SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
WARNER-LAMBERT COMPANY
.................................................................
(Name of Registrant as Specified In Its Charter)
.................................................................
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[ ] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1),
14a-6(i)(2) or Item 22(a)(2) of Schedule 14A.
[ ] $500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(4) and 0-11.
1) Title of each class of securities to which transaction
applies:
.................................................................
2) Aggregate number of securities to which transaction
applies:
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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):
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4) Proposed maximum aggregate value of transaction:
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5) Total fee paid:
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[X] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:
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4) Date Filed:
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NOTICE OF ANNUAL
MEETING AND PROXY
STATEMENT
-----------------
1996
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Notice of Annual Meeting of Stockholders 201 Tabor Road
April 23, 1996 Morris Plains
New Jersey 07950
The Annual Meeting of Stockholders of Warner-Lambert Company
('Warner-Lambert') will be held at the Parsippany Hilton Hotel, One Hilton
Court, Parsippany, New Jersey on Tuesday, April 23, 1996, at 10:30 a.m., Eastern
Daylight Saving Time, for the following purposes:
1 to elect a Board of thirteen directors of Warner-Lambert to hold office for
the ensuing year;
2 to approve the Warner-Lambert Company 1996 Stock Plan, as set forth in Exhibit
A to the Proxy Statement;
3 to approve the appointment of independent accountants for 1996;
4 to approve the adoption of an amendment to the Restated Certificate of
Incorporation to increase the authorized Common Stock from 300,000,000 shares
to 500,000,000 shares; and
5 to transact such other business as may properly come before the meeting or any
adjournment or adjournments thereof.
The Board of Directors of Warner-Lambert has fixed the close of business on
February 22, 1996 as the record date for the determination of stockholders
entitled to receive notice of and to vote at the meeting. A list of the
stockholders entitled to vote will be open to the examination of stockholders at
Warner-Lambert Company, 35 Waterview Boulevard, Parsippany, New Jersey during
ordinary business hours from April 9, 1996 to the date of the meeting.
Whether or not you plan to attend the meeting in person, please vote, sign
and date the enclosed proxy and return it in the enclosed envelope, which
requires no postage if mailed in the United States, as soon as possible in order
that you may be represented at the meeting. If you attend the meeting and wish
to vote in person, your Proxy will not be used.
Admittance Cards are required for attendance at the meeting. If you plan to
attend the meeting, please mark the box provided on the Proxy, and an Admittance
Card will be sent to you. If you do not wish to send the Proxy, you may enclose
your own request in the envelope and receive an Admittance Card.
Warner-Lambert has approximately 41,000 holders of Common Stock, many of
whom own less than 100 shares. To ensure proper representation at the meeting,
it is important, however small your holdings, that you vote, sign, date and
return your Proxy promptly. Prompt return of your Proxy will help to reduce
expenses.
By Order of the Board of Directors
Rae G. Paltiel
Secretary
March 7, 1996
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Proxy Statement for Annual Meeting of Stockholders of 201 Tabor Road
Warner-Lambert Company Morris Plains
New Jersey 07950
This Proxy Statement is furnished in connection with the solicitation by the
Board of Directors of Warner-Lambert Company ('Warner-Lambert' or the 'Company')
of Proxies to be voted at the Annual Meeting of Stockholders to be held on
Tuesday, April 23, 1996, and any adjournment or adjournments thereof, for the
purposes set forth in the accompanying Notice of Meeting. The mailing of this
Proxy Statement and accompanying form of Proxy to stockholders will commence on
March 7, 1996.
General
The Board of Directors knows of no business which will be presented to the
meeting other than the matters referred to in the accompanying Notice of
Meeting. However, if any other matters are properly presented to the meeting, it
is intended that the persons named in the Proxy will vote the same and act in
accordance with their judgment. Shares represented by properly executed Proxies
received on behalf of Warner-Lambert will be voted at the meeting in the manner
specified therein. If no instructions are specified in a signed Proxy returned
to Warner-Lambert, the shares represented thereby will be voted in favor of the
election of the directors listed in the enclosed Proxy, in favor of the
Warner-Lambert Company 1996 Stock Plan, as set forth in Exhibit A to this Proxy
Statement, in favor of the appointment of Price Waterhouse LLP as independent
accountants for 1996 and in favor of the adoption of an amendment to the
Restated Certificate of Incorporation to increase the authorized shares of
Common Stock. Any Proxy may be revoked by the person giving it at any time prior
to being voted.
Only holders of Common Stock, $1 par value, whose names appear of record on
the books of Warner-Lambert at the close of business on February 22, 1996, are
entitled to vote at the meeting. At the close of business on that date there
were 135,704,221 shares of Common Stock outstanding. Each share of Common Stock
is entitled to one vote on each matter to be presented at the meeting.
For purposes of determining the number of votes cast on any matter, only
those cast for or withheld from a nominee for director or those cast for or
against the other matters to be voted upon are included. Abstentions and broker
non-votes are counted only for purposes of determining whether a quorum is
present.
Election of Directors
Pursuant to authority contained in the By-Laws, the Board of Directors has
established the number of directors to be elected at the 1996 Annual Meeting of
Stockholders at thirteen. Accordingly, a slate of thirteen directors, consisting
of the persons named below, is to be elected at the meeting to serve for the
ensuing year. Each nominee is a director at the present time. No nominee for
director is related to any other nominee or officer of Warner-Lambert or its
subsidiaries or other affiliates. All nominees were recommended to the
stockholders for election at the Annual Meeting by the Board of Directors at its
January meeting, based upon a prior recommendation to the Board by the
Nominating and Organization Committee. Each nominee will be elected a director
by a majority of the votes cast for such nominee.
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Nominees for Election as Directors
[PHOTO OF ROBERT N. BURT]
ROBERT N. BURT
Age 58 First Elected Director: 1995
Chairman of the Board and Chief Executive Officer, FMC
Corporation
(Chemical and machinery manufacturing)
Mr. Burt was elected to the Board of Directors, effective
September 1, 1995. Mr. Burt joined FMC Corporation in
1973. After holding various positions in the agricultural
division, he was elected Vice President in 1978. He served
as General Manager of FMC's Defense Systems Group from
1983 to 1988 when he was named Executive Vice President.
He served as President of FMC from 1990 to 1993 and was
appointed Chairman of the Board and Chief Executive
Officer in 1991. Mr. Burt has served on FMC's Board of
Directors since 1989. Mr. Burt received a B.S. degree in
chemical engineering from Princeton University and an
M.B.A. from Harvard Business School. He is a director of
Phelps Dodge Corporation, the World Resources Institute,
the Rehabilitation Institute of Chicago and the Economic
Club of Chicago. Mr. Burt is a member of the Business
Roundtable's Policy and Planning Committee, the Illinois
Business Roundtable and the Defense Policy Advisory
Committee on Trade and Vice Chairman and Trustee of the
Chicago Symphony Orchestra.
[PHOTO OF DONALD C. CLARK]
DONALD C. CLARK
Age 64 First Elected Director: 1984
Chairman of the Board of Household International, Inc.
(Financial services)
Mr. Clark joined Household International, Inc. in 1955 and
held various executive positions before serving as
President from 1977 to January, 1988, and Chief Executive
Officer from 1982 to September, 1994. Mr. Clark has served
as Chairman of the Board of Household International since
1984. Mr. Clark received a degree in business
administration from Clarkson University and an M.B.A. from
Northwestern University. He is a director of Household
International, Inc., Ameritech Corporation, Scotsman
Industries Inc. and Ripplewood Holdings L.L.C. He is also
a director of the Chicago Council on Foreign Relations,
the Lyric Opera and the Evanston Hospital Board. Mr. Clark
is a member of the Mid America Club, The
Conference Board, The Business Roundtable and the Economic
Club of Chicago. He also serves as National Trustee of
Northwestern University and as a Trustee of Clarkson
University.
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[PHOTO OF LODEWIJK J. R. DE VINK]
LODEWIJK J. R. DE VINK
Age 51 First Elected Director: 1991
President and Chief Operating Officer of Warner-Lambert
Mr. de Vink joined Warner-Lambert in 1988 as Vice
President and President, International Operations. In
April, 1990 he was appointed Executive Vice President and
President, U.S. Operations, and in August, 1991 he was
elected to his present position as President and Chief
Operating Officer. Previously, he was employed by
Schering-Plough Corporation in various management and
executive positions, advancing to Senior Vice President,
Schering International, in 1984 and President, Schering
International, in 1986. Mr. de Vink graduated from
Nijenrode, The Netherlands School of Business. He holds a
B.B.A. from Washburn University and an M.B.A. from
American University. Mr. de Vink is a director of NYNEX
Corporation and the United Negro College Fund. He is also
Chairman and a director of the Board of Pharmaceutical
Research and Manufacturers of America. Mr. de Vink is a
director of the National Actors' Theater, Friends of
Hassenfeld and Morristown Memorial Hospital. He also
serves as a Trustee of the National Foundation for
Infectious Diseases.
[PHOTO OF JOHN A. GEORGES]
JOHN A. GEORGES
Age 65 First Elected Director: 1983
Chairman of the Board and Chief Executive Officer of
International Paper (Packaging, paper and forest products)
Mr. Georges joined International Paper in 1979 as
Executive Vice President. He was named Vice Chairman in
1980, President and Chief Operating Officer in 1981,
President and Chief Executive Officer in 1984, and
Chairman of the Board and Chief Executive Officer in 1985.
Mr. Georges received a B.S. in chemical engineering from
the University of Illinois and holds an M.S. in business
administration from Drexel University. Mr. Georges is a
director of International Paper, AK Steel Corporation,
Ryder System, Inc. and Scitex Corporation. He is a Board
member of and Trustee of the Public Policy Institute of
The Business Council of New York State, a member of The
Business Council, The Business Roundtable and the
Trilateral Commission and is President and a member of the
Board of the University of Illinois Foundation. Mr.
