and
at all adjournments thereof, upon such matters as may properly come before
the meeting and the following items as set forth in the Notice of Meeting
and Proxy Statement:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR ITEMS 1 , 2 AND 3.
1. Election of Nominees for Directors as listed below (except as marked to
the contrary below). FOR [ ] WITHHOLD AUTHORITY [ ]
Nominees: Robert H. Beeby, J. Richard Leaman, Jr., Dwight C. Minton and
John O. Whitney.
INSTRUCTION: To withhold authority to vote for any nominee(s), print such
nominee's name(s) in the space provided below.
- --------------------------------------------------------------------------------
2. Approval of appointment of Deloitte & Touche as independent auditors of
the Company's 1998 financial statements.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
----------------------------------------------------------------------------
----------------------------------------------------------------------------
3. Proposal to approve the 1998 Stock Option Plan.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
----------------------------------------------------------------------------
----------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEM 4.
4. A Stockholder proposal relating to cumulative voting in the election of
Directors.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
----------------------------------------------------------------------------
----------------------------------------------------------------------------
5. Transaction of such other business as may properly be brought before the
meeting or any adjournments thereof.
----------------------------------------------------------------------------
----------------------------------------------------------------------------
IF NO CONTRARY INSTRUCTION IS GIVEN, THIS PROXY WILL BE VOTED FOR ITEMS 1, 2
AND 3; AND AGAINST ITEM 4.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ELECTION OF DIRECTORS AND
FOR APPROVAL OF ITEMS 2 AND 3.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST ITEM 4.
P (continued on reverse side)
R
<PAGE> 46
I PLAN TO ATTEND MEETING [ ]
Your vote is important. If you own shares which are entitled to four
votes per share, you must indicate this below in the space provided,
or it will be assumed that your shares will be entitled to one vote
each. Please provide the total number of one-vote shares, the total
number of four-vote shares and the total number of votes in the
spaces below.
Dated
-----------------------------------,
1998
Signature
-----------------------------------
Signature
-----------------------------------
<TABLE>
<S> <C> <C> <C>
TOTAL One-Vote Shares --------------- x1 ---------------
TOTAL Four-Vote Shares x4
--------------- ---------------
TOTAL NUMBER OF VOTES
---------------------------------------------------------------
</TABLE>
Please sign exactly as name appears
hereon. Where shares are held
jointly, each holder should sign.
Executors, administrators, trustees
and others signing in a
representative capacity should so
indicate. If a signer is a
corporation, please sign the full
corporate name by an authorized
officer.
PLEASE SIGN AND RETURN PROMPTLY IN THE ENCLOSED POSTAGE-PAID ENVELOPE.