Georges is also a Trustee of Drexel University and a
member of the Advisory Committee for Trade Policy and
Negotiations.
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[PHOTO OF MELVIN R. GOODES]
MELVIN R. GOODES
Age 60 First Elected Director: 1985
Chairman of the Board and Chief Executive Officer of
Warner-Lambert
Mr. Goodes joined Warner-Lambert in 1965 and held various
managerial and executive positions, serving as President,
Warner-Lambert Mexico from 1970 to 1976, President,
Pan-American Zone, from 1976 to 1977, President,
Pan-American/Asian Zone, from 1977 to 1979 and President,
Consumer Products Division, from 1979 to 1983. Mr. Goodes
was elected Vice President in 1977, Senior Vice President
in 1980, Executive Vice President and President, U.S.
Operations, in 1984 and President and Chief Operating
Officer in 1985. In August, 1991, he was elected to his
current position as Chairman of the Board and Chief
Executive Officer. Mr. Goodes is a graduate of Queen's
University, Kingston, Ontario, Canada, of which he is
currently a Trustee, and received an M.B.A. from the
University of Chicago. He is a director of Ameritech
Corporation, Chemical Bank, Chemical Banking Corporation
and Unisys Corporation. He is also a director of the
International Executive Service Corps and the New Jersey
Performing Arts Center. Mr. Goodes is a member of the
Industry Policy Advisory Committee, The Conference Board,
the Advisory Board of the American Paralysis Association
and the University of Chicago Advisory Council of the
Graduate School of Business. He is a director and a member
of the Executive Committee of the National Council on
Economic Education and a Trustee of the University of
Chicago Council of the Division of Biological Sciences.
[PHOTO OF WILLIAM H. GRAY III]
WILLIAM H. GRAY III
Age 54 First Elected Director: 1991
President and Chief Executive Officer of the United Negro
College Fund
Mr. Gray was appointed President and Chief Executive
Officer of the United Negro College Fund in September,
1991. He has also served as the Senior Minister of the
Bright Hope Baptist Church since 1963. From 1968 through
1972, Mr. Gray was a lecturer at Jersey City State
College, Rutgers University and Montclair State College.
He was an Assistant Professor and a director of St.
Peter's College from 1970 to 1974. Mr. Gray served as a
Congressman from the Second District of Pennsylvania from
1979 to 1991. During his tenure, he was Chairman of the
House Budget Committee, a member of the Appropriations
Committee, Chairman of the House Democratic Caucus and
Majority Whip. Mr. Gray received a B.A. from Franklin and
Marshall College, a Master of Theology from Drew
Theological Seminary and a Master of Theology from
Princeton Theological Seminary. He is a director of Chase
Manhattan Corporation, Municipal Bond Investors Assurance
Corporation, The Prudential Insurance Company of America,
Rockwell International Corp., Union Pacific Corporation
and Westinghouse Electric Corporation.
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[PHOTO OF WILLIAM R. HOWELL]
WILLIAM R. HOWELL
Age 60 First Elected Director: 1983
Chairman of the Board of J.C. Penney Company, Inc.
(Retailing)
Mr. Howell joined J.C. Penney Company, Inc. in 1958. After
holding various management positions, he became Western
Regional Vice President in 1976 and a Senior Vice
President and Director of Merchandising and Marketing in
1979. Mr. Howell was elected Executive Vice President and
Board member in 1981, Vice Chairman of the Board in 1982
and Chief Executive Officer in 1983. Mr. Howell has served
as Chairman of the Board of J.C. Penney since 1983. Mr.
Howell holds a degree in business management from the
University of Oklahoma. Mr. Howell is a director of J.C.
Penney Company, Inc., Bankers Trust New York Corporation,
Bankers Trust Company, Exxon Corporation and Halliburton
Company. He is Chairman-Elect of the Southern Methodist
University's Board of Trustees, a Trustee of the National
Urban League and a member of the Board of Governors of
United Way of America and The Business Council.
[PHOTO OF LASALLE D. LEFFALL, JR., M.D.]
LASALLE D. LEFFALL, JR., M.D.
Age 65 First Elected Director: 1988
Charles R. Drew Professor and Chairman, Department of
Surgery,
Howard University College of Medicine; Professorial
Lecturer in Surgery, Georgetown University
Dr. Leffall has served as Professor and Chairman of the
Department of Surgery at Howard University College of
Medicine since 1970. In March, 1992, he was named the
Charles R. Drew Professor of Surgery. He is also a
Professorial Lecturer in Surgery at Georgetown University.
He received a B.S. from Florida A&M and an M.D. from
Howard University. Dr. Leffall is a director of Mutual of
America and Tyco Toys, Inc. He is President of the
American College of Surgeons, a consultant to the National
Cancer Institute, a Diplomate of the American Board of
Surgery and a Fellow of the American College of
Gastroenterology. Dr. Leffall is also a member of the
National Urban League, the National Association for
Advancement of Colored People, the Young Men's Christian
Association, Cosmos Club and Greater Washington Research
Center.
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[PHOTO OF PATRICIA SHONTZ LONGE, Ph.D.]
PATRICIA SHONTZ LONGE, Ph.D.
Age 62 First Elected Director: 1975
Economist; Senior Partner of The Longe Company
(Economic consulting and investments)
Dr. Longe received a B.S. and an M.B.A. from the
University of Detroit and a Ph.D. in economics from Wayne
State University. Dr. Longe has been an economist since
1963. She served as Professor of Business Administration
at the University of Michigan from 1973 to 1986 and as
Adjunct Professor of Business Administration from 1986 to
1988. Dr. Longe has been a Senior Partner of The Longe
Company, an economic consulting and investment firm, since
1981. She is a director of Comerica Incorporated, Comerica
Bank & Trust, F.S.B., The Detroit Edison Company, Jacobson
Stores, Inc., The Kroger Co. and The Immokalee Foundation,
Inc.
[PHOTO OF ALEX J. MANDL]
ALEX J. MANDL
Age 51 First Elected Director: 1995
President and Chief Operating Officer, AT&T Corp.
(Telecommunications)
Mr. Mandl was elected to the Board of Directors, effective
June 1, 1995. Mr. Mandl joined AT&T Corp. in 1991 as Chief
Financial Officer. In 1993 he was elected Executive Vice
President -- AT&T and Chief Executive Officer of the
Communications Services Group. In January, 1996, Mr. Mandl
was elected President and Chief Operating Officer of AT&T.
Prior to joining AT&T, Mr. Mandl was Chairman of the Board
and Chief Executive Officer of Sea-Land Service, Inc.,
which position he held from 1988 to 1991. From 1980 to
1988, Mr. Mandl held various executive positions with
Seaboard Coast Line Industries. He is a director of AT&T
Universal Card Services, Walter A. Haas School of Business
at the University of California at Berkeley, Willamette
University, Carnegie Hall and the Museum of Television and
Radio. Mr. Mandl is also a member of the Global Business
Management Council, Young Presidents' Organization
(alumnus), the American Enterprise Institute for Public
Policy Research and the Management Policy Council
(alumnus).
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[PHOTO OF LAWRENCE G. RAWL]
LAWRENCE G. RAWL
Age 67 First Elected Director: 1986
Retired Chairman of the Board and Chief Executive Officer
of Exxon Corporation (Crude oil, natural gas and petroleum
products)
Mr. Rawl joined Exxon Corporation in 1952 and held various
positions in domestic operations and corporate
headquarters activities. In 1973, he became Senior Vice
President of Exxon Company, U.S.A. and in 1976, he became
Executive Vice President. He was elected Executive Vice
President of Esso Europe Inc. in 1978, Senior Vice
President of Exxon Corporation in 1980, President in 1985
and Chairman of the Board and Chief Executive Officer in
1987, which position he held until his retirement in 1993.
Mr. Rawl received a B.S. in petroleum engineering from the
University of Oklahoma. He is a director of Champion
International Corporation, Texas Commerce Bancshares, Inc.
and the Texas Medical Center.
[PHOTO OF MICHAEL I. SOVERN]
MICHAEL I. SOVERN
Age 64 First Elected Director: 1993
President Emeritus and Chancellor Kent Professor of Law,
Columbia University
Mr. Sovern joined the faculty of Columbia University in
1957, became a full professor in 1960 and has been
Chancellor Kent Professor of Law since 1977. He served as
Columbia Law School's seventh Dean from 1970 to 1979 and
as Executive Vice President and Provost of the University
from 1979 to 1980. Mr. Sovern served as President of
Columbia University from 1980 to 1993, when he became
President Emeritus. He received his A.B. degree from
Columbia College and LL.B. from Columbia University Law
School. Mr. Sovern is a director of AT&T Corp., Chemical
Bank, Chemical Banking Corporation and the Greater New
York Insurance Group. He is also Chairman of the Japan
Society and of the American Academy in Rome, and serves on
the boards of the Asian Cultural Council, the Schubert
Foundation and Organization, Channel Thirteen, the NAACP
Legal Defense and Education Fund and the Henry J. Kaiser
Family Foundation. Mr. Sovern is also an advisor to the
Board of Sequa Corporation.
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[PHOTO OF JOSEPH D. WILLIAMS]
JOSEPH D. WILLIAMS
Age 69 First Elected Director: 1973
Consultant; Retired Chairman of the Board and Chief
Executive Officer of Warner-Lambert
Mr. Williams joined Parke, Davis & Company in 1950 and
served in various sales, marketing and executive positions
before becoming President and Chief Executive Officer of
Parke, Davis in 1973. In 1976, he was elected Executive
Vice President and President, Pharmaceutical Group, of
Warner-Lambert. Mr. Williams was elected President of
Warner-Lambert in 1979, Chief Operating Officer in 1980
and Chairman of the Board and Chief Executive Officer in
1985, which position he retained until his retirement in
1991. Mr. Williams holds a B.S. in chemistry and pharmacy
from the University of Nebraska College of Pharmacy. He is
a director of AT&T Corp., Exxon Corporation, J.C. Penney
Company, Inc. and Thrift Drug, Inc. Mr. Williams is also a
director of Rockefeller Financial Services, Inc.,
Rockefeller Company, Inc., Therapeutic Antibodies Inc.,
Project Hope and the United Negro College Fund. He is also
Chairman of the New Jersey Commission on Higher Education,
a Trustee of the Liberty Science Center and Trustee
Emeritus of Columbia University.
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Security Ownership of Officers and Directors
The following table sets forth information, as of February 9, 1996, regarding
beneficial ownership of Warner-Lambert Common Stock by each director and
nominee, each of the executive officers named in the Summary Compensation Table
and all directors and executive officers as a group:
Number of Common
Shares and
Name Share Equivalents(1), (2)
------ -------------------------
B. Charles Ames
(Retiring 4/96) 32,541
Robert N. Burt 2,178
Donald C. Clark 19,838
Lodewijk J. R. de Vink 181,022(3)
John A. Georges 5,888
Melvin R. Goodes 245,030(3)
William H. Gray III 3,864
William R. Howell 3,487
Ernest J. Larini 54,493(3)
J. Frank Lazo 100,581(3)
LaSalle D. Leffall, Jr. 7,023
Patricia Shontz Longe 6,705
Alex J. Mandl 2,278
Lawrence G. Rawl 19,179
Michael I. Sovern 2,178
John F. Walsh 124,945(3)
Joseph D. Williams 23,011
All executive officers and directors as a group (32) 1,605,445(3)
- ------------------------------------------------------------------------------------------------
(1) As of February 9, 1996, all executive officers and directors as a group
owned approximately 1.18% of the outstanding shares of Common Stock.
(2) Each of the above persons has (or will have upon the exercise of options
exercisable within sixty days) sole voting and investment power with respect to
all shares shown as beneficially owned by such person, except for an aggregate
of 24,000 shares granted to the non-employee directors named above, pursuant to
the Restricted Stock Plan for Directors of Warner-Lambert Company, as to which
each director has the power to direct the vote of the shares granted to such
person. The shareholdings listed above also include shares of Common Stock
equivalents held pursuant to Warner-Lambert's deferred compensation arrangements
for non-employee directors, as follows: Mr. Ames (who, in accordance with
Warner-Lambert's By-Laws, will retire from the Board in April, 1996) 20,041, Mr.
Burt 178, Mr. Clark 15,464, Mr. Georges 1,888, Mr. Gray 1,691, Mr. Howell 1,287,
Dr. Leffall 4,633, Dr. Longe 1,705, Mr. Mandl 278, Mr. Rawl 12,992 and Mr.
Sovern 178. The shareholdings listed above for Mr. de Vink, Mr. Goodes, Mr.
Larini, Mr. Lazo and Mr. Walsh include shares of Common Stock and Common Stock
equivalents in the amounts of 322, 88,317, 2,619, 470 and 3,784, respectively,
held pursuant to Warner-Lambert's benefit plans.
(3) Includes shares subject to options or rights granted pursuant to the
Company's stock plans exercisable within sixty days after February 9, 1996, held
by Mr. deVink, Mr. Goodes, Mr. Larini, Mr. Lazo, Mr. Walsh and all executive
officers and directors as a group, in the amounts of 174,569 shares, 138,770
shares, 50,026 shares, 99,575 shares, 110,062 shares and 1,282,478 shares,
respectively.
Warner-Lambert believes that stock ownership by its executive officers is
important to promote an identification of the interests of Management with
Warner-Lambert's stockholders. Accordingly, the Compensation Committee has
established stock ownership goals for key members of Management with the intent
that each individual invest a certain dollar amount in shares of Warner-Lambert
Common Stock equal to a multiple (by position level) of the salary for such
individual. For purposes of this program, the amount of shares of Common Stock
held by the officer includes shares held directly and indirectly, shares and
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share equivalents held under Warner-Lambert's benefit plans, 50% of vested,
unexercised stock options and 50% of restricted stock.
Section 16(a) of the Securities Exchange Act of 1934 requires
Warner-Lambert's officers and directors, and persons who own more than ten
percent of a registered class of Warner-Lambert's equity securities, to file
reports of ownership and changes in ownership with the Securities and Exchange
Commission and the New York Stock Exchange. Warner-Lambert believes that during
1995 all Section 16(a) filing requirements applicable to its officers and
directors were complied with, except that the transfer of 200 shares of Common
Stock from the account of Mr. William R. Howell, a director of Warner-Lambert,
which was exempt from Section 16(b), was reported in a late Form 4 due to an
administrative error.
Security Ownership of Warner-Lambert
The following table sets forth information with respect to the persons known to
Warner-Lambert to own beneficially more than 5% of Warner-Lambert's Common
Stock, as of December 31, 1995:
Amount and
Nature of
Name and Address of Beneficial Percent
Beneficial Owner Ownership of Class
- ------------------------------------------------------------------------------------------------------------------
The Capital Group Companies, Inc.
333 South Hope Street
Los Angeles, California 90071 7,372,900 (1) 5.5%
- ------------------------------------------------------------------------------------------------------------------
(1) As reported in Amendment No. 2 to Schedule 13G filed with the Securities and
Exchange Commission (the 'SEC') by The Capital Group Companies, Inc. ('CG'),
Capital Guardian Trust Company and Capital Research and Management Company,
operating subsidiaries of CG, exercised, as of December 31, 1995, investment
discretion with respect to 800 and 7,372,100 shares, respectively. CG has
advised that with respect to all of such shares, its subsidiaries act as
investment managers for various institutional investors and that it disclaims
beneficial interest in such shares.
Committees of the Board
Warner-Lambert has an Executive Committee, an Audit Committee, a Compensation
Committee, a Nominating and Organization Committee, a Retirement and Savings
Plan Committee (U.S.) and a Corporate Public Policy Committee of the Board of
Directors. The members of the Executive Committee are Mr. Joseph D. Williams
(Chairman), Mr. Lodewijk J. R. de Vink, Mr. John A. Georges, Mr. Melvin R.
Goodes, Dr. Patricia Shontz Longe and Mr. Lawrence G. Rawl. This Committee,
which did not meet during 1995, has the authority to exercise all of the powers
of the Board of Directors except that this Committee may not (1) approve
acquisitions, capital expenditure requests or divestitures involving more than
$20,000,000, (2) amend Warner-Lambert's Certificate of Incorporation or By-Laws,
(3) declare a dividend or (4) authorize the issuance of stock of Warner-Lambert.
The Executive Committee also has the authority to review Warner-Lambert's
financial policies and procedures and make recommendations to the Board of
Directors with respect to dividend policy, corporate financing and related
matters.
The members of the Audit Committee are Mr. B. Charles Ames (Chairman), Mr.
John A. Georges, Mr. William H. Gray III, Mr. Lawrence G. Rawl, Mr. Michael I.
Sovern and Mr. Alex J. Mandl. This Committee, which met four times during 1995,
is responsible generally for recommending to the Board of Directors the
independent accountants to be nominated to audit the financial statements of
Warner-Lambert; approving the discharge and compensation
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of the independent accountants; meeting with Warner-Lambert's independent
accountants to review the proposed scope of the annual audit of Warner-Lambert's
financial statements; reviewing the findings of the independent accountants with
respect to the annual audit; and supervising the implementation of
Warner-Lambert's management integrity policies and reporting annually to the
Board of Directors with respect thereto.
The members of the Compensation Committee are Mr. Donald C. Clark
(Chairman), Mr. John A. Georges, Mr. William R. Howell and Mr. Lawrence G. Rawl.
This Committee, which met five times during 1995, is responsible for
administering the Warner-Lambert Incentive Compensation Plan, the Warner-Lambert
Supplemental Pension Income Plan and Warner-Lambert's stock plans, and has
limited authority to adopt amendments to the foregoing plans. This Committee is
also responsible for recommending to the Board of Directors the salaries to be
paid to the Chief Executive Officer and the President of Warner-Lambert, and
reviewing and approving the Chief Executive Officer's and the President's other
annual cash compensation and long-term incentives and the total compensation to
be paid to certain other officers of Warner-Lambert. In addition, this Committee
will be responsible for administering the Warner-Lambert Company 1996 Stock Plan
if it is approved by the stockholders at the Annual Meeting of Stockholders.
(See the summary of the 1996 Stock Plan beginning on page 28.)
The members of the Nominating and Organization Committee are Dr. LaSalle D.
Leffall, Jr. (Chairman), Mr. B. Charles Ames, Mr. Donald C. Clark, Mr. William
H. Gray III and Mr. Joseph D. Williams. This Committee, which met four times in
1995, is responsible for recommending to the Board of Directors the names of
qualified persons to be nominated for election or re-election as directors of
Warner-Lambert, the membership and Chairman of each Board Committee and the
persons to be elected or re-elected Chairman of the Board, Chief Executive
Officer, President and Chief Operating Officer of Warner-Lambert. The Committee
will consider suggestions for Board membership submitted by stockholders in
accordance with the notice provisions and procedures set forth in
Warner-Lambert's By-Laws. Proposals for the nomination of directors must include
the biographical information required by Warner-Lambert's By-Laws, together with
the written consent of the proposed nominee to so serve, if elected. This
Committee is also responsible for administering the Restricted Stock Plan for
Directors of Warner-Lambert Company. Mr. Williams does not act upon any matters
for which he would not qualify as a 'disinterested person' as defined under Rule
16b-3 promulgated pursuant to Section 16 of the Securities Exchange Act of 1934.
The members of the Retirement and Savings Plan Committee (U.S.) are Dr.
Patricia Shontz Longe (Chairman), Mr. Donald C. Clark, Mr. John A. Georges, Mr.
William R. Howell and Mr. Michael I. Sovern. This Committee, which met three
times during 1995, has limited authority to adopt amendments to the domestic
retirement and savings plans of Warner-Lambert and its domestic subsidiaries
(collectively, the 'Plans'), including the Warner-Lambert Retirement Plan, the
Warner-Lambert Savings and Stock Plan, the Warner-Lambert Excess Savings Plan
and the Warner-Lambert Long Term Disability Benefits Plan, and has
responsibility with respect to such Plans to monitor and report on the selection
and termination of trustees and investment managers and on their individual
investment activity and performance, to review the reports of the independent
accountants with respect to the Plans, to approve pensions for individual
employees which are separate from any benefit plan and to implement the overall
asset allocation guidelines, as established by the Board of Directors.
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The members of the Corporate Public Policy Committee are Mr. William R.
Howell (Chairman), Mr. Robert N. Burt, Mr. Donald C. Clark, Dr. LaSalle D.
Leffall, Jr., Dr. Patricia Shontz Longe and Mr. Joseph D. Williams. This
Committee, which met three times in 1995, is responsible for reviewing periodic
reports on the contribution activities of Warner-Lambert, reports on equal
employment opportunity and related matters and reports on public affairs
programs of Warner-Lambert and issues of social concern, and for making
recommendations to the Board of Directors in such areas.
The Warner-Lambert Board of Directors met eleven times during 1995. Each
director of Warner-Lambert standing for re-election who was a director during
1995 attended at least 89% of the total meetings of the Board of Directors and
the Committees of the Board on which he or she served. The average attendance
rate for 1995 for all directors standing for re-election was approximately 97%.
Directors' Compensation
All non-employee directors of Warner-Lambert receive an annual fee of $35,000
and a fee of $1,000 for attendance at each meeting of the Board or Committee of
the Board of Directors, as well as for attendance at or participation in special
meetings and other Board-related activities, and are reimbursed for expenses
incurred in connection therewith. In addition, each member of the Executive
Committee who is not an employee receives an annual fee of $4,000 in lieu of a
fee for attendance at the first four meetings of the Executive Committee.
Directors may elect to defer receipt of their fees.
Warner-Lambert has a consulting agreement with Mr. Joseph D. Williams to
provide services to Warner-Lambert in specialized fields. For 1995, amounts paid
to or deferred for the benefit of Mr. Williams, pursuant to such consulting
arrangement, was $200,000.
The Warner-Lambert Directors' Retirement Plan was amended effective January
1, 1996. With respect to directors who have at least five years of Board
membership, no additional benefits will be accrued under the Plan and, in order
to better align the interests of the directors with the Company's stockholders,
the present value of the pension benefits which were earned prior to the
amendments have been credited as shares to each director's Warner-Lambert Common
Stock equivalent account under the provisions of the Warner-Lambert Company 1992
Stock Plan (the '1992 Stock Plan'), as follows: Mr. B. Charles Ames 2,852, Mr.
Donald C. Clark 1,512, Mr. John A. Georges 1,705, Mr. William H. Gray III 365,
Mr. William R. Howell 1,106, Dr. LaSalle D. Leffall, Jr. 1,451, Dr. Patricia
Shontz Longe 1,522, and Mr. Lawrence G. Rawl 1,959. Mr. Michael I. Sovern will
continue to accrue pension credit until he has completed five years of Board
membership at which time the present value of his accrued pension as of January
1, 1996 will be credited to his Warner-Lambert Common Stock equivalent account
and future pension accruals will cease. With respect to directors who are
initially elected to the Board after May 31, 1995, pension benefits in the
Directors' Retirement Plan will not be provided.
Effective January 1, 1996, in order to further align the interests of the
directors with the Company's stockholders and in lieu of future pension
benefits, an amount equal to one-half of the retainer in effect on January 1 of
each year, for a maximum period of ten years, will be made available to the
directors for crediting to their Warner-Lambert Common Stock equivalent
accounts. Directors may not withdraw these amounts from their deferred accounts
until they are no longer members of the Board.
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The provisions of the 1992 Stock Plan relating to deferred compensation for
directors permit non-employee directors to elect to defer their directors'
annual fees, meeting attendance fees and consulting fees, and such deferred
amounts are credited to an account which accrues interest annually or to a
Warner-Lambert Common Stock equivalent account which is credited as of the day
the deferred fees would have been payable with stock credits equal to the number
of shares of Common Stock that could have been purchased with the amount of such
deferred fees. The provisions of the 1992 Stock Plan relating to directors'
deferred compensation provide that all amounts which participating directors had
previously elected to defer are payable immediately following a change in
control of Warner-Lambert (as defined in such plan).
Pursuant to the Restricted Stock Plan for Directors of Warner-Lambert
Company, each non-employee director of Warner-Lambert receives a grant of 2,000
shares of Common Stock, subject to certain restrictions. The director is not
entitled to delivery of the share certificate and the shares are subject to
transfer restrictions for a period from the date of grant until the earliest to
occur of certain specified events. If the director remains a member of the Board
for the entire period during which the restrictions apply, the restrictions will
lapse with respect to one-tenth of the shares of Common Stock for each full year
of service as a director. In the event of a change in control of Warner-Lambert
(as defined in such plan), the Restricted Stock Plan provides that the directors
will receive the full value of the shares previously granted by delivery of a
cash payment in lieu thereof. Subject to the foregoing, the director has the
rights and privileges of a stockholder as to such Common Stock, including the
right to receive dividends and the right to vote the shares of Common Stock.
Non-employee directors are also eligible to participate in Warner-Lambert's
Group Life Insurance, Medical, Dental and Accidental Death and Dismemberment
Plans.
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Summary Compensation Table
The following table provides a summary of cash and non-cash compensation for
each of the last three completed fiscal years ended December 31, 1995, 1994 and
1993 with respect to Warner-Lambert's Chief Executive Officer and the other four
most highly compensated executive officers of the Company:
Summary Compensation Table
Long - Term Compensation
--------------------------------------
Annual Compensation Awards Payouts
------------------------------ ---------------------- --------------
a b c d e f g h i
- -------------------------------------------------------------------------------------------------------------------------
Securities
Restricted Underlying
Other Annual Stock Options/ LTIP All Other
Name and Principal Salary Bonus Compensation Awards(1) SARs Payouts(2) Compensation(3)
Position Year ($) ($) ($) ($) (#) ($) ($)
- -------------------------------------------------------------------------------------------------------------------------
Melvin R. Goodes
Chairman of the Board 1995 $943,333 $778,300 -- -- 75,000 $169,994 $ 177,846
and Chief Executive 1994 866,250 820,000 -- -- 45,000 176,375 58,493
Officer 1993 820,000 586,000 -- -- 45,000 255,000 49,453
Lodewijk J. R. de Vink(4) 1995 620,917 511,000 -- -- 45,000 131,359 58,865
President and Chief 1994 573,500 543,000 -- -- 26,750 124,500 17,866
Operating Officer 1993 542,667 413,000 -- -- 26,750 150,000 10,805
J. Frank Lazo(5)
Vice President; 1995 379,167 284,000 -- -- 21,600 61,816 41,934
President, Confectionery 1994 289,150 180,000 -- -- 15,900 83,000 12,838
Sector 1993 267,650 161,300 -- -- 14,450 60,000 14,047
John F. Walsh(6)
Executive Vice
President; President, 1995 418,333 214,000 -- -- 16,000 92,724 84,319
Consumer Healthcare 1994 398,333 320,000 -- -- 21,100 103,750 20,180
Sector 1993 377,500 320,000 -- -- 19,250 120,000 24,646
Ernest J. Larini 1995 323,217 251,000 -- -- 20,000 46,362 35,152
Vice President and Chief 1994 300,967 243,000 -- -- 17,500 51,875 10,380
Financial Officer 1993 278,400 197,000 -- -- 15,500 60,000 9,951
- -------------------------------------------------------------------------------------------------------------------------
(1) Aggregate restricted stock holdings as of December 31, 1995, valued at the
market price at year end, were as follows: Mr. Lazo 536 shares with a value of
$51,557. Dividends on restricted shares are paid quarterly in conjunction with,
and at the same rate as, dividends on the Company's Common Stock.
(2) Long-term cash performance bonuses provide for cash dollar awards contingent
on the attainment of certain earnings per share ('EPS') performance levels
during the three-year period subsequent to the grant. The amounts shown in
column (h) above represent the long-term bonuses paid in 1995, 1994 and 1993,
respectively, to the executive officers named in the Summary Compensation Table
for each of the three-year performance periods ending prior to such years. As a
result of amendments made to the long-term bonus program in 1994, the long-term
bonuses for the three-year performance period ended December 31, 1994 and paid
in May, 1995 were payable in part based on Warner-Lambert's achievement of a
specific cumulative average EPS growth for the period and in part based upon
Warner-Lambert's achievement of a certain relative EPS performance level,
compared to the median EPS performance of a select group of companies in the
industries in which Warner-Lambert competes.
(3) All Other Compensation consists of the following: (i) annual Company
contributions to the Savings and Stock Plan and the Excess Savings Plan for
1995, 1994 and 1993, as follows: Mr. Goodes $67,226, $47,760 and $29,266; Mr. de
Vink $19,293, $14,849 and $7,255; Mr. Lazo $14,418, $10,157 and $9,358; Mr.
Walsh $17,992, $13,280 and $11,232; and Mr. Larini $10,154, $8,123 and $6,289,
respectively; and (ii) the above-market interest on deferred annual bonuses for
1995, 1994 and 1993, as follows: Mr. Goodes $110,620, $10,733 and $20,187; Mr.
de Vink $39,572, $3,017 and $3,550; Mr. Lazo $27,516, $2,681 and $4,689; Mr.
Walsh $66,327, $6,900 and $13,414; and Mr. Larini $24,998, $2,257 and $3,662,
respectively. The annual bonus was payable for such years, but deferred at the
election of the named executive officer, in accordance with the provisions of
the Warner-Lambert Incentive Compensation Plan. According to the terms of such
Plan, deferred bonuses accrue interest that is automatically credited to the
officer's account and is not currently paid or payable.
(4) Effective January 1, 1994, Mr. de Vink assumed responsibility for
Warner-Lambert's Pharmaceutical Sector.
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(5) Mr. Lazo served as President, Latin America/Asia/Australia/Middle
East/Africa Group, until December 1, 1994, when he was named President,
Confectionery Sector.
(6) Mr. Walsh served as President, Consumer Products Sector, through November,
1994. Effective December 1, 1994, Mr. Walsh was named President, Consumer
Healthcare Sector.
Chief Executive Officer's and President's Employment Agreements
In 1985, Warner-Lambert entered into an employment agreement with Mr. Goodes. In
1991, Warner-Lambert entered into an employment agreement with Mr. de Vink. The
agreement with Mr. Goodes, which was amended in 1991, terminates May 1, 2000,
and the agreement with Mr. de Vink provides for an initial term of five years,
which term will be automatically extended for an additional year at the end of
each year of the term until Mr. de Vink's retirement. The agreements provide for
minimum annual salaries which may be increased annually based upon the average
salary increase of those officers of Warner-Lambert whose names appear in the
Annual Report. Mr. Goodes' and Mr. de Vink's respective salaries are generally
reviewed by the Compensation Committee in January of each year. Pursuant to the
terms of the agreements, Mr. Goodes and Mr. de Vink are also entitled to
participate in the Incentive Compensation Plan as well as the other compensation
and benefit programs available to officers of Warner-Lambert at their respective
levels.
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Option/SAR Grant Table
The following table sets forth information concerning grants of stock options
and stock appreciation rights during 1995 to the Company's Chief Executive
Officer and the other four most highly compensated executive officers:
Option/SAR Grants in 1995
Individual Grants
------------------------------------------------------------
a b c d e f
- ------------------------------------------------------------------------------------------------------------
Number of % of Total
Securities Options/SARs
Underlying Granted to Exercise or
Options/SARs Employees in Base Price Expiration Grant Date
Name Granted (#)(2) 1995 ($/Sh) Date Present Value(1)
- ------------------------------------------------------------------------------------------------------------
Melvin R. Goodes 75,000 3.67% $ 87.75 10/23/05 $1,710,750
Lodewijk J. R. de Vink 45,000 2.20% 87.75 10/23/05 1,026,450
J. Frank Lazo 21,600 1.06% 87.75 10/23/05 492,696
John F. Walsh 16,000 .78% 87.75 10/23/05 364,960
Ernest J. Larini 20,000 .98% 87.75 10/23/05 456,200
- ------------------------------------------------------------------------------------------------------------
(1) Present value determinations were made using a Black-Scholes option pricing
model based on the following assumptions: expected volatility is based on a
five-year average of weekly stock prices for the period 1991-1995; risk-free
rate of return is based on the current ten-year Treasury note rate; dividend
yield is based on the dividends paid on Warner-Lambert's Common Stock for the
five-year period 1991-1995; and options are held for the full ten-year term. The
actual value an executive officer receives is dependent on future stock market
conditions, and there can be no assurance that the amounts reflected in column
(f) of the Option/SAR Grants Table will actually be realized. No gain to the
executive officer is possible without an appreciation in stock value which will
benefit all stockholders commensurately.
(2) Stock options entitle the holder to purchase shares of Common Stock at a
price which is equal to the fair market value per share for such stock on the
date the stock option was granted. Payment of this price is made in cash or,
with the consent of the Compensation Committee, in whole or in part, in Common
Stock or other consideration. Stock options become exercisable over a four-year
period (beginning one year after the date of grant) in four equal installments.
No stock option may be exercised after the expiration of ten years from the date
of grant. In the event of a change in control of Warner-Lambert (as defined in
the stock option plans), (i) the ability to exercise stock options is
accelerated, (ii) amounts payable upon exercise of stock appreciation rights
will be determined by reference, among other things, to the price pursuant to
which the change in control was effected, (iii) amounts payable upon the
exercise of stock appreciation rights will be in the form of cash and (iv)
limited stock appreciation rights are provided to the grantees of stock options.
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Option/SAR Exercises and Year-End Value Table
The following table sets forth individual exercises of stock options and stock
appreciation rights ('SARs') during 1995 by the Company's Chief Executive
Officer and the other four most highly compensated executive officers and
provides information related to stock option and SAR values:
Aggregated Option/SAR Exercises in 1995 and Year-End Option/SAR Values
a b c d e
- --------------------------------------------------------------------------------------------------
Number of Value of
Securities Unexercised
Underlying In-the-Money
Unexercised Options/SARs
Options/ at Year-End ($)
Shares SARs at ($96.1875 Per
Acquired on Year-End (#) Share)
Exercise Value Exercisable/ Exercisable/
Name (#) Realized ($) Unexercisable Unexercisable
- --------------------------------------------------------------------------------------------------
Melvin R. Goodes 30,000 $1,679,063 204,820/ $ 9,225,334/
314,938 4,872,814
Lodewijk J. R. de Vink 20,000 1,151,499 165,749/ 7,041,850/
196,201 4,007,099
J. Frank Lazo 0 0 78,075/ 2,742,336/
112,075 3,734,817
John F. Walsh 20,000 1,016,786 126,262/ 5,805,455/
109,988 1,824,617
Ernest J. Larini 1,000 58,844 46,626/ 1,531,693/
93,750 1,496,758
- --------------------------------------------------------------------------------------------------
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Long -Term Incentive Plan Awards Table
The following table indicates long-term incentive awards granted in 1995 to the
Company's Chief Executive Officer and the other four most highly compensated
executive officers:
Long-Term Incentive Plan - Awards in 1995(1)
Estimated Future Payouts under
Non-Stock Price Based Plans
------------------------------------------------
a b c d e f g
- --------------------------------------------------------------------------------------------------------------
Performance
Number of or Other
Shares, Period
Units or Until Below
Other Maturation Threshold Threshold Target Maximum
Name Rights (#)(1) or Payout ($) ($) ($) ($)
- --------------------------------------------------------------------------------------------------------------
Melvin R. Goodes $ 723,900 3 Years 0 $361,950 $723,900 $1,447,800
Lodewijk J. R. de Vink $ 443,600 3 Years 0 221,800 443,600 887,200
J. Frank Lazo $ 274,300 3 Years 0 137,150 274,300 548,600
John F. Walsh $ 274,300 3 Years 0 137,150 274,300 548,600
Ernest J. Larini $ 146,700 3 Years 0 73,350 146,700 293,400
- --------------------------------------------------------------------------------------------------------------
(1) The Warner-Lambert Incentive Compensation Plan provides for dollar target
awards, rather than shares, units or other rights. In 1995, each of the
executive officers named in the above Table received a targeted long-term grant,
as set forth in column (b) above, based on the individual's position level and
competitive compensation trends. Such awards are contingent upon the attainment
of certain earnings per share ('EPS') performance levels during the three-year
period subsequent to grant (i.e., 1995-1997) and become payable in the year
following the end of this three-year performance period. The payout is based on
Warner-Lambert's achievement of a certain cumulative average EPS growth rate,
compared to the median EPS growth of a select group of companies in the
industries in which Warner-Lambert competes. Awards are payable at values
ranging from zero to 200% (maximum level) of target levels. If minimum EPS
performance levels are not attained over the three-year period, such long-term
incentive awards will not be paid. In addition, the Compensation Committee has
discretion to lower the amount of the payouts under appropriate circumstances.
Awards may become non-contingent on a pro rata basis following a change in
control of Warner-Lambert (as defined).
Retirement Benefits
The following table sets forth the estimated aggregate annual benefits payable
in the form of a straight life annuity by Warner-Lambert upon retirement at age
65 (exclusive of retirement benefits from Social Security) after a specified
number of years of service, pursuant to the Warner-Lambert Company Retirement
Plan (the 'Retirement Plan') and the Warner-Lambert Supplemental Pension Income
Plan (the 'Supplemental Plan'). In the event of early retirement, the following
amounts will be reduced by the annual retirement credits that would otherwise
have been earned to normal retirement and further reduced in accordance with the
early retirement reduction factors then in effect under the Retirement Plan and,
where applicable, the Supplemental Plan. The aggregate of amounts shown in
columns (c) and (d) of the Summary Compensation Table approximate the amount of
creditable earnings under the pension plans.
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Pension Plan Table
Years of Service
-----------------------------------------------------------------------------------
Remuneration 15 20 25 30 35 40
- -------------- -------- ---------- ---------- ---------- ---------- ----------
$ 500,000 $210,440 $ 266,920 $ 267,400 $ 267,880 $ 271,610 $ 309,979
600,000 255,240 322,920 323,400 323,880 326,010 371,979
700,000 300,040 378,920 379,400 379,880 380,410 433,979
800,000 344,840 434,920 435,400 435,880 436,360 495,979
900,000 389,640 490,920 491,400 491,880 492,360 557,979
1,000,000 434,440 546,920 547,400 547,880 548,360 619,979
1,100,000 479,240 602,920 603,400 603,880 604,360 681,979
1,200,000 524,040 658,920 659,400 659,880 660,360 743,979
1,300,000 568,840 714,920 715,400 715,880 716,360 805,979
1,400,000 613,640 770,920 771,400 771,880 772,360 867,979
1,500,000 658,440 826,920 827,400 827,880 828,360 929,979
1,600,000 703,240 882,920 883,400 883,880 884,360 991,979
1,700,000 748,040 938,920 939,400 939,880 940,360 1,053,979
1,800,000 792,840 994,920 995,400 995,880 996,360 1,115,979
1,900,000 837,640 1,050,920 1,051,400 1,051,880 1,052,360 1,177,979
2,000,000 882,440 1,106,920 1,107,400 1,107,880 1,108,360 1,239,979
- ------------------------------------------------------------------------------------------------------
The Retirement Plan is a defined benefit, career average plan which is
periodically updated in order to provide pension benefits which are more
reflective of current creditable earnings. The most recent such update was
effective January 1, 1995. The Retirement Plan provides that annual creditable
earnings are determined by an employee's January 1st base salary plus overtime
and awards paid under the Warner-Lambert Incentive Compensation Plan.
Compensation for purposes of the 1995 pension update was limited to average
annual creditable earnings for the three consecutive years during which such
compensation was highest. The Retirement Plan provides that, in the event of a
change in control of Warner-Lambert (as defined in such plan), (i) the benefits
of participants will be afforded certain additional protection for a limited
period of time and (ii) if certain actions are taken with respect to the
Retirement Plan, any surplus assets then held in the trust will inure to the
benefit of participants and their beneficiaries. Credited years of service under
the Retirement Plan, as of December 31, 1995, for each of the executive officers
named in the Summary Compensation Table are: Melvin R. Goodes-29.4 years;
Lodewijk J. R. de Vink-7.0 years; J. Frank Lazo-23.7 years; John F. Walsh-27.3
years; and Ernest J. Larini-19.0 years.
The Supplemental Plan was established to attract and retain employees in
senior managerial positions by providing supplemental pension income in amounts
reasonably related to their compensation and length of service with
Warner-Lambert. Benefits under the Supplemental Plan are based upon average
final compensation (the total amount of an employee's compensation for the three
calendar years during which such employee's compensation was the highest of the
five-year period of service ending with such employee's early or normal
retirement date, divided by three). Compensation for this purpose is the sum of
the employee's January 1st base salary plus allocated incentive compensation
under the Warner-Lambert Incentive Compensation Plan. The benefit under the
Supplemental Plan is reduced by the benefit payable under the Retirement Plan
and certain other retirement benefits including Social Security. The
Supplemental Plan also provides for payment to eligible employees of amounts
they would have received under the Retirement Plan in the absence of certain
limitations imposed by the Employee Retirement Income Security Act of 1974 and
subsequent legislation, and provides for payment to eligible employees of
amounts they would have received under the Retirement Plan if deferred incentive
awards had been
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included in creditable earnings under such plan. The Supplemental Plan provides
that, in the event of a change in control of Warner-Lambert (as defined in such
plan), (i) employees 55 years of age and older who meet certain salary level
requirements and who would have become eligible to receive Supplemental Plan
benefits upon retirement will receive such benefits upon retirement and (ii)
post-employment consulting requirements set forth in the Supplemental Plan would
no longer be applicable. Credited years of service under the Supplemental Plan,
as of December 31, 1995, for each of the executive officers named in the Summary
Compensation Table are: Melvin R. Goodes-15.7 years; Lodewijk J. R. de Vink-5.8
years; J. Frank Lazo-3.7 years; John F. Walsh-8.5 years; and Ernest J.
Larini-7.8 years.
Termination of Employment and Change in Control Arrangements and Miscellaneous
Policies
Warner-Lambert has severance policies which provide for payments of up to
twenty-four months' salary depending upon several factors, including age and
length of service, subject to modifications made by the Warner-Lambert Executive
Severance Plan (the 'Executive Severance Plan').
The Executive Severance Plan provides benefits in the event of a change in
control of Warner-Lambert (as defined in such plan) to those employees,
essentially officers, who are subject to the reporting requirements of Section
16(a) of the Securities Exchange Act of 1934, as amended. A change in control is
deemed to generally have occurred upon the acquisition of the voting power of
20% or more of Warner-Lambert's outstanding securities, a merger, consolidation,
sale or disposition of substantially all of Warner-Lambert's assets or a change
in more than half of Warner-Lambert's Board of Directors. The Executive
Severance Plan provides for severance benefits, which are payable only if a
participant leaves the employ of Warner-Lambert for any reason other than
termination for just cause (as defined in such plan) within three years after a
change in control, of thirty-six months' salary and bonus. The Executive
Severance Plan also provides for limited rights ('Limited Rights') to
participants in connection with outstanding stock options under Warner-Lambert's
stock option plans which do not presently have stock appreciation rights. The
Limited Rights provide for a cash payment to the holder upon a change in control
equal to the amount by which the fair market value (as defined in such option
plans) of a share of Common Stock exceeds the fair market value of such a share
on the date the stock option was granted, multiplied by the number of shares
with respect to which the Limited Right applies. The Executive Severance Plan
also provides special payments to participants in amounts sufficient to
reimburse such participants for any federal excise tax or similar state or local
tax which may be imposed with respect to payments received following a change in
control. Warner-Lambert has also established an Enhanced Severance Plan, which
is similar to the Executive Severance Plan, for all United States non-hourly
employees who are not eligible to participate in the Executive Severance Plan.
In addition, in the event of a change in control of Warner-Lambert (as
defined), participants in the Warner-Lambert Savings and Stock Plan and the
Warner-Lambert Incentive Compensation Plan are afforded certain additional
protections and the benefits of participation in Warner-Lambert's Excess Savings
Plan are payable immediately.
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In connection with the relocations of Mr. Joseph E. Smith, Vice President
of Warner-Lambert, from Pennsylvania to New Jersey, and of Dr. Pedro M.
Cuatrecasas, Vice President of Warner-Lambert, from North Carolina to Michigan,
interest-free loans were granted in 1990. Each loan is secured by the real
property owned by the executive officer. The current outstanding balances of the
loans are $250,000 and $350,000, respectively.
Compensation Committee Report on Executive Compensation
Warner-Lambert's executive compensation programs are designed to attract, retain
and motivate the broad based executive talent required to achieve its business
objectives and increase stockholder value. The Company's executive compensation
programs are administered by the Compensation Committee of the Board of
Directors (the 'Committee') which is comprised of the individuals listed below.
The Committee members are outside directors of the Company with responsibility
for all compensation matters for Warner-Lambert's executive officers.
General
Total compensation for Warner-Lambert's executive officers consists of a base
salary, annual cash bonus and long-term incentives, which consist of stock
options and restricted stock. The annual bonus and long-term incentives
introduce considerable risk to the total executive compensation package. These
elements are variable, may fluctuate significantly from year to year and are
directly tied to Company and individual performance.
To ensure that Management's interest in the Company is aligned with those
of its stockholders, a significant portion of executive compensation is
delivered through the equity component. Stock options are tied to the long-term
performance of Warner-Lambert and are used to provide an incentive that focuses
attention on managing the Company from an owner's perspective. Restricted stock
grants are used selectively to build stock ownership and to promote a long-term
focus by restricting the holder's ability to sell, transfer or assign the shares
until the end of the specified vesting period when the restrictions lapse. The
combination of stock options and restricted stock grants provides a level of
risk and upside opportunity that encourages Management performance in the
achievement of the Company's long-term goals and objectives. To further align
Management's interests with Warner-Lambert's stockholders, the Committee has
established formal stock ownership goals for key members of Management with the
intent that each individual invest a certain dollar amount in shares of
Warner-Lambert Common Stock.
The Committee annually reviews the competitiveness of the Company's
executive compensation programs within the industries in which it
competes -- Pharmaceutical, Consumer Health Care and Confectionery. The
companies in this compensation comparator group include the same companies that
are in the industry peer group index in the Five-Year Cumulative Total
Shareholder Return graph on page 27. In addition, the compensation comparator
group also includes several leading consumer products companies which, in
conjunction with the industry peer group, represent the broader marketplace for
the Company's executive talent.
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Warner-Lambert targets a level of total compensation (base salary, annual
bonus and stock awards) equal to the median total compensation of its comparator
group for like jobs, adjusting for company size. In addition, with respect to
stock awards, the Company's objective is to ensure that a significant portion of
the executives' total compensation is derived from such long-term equity
component. The total compensation package thus provides considerable risk and
upside opportunity that encourages the executives' performance in the
achievement of the Company's long-term goals and objectives. As a result, any
loss realized below or gain realized above the comparator group median will be
directly attributable to earnings performance and the value of the Company
stock.
The Committee has directed the Company's management to continue to review
executive compensation arrangements and employee benefit plans in light of
Section 162(m) of the Internal Revenue Code ('Section 162(m)'), which
establishes a limit on the deductibility of annual compensation for certain
executive officers that exceeds $1,000,000. It is the general intention of the
Committee to attempt to assure that executive compensation will meet the
requirements for deductibility under Section 162(m). However, the Committee
reserves the right to use its judgment, where merited by the Committee's need
for flexibility to respond to changing business conditions or by an executive's
individual performance, to nevertheless authorize compensation payments which
may not, in a specific case, be fully deductible by the Company. The Committee
will re-examine its policy with respect to Section 162(m) on an on-going basis.
Executive Officers' Compensation
In determining increases to executive officer compensation, the Committee
considered Company performance, including both financial and nonfinancial
indicators, individual performance, the business environment in which the
Company operated and competitive compensation trends.
Base salary increases were determined based upon individual performance,
competitive compensation trends and a review of salaries for like jobs at the
companies comprising Warner-Lambert's compensation comparator group.
With respect to annual cash bonuses, the maximum annual amount which may be
set aside for payment of such bonuses is first derived from a formula approved
by stockholders which takes into account the Company's net profit for the year
and the amount of capital employed in the Company. The annual cash bonus that is
actually paid to an individual executive officer is then determined by reviewing
the performance of the business unit which the executive officer manages,
including sales, profit and return on assets managed, and the executive
officer's individual performance and position level within the Company. As a
result of such review of business and individual performance for the year 1995,
total annual bonus awards to the executive officers as a group increased by 2.8%
from the prior year. A majority of each individual award was based on Company
and business unit performance, with the remainder based on individual criteria.
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The Committee has established annual stock option award guidelines for each
position level within the Company providing for a range of options to be granted
from zero shares up to a maximum number of shares. Competitive data from the
compensation comparator group, including information on the number of stock
options granted at the comparator group companies, the percentage of
compensation attributable to such stock option grants and the estimated value of
such stock options, were used to develop these guidelines, which are reviewed
annually by the Committee. The actual stock option award granted to a Company
executive is based upon the individual's overall job performance as well as
specific contributions to Company performance for the year. While factors such
as Company performance are considered in determining the number of stock options
to be granted, the individual's current performance and contributions to Company
performance are the primary determinants in these deliberations. In 1995, in
accordance with the above criteria, the executive officers received stock
options which are exercisable ratably over the next four years.
Prior to 1996, executive officers received long-term cash performance
bonuses which provide for cash dollar awards contingent on the attainment of
certain earnings per share ('EPS') performance levels during the three-year
period subsequent to grant. The executive officers received a grant of these
long-term cash performance bonuses in January, 1995, payable in 1998, based upon
the Company's achievement of a certain cumulative average EPS growth rate,
compared to the median EPS growth (based on ongoing operations) of a select
group of companies in the industries in which the Company competes. These awards
are payable at values ranging from zero to 200 percent of target levels, and pay
out following the end of the three-year performance period after EPS performance
of the long-term bonus award comparator group is calculated. The Committee also
has discretion to lower the amount of payout under appropriate circumstances.
For the three-year performance period ended December 31, 1995, the amount of
long-term bonuses payable to the executive officers as a group will be
determined following the appropriate calculations.
Effective in 1996, in an effort to further align the interests of executive
officers with that of the stockholders, the Committee approved a program whereby
stock option awards will replace the Company's long-term bonus program. As a
result, in years beginning in 1996, the Company's executive officers who
previously received long-term cash awards payable at the end of a three-year
performance period following grant will instead receive conventional stock
options equal in value to the target value of the long-term cash award and on
the same terms and conditions as the annual stock option grant.
CEO Compensation
As a result of Mr. Goodes' appointment as Chairman of the Board and Chief
Executive Officer, he received an employment agreement with Warner-Lambert which
expires May 1, 2000, and is discussed on page 16. The following is a description
of the decisions with regard to Mr. Goodes' 1995 compensation.
In February, 1995, Mr. Goodes received a base salary increase of
approximately 9.2%. This increase was arrived at after considering Mr. Goodes'
1994 job performance as well as his compensation relative to his peers at
Warner-Lambert's compensation comparator companies. Mr. Goodes' salary increase
does not affect the other elements of his
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compensation. Mr. Goodes' employment agreement provides for a minimum annual
salary that may be increased annually at the discretion of the Committee, based
upon the average salary increase of other Company officers. The salary for Mr.
Goodes reported in the Summary Compensation Table on page 15 reflects the salary
actually paid to Mr. Goodes in 1995. Effective March, 1996, the Committee
increased Mr. Goodes' salary by 5.4%, thus establishing a new minimum annual
salary under the terms of his employment agreement.
In October, 1995, Mr. Goodes received an annual stock option grant of
75,000 shares. These options were issued at the fair market value on the date of
grant and are exercisable ratably over the next four years. In future years,
beginning in 1996, in order to enhance the alignment between pay and
performance, the Committee has determined to move its decision regarding the
annual stock option grant for Company colleagues from October to February after
the close of the fiscal year. Since 1996 serves as a transition year in this
move to a common review date for all Company colleagues, stock options granted
in 1996 will be granted in four quarterly installments. As a result, Mr. Goodes
received an annual stock option grant of 118,000 shares in February, 1996, to be
divided into four installments, with each installment exercisable ratably over
the four years from date of each installment and with the exercise price of each
installment being equal to the fair market value on the date of each
installment. The options are exercisable for a ten-year term without regard to
Mr. Goodes' retirement, which is anticipated to be on his 65th birthday (May 1,
2000).
In February, 1996, Mr. Goodes received an annual cash bonus of $778,300,
compared to an annual cash bonus of $820,000 received in January, 1995. Mr.
Goodes' long-term cash performance bonus, which is based upon the Company's
achievement of a certain cumulative average EPS growth rate for the three years
1993, 1994 and 1995, and the position level held by Mr. Goodes at the beginning
of this three-year performance period, will be paid in 1996, following the
appropriate calculations of the 1995 earnings per share for each of the
companies in the long-term bonus award comparator group. Effective 1996, Mr.
Goodes received stock options in lieu of a long-term cash performance bonus.
In considering Mr. Goodes' stock option grants, annual bonus and base
salary increase effective in 1996, the Committee considered several Company
financial performance measures for 1995, including sales, profits, earnings per
share and return on assets managed, which measures met expectations, as well as
Mr. Goodes' individual performance during the year.
In determining Mr. Goodes' compensation, the Committee did not attach
specific weights or values to the various factors considered. The Committee
considered the Company's completion of all facility certifications required by
the consent decree between the Company and the U.S. Food and Drug
Administration. In addition, the Committee recognized that the proceeds from the
sale of non-productive assets and non-strategic businesses in 1995 generated an
earnings stream that enabled the Company to invest in long-term growth
opportunities, such as the late stage development of products in the Company's
pharmaceutical pipeline and the marketing of several new consumer products,
while still allowing the Company to achieve annual sales and earnings targets.
The Committee also considered key decisions and actions taken by Mr. Goodes
such as continued cost reductions and productivity programs in order to remain
competitive in the changing marketplace; several major transactions which
support Mr. Goodes' strategic vision, such as the signing of a letter of intent
to purchase the Wellcome base consumer
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healthcare business from Glaxo Wellcome plc and to restructure the joint venture
with Glaxo Wellcome to develop and market prescription products approved for
over-the-counter treatment; the sale of the non-strategic PRO toothbrush
business; the upcoming launch of Zantac'r' 75 for the treatment of heartburn;
and the launch of several other consumer healthcare and confectionery products,
such as Schick'r' Tracer FX'tm' permanent razor system, Certs'r' Cool Mint
Drops'tm', Cool Mint Listerine'r' toothpaste and Fruit-A-Burst'tm' gum. In
addition, the Committee noted that Mr. Goodes continued to invest heavily in the
Company's pharmaceutical pipeline, of which the three most promising compounds
from a scientific and commercial standpoint, will be troglitazone, a unique
insulin enhancing medication for Type II diabetes, atorvastatin, a lipid
regulator, and cefdinir, an antibiotic.
Compensation Committee Members
Donald C. Clark, Chairman
John A. Georges
William R. Howell
Lawrence G. Rawl
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Performance Graph
The graph set forth below compares the yearly percentage change in
Warner-Lambert's cumulative total shareholder return on its Common Stock to the
cumulative total return of the Standard & Poor's 500 Stock Index (the 'S&P 500')
and of a peer group index comprised of Abbott Laboratories, American Home
Products Corporation, Bristol-Myers Squibb Company, Eli Lilly and Company,
Johnson & Johnson, Merck & Co., Inc., Pfizer Inc. and Schering-Plough
Corporation. The Upjohn Company, which was previously included in the peer group
index, has been removed from such index as a result of its merger with Pharmacia
AB during 1995.
WARNER-LAMBERT COMPANY
Cumulative Total Shareholder Return for
Five-Year Period Ending December 31, 1995*
[PERFORMANCE GRAPH]
- ---------------------------------------------------------------------------------------
December 31... 1990 1991 1992 1993 1994 1995
Warner-Lambert 100.00 117.85 108.28 109.34 128.99 167.70
S&P 500 100.00 130.34 140.25 154.32 156.42 214.99
Peer Group 100.00 160.18 134.33 125.63 142.05 228.61
- ---------------------------------------------------------------------------------------
* Assumes that the value of the investment in Warner-Lambert Common Stock and
each index was $100 on December 31, 1990 and that all dividends were reinvested.
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Board of Directors' Proposal Relating
to the 1996 Stock Plan
In order to continue to extend Warner-Lambert's stock award program to a wide
group of domestic and international employees and to continue a Warner-Lambert
Common Stock equivalent account for directors' deferred compensation, the Board
of Directors adopted the Warner-Lambert Company 1996 Stock Plan (the '1996 Stock
Plan'), subject to the approval of the stockholders at the Annual Meeting of
Stockholders. The Board recommends that the 1996 Stock Plan be approved,
effective January 1, 1997.
Approval of the 1996 Stock Plan will require the affirmative vote of the
holders of a majority of the shares of Common Stock present, or represented, and
entitled to vote at the meeting. The persons named in the enclosed form of Proxy
have advised that it is their intention to vote each Proxy for such proposal,
unless a contrary decision is indicated on the Proxy.
Summary of the 1996 Stock Plan
Under the 1996 Stock Plan, as proposed, the Compensation Committee may grant
options, rights, restricted stock and performance awards ('Stock Awards') to the
employees of Warner-Lambert and its affiliates. In addition, under the 1996
Stock Plan, directors' cash compensation may be deferred and credited to a Cash
Account which accrues interest annually or to a Warner-Lambert Common Stock
equivalent account.
Stock Awards may not be granted in any year under the 1996 Stock Plan which
provide for the issuance of more than 1.65% of the outstanding shares of Common
Stock (including treasury shares) on January 1 of the year of grant. Restricted
Stock may not be granted in any year for more than 20% of the shares authorized
under the preceding sentence. In any year in which Stock Awards (including
Restricted Stock) are granted which provide for the issuance of less than the
maximum permissible number of shares, the balance of such unused shares will be
added to the above limitation in subsequent years. In addition, if any shares of
Common Stock granted under the 1996 Stock Plan are forfeited and the recipient
has received no benefits of ownership (within the meaning of Section 16 of the
Securities Exchange Act of 1934 (the 'Act')) in connection with such grant or if
any option granted expires, terminates or is cancelled without having been
exercised in full, the corresponding number of shares will be added to the
number of shares which may be issued under the Plan. As of February 9, 1996
there were 160,330,268 shares of Common Stock outstanding (including treasury
shares).
The 1996 Stock Plan will be administered by the Compensation Committee,
which consists of not less than three members of the Board of Directors. None of
the members of the Compensation Committee may hold or be granted Stock Awards.
The Compensation Committee determines (i) the employees who are to be granted
Stock Awards based upon the position and responsibilities of the employees being
considered, the nature and value of their services and their accomplishments and
potential contributions to the success of Warner-Lambert and (ii) the
consideration to be received by Warner-Lambert for any grant. It is not possible
to state the number of employees who will be eligible to receive Stock Awards
since the selection of participants rests within the discretion of the
Compensation Committee. Stock Awards may not be granted in any year to any
employee which provide for the
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issuance of more than 600,000 shares of Common Stock on a post-split basis. (See
the summary beginning on page 33 of the proposed amendment of the Restated
Certificate of Incorporation to increase the authorized shares of Common Stock
to effect a stock split.) In any year in which Stock Awards are granted which
provide for the issuance of less than the maximum permissible number of shares,
the balance of the unused shares will be added to the above limitation in
subsequent years. The 1996 Stock Plan also authorizes the Compensation Committee
to appoint a Stock Awards Committee which is empowered to make grants to
employees who are not subject to the reporting requirements of Section 16(a) of
the Act at the time of the grant.
No Stock Awards may be made under the 1996 Stock Plan after April 23, 2007.
The Warner-Lambert Company 1992 Stock Plan will remain in effect until the term
of the 1996 Stock Plan begins. The market value of a share of Common Stock on
February 9, 1996 was $98.75.
The 1996 Stock Plan may be amended or terminated by the Board of Directors.
The Compensation Committee also has limited authority to amend the 1996 Stock
Plan. However, no amendment may be made without the approval of the Board that
would increase liabilities by an amount in excess of $5,000,000 or expenses by
an amount in excess of $500,000. No amendment or termination of the 1996 Stock
Plan may, without the consent of the participant, impair the rights of a
participant with respect to Stock Awards granted or credits in a director's
deferred fee account accrued prior to such amendment or termination.
Options and Rights: Options entitle the holder to purchase shares of Common
Stock at a price determined by the Compensation Committee which may not be lower
than the fair market value of Warner-Lambert Common Stock on the date of grant.
Payment of this price shall be made in cash or, with the consent of the
Compensation Committee, in whole or in part, in Common Stock or other
consideration. Options may be granted in the form of incentive stock options or
options which do not qualify for treatment as incentive stock options. In
addition, Warner-Lambert may grant stock appreciation rights to receive an
amount computed in accordance with the formula described below.
No cash is payable by the employee on the exercise of a right. Instead,
upon exercise of a right, a grantee is generally entitled to receive an amount
equal to 125% of the amount by which the fair market value of the Common Stock
on the date of exercise exceeds the fair market value on the date the right was
granted, multiplied by the number of shares with respect to which the right is
being exercised. The 1996 Stock Plan provides that the amount payable upon the
exercise of a right shall be paid in cash, shares of Common Stock (valued at
their fair market value as of the exercise date), or in any combination thereof.
Subject to certain limitations of Federal securities law, the form of payment
will be determined by the Compensation Committee.
In the event of a change in control of Warner-Lambert (as defined in the
1996 Stock Plan), (i) the exercise of options and rights is accelerated, (ii)
the amount payable upon exercise of a right will be determined by reference,
among other things, to the price pursuant to which the change in control was
effected and (iii) the amount payable upon the exercise of a right will be in
the form of cash. In addition, in the event of a change in control of Warner-
Lambert (as defined), limited rights are provided to grantees of options, as
described above under the description of the Executive Severance Plan.
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Restricted Stock: The Compensation Committee will determine the restrictions,
which need not be the same for all grants, applicable to the vesting of each
grant of restricted stock. A certificate for the shares of Common Stock will be
issued in the name of each recipient of a grant, but the certificate will be
held in custody by Warner-Lambert for the employee's account. Subject to the
foregoing, the employee will, commencing on the date of grant of restricted
stock, have the rights and privileges of a holder of Common Stock, including the
right to receive dividends and the right to vote the shares. In the event of a
change in control of Warner-Lambert, holders of restricted stock will receive
the full value of the shares previously granted by delivery of a cash payment in
lieu thereof.
Performance Awards: Performance Awards may be granted by the Compensation
Committee providing for payment in accordance with terms and conditions
established by such committee, which may include provisions based upon
performance (corporate, group, individual or otherwise), periods of time or such
other considerations as the Compensation Committee shall determine to be
appropriate. Performance Awards may consist of shares of Common Stock or awards
that are valued by reference to shares of Common Stock or cash, and may provide
for payment in shares of Common Stock, cash or any combination thereof as
determined by the Compensation Committee. At the time of grant of performance
awards, the Compensation Committee may establish provisions which will govern in
the event of a change in control of Warner-Lambert, which may include payment to
the recipients of such awards of the full value thereof either by delivery of
shares of Common Stock without restriction or a cash payment, depending on the
requirements of Federal securities law.
Directors' Deferred Fees: Pursuant to the provisions of the 1996 Stock Plan
relating to directors' fees, non-employee directors who elect to defer all or
any portion of the cash compensation paid to directors are permitted to have
such deferred amounts credited (i) to a Cash Account which accrues interest
annually at the rate utilized for adjusting deferred bonus accounts under the
Warner-Lambert Incentive Compensation Plan or (ii) to a Warner-Lambert Common
Stock equivalent account which is credited as of the day the deferred fees would
have been payable with stock credits equal to the number of shares of Common
Stock that could have been purchased with the amount of such deferred fees. In
addition, as of the date of any dividend record date for the Common Stock, if
the director has not elected to transfer the credits in the Common Stock
equivalent account to the Cash Account, the director's Common Stock equivalent
account is credited with additional stock credits equal to the number of shares
of Common Stock that could have been purchased with the amount which would have
been paid as dividends on the share equivalents in such account.
Distributions from the directors' deferred fee accounts are made only in
cash following the year in which the director ceases to be a member of the
Board. In the event of a change in control of Warner-Lambert, all amounts
credited to a director's Common Stock equivalent account will be converted to a
Cash Account at a price determined by reference, among other things, to the
price pursuant to which the change in control was effected; and the amount
credited to each director's account will be distributed over a period of up to
15 years.
New Plan Benefits
The benefits or amounts that will be received or allocated in the future under
the 1996 Stock Plan are not determinable. For information concerning grants of
stock options and rights
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during 1995 under the 1992 Stock Plan to the Company's Chief Executive Officer
and the other four most highly compensated executive officers, see the
Option/SAR Grants in 1995 Table above.
The foregoing summary of the 1996 Stock Plan is qualified in its entirety
by the 1996 Stock Plan and reference is made to the copy of the 1996 Stock Plan
which is attached hereto as Exhibit A.
Federal Income Tax Consequences of the 1996 Stock Plan
Options and Rights: The grant or exercise of an incentive stock option will not
generally cause realization of income by the optionee; however, the amount by
which the fair market value of a share of Common Stock at the time of exercise
of an incentive stock option exceeds the option price will be included in
determining the optionee's 'Alternative minimum taxable income' for purposes of
the alternative minimum tax. In the event of a sale of the shares received upon
exercise of an incentive stock option more than two years from the date of grant
and more than one year from the date of exercise, any appreciation of the shares
received above the exercise price should qualify as long-term capital gain.
However, if shares acquired pursuant to the exercise of an incentive stock
option are sold by the optionee before the completion of such holding periods
(and if the sale is a transaction with respect to which a loss, if sustained,
would be recognized to the optionee), so much of the gain as does not exceed the
difference between the option price and the lesser of the fair market value of
the shares at the date of exercise or the fair market value at the date of
disposition will be taxable as ordinary income for the taxable year in which the
sale occurs. Any additional gain recognized on the sale should qualify as a
capital gain.
The grant of an option that is not an incentive stock option (a
'nonqualified option') should not result in realization of income by the
optionee. Upon exercise of a nonqualified option by an optionee, the excess of
the fair market value of the shares on the exercise date over the option price
should be considered compensation taxable as ordinary income to the employee. In
the event of a sale of the shares, any appreciation after the date of exercise
should qualify as a capital gain.
The grant of a right (whether or not in tandem with an option) should not
result in taxable income to the grantee. The exercise of a right by a grantee
should result in compensation taxable as ordinary income to the grantee in the
amount of cash paid and/or the fair market value of shares of Common Stock
received.
Warner-Lambert will be entitled to a deduction for Federal income tax
purposes at the same time and in the same amount as the ordinary income realized
by the employee, provided any Federal income tax withholding requirements are
satisfied and subject to the provisions of Section 162(m) of the Internal
Revenue Code which establishes a limit in certain circumstances on the
deductibility of annual compensation for certain executive officers that exceeds
$l,000,000. If the holding period requirements outlined above in connection with
an incentive stock option are satisfied, no deduction will be available to
Warner-Lambert.
Restricted Stock: An employee who receives a grant of restricted stock who does
not elect to be taxed at the time of grant will not realize taxable income upon
the grant, and Warner-Lambert will not be entitled to a deduction, until the
termination of the restrictions. Upon
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such termination, the employee will realize taxable ordinary income in an amount
equal to the fair market value of the Common Stock at that time, and
Warner-Lambert will be entitled to a deduction in the same amount, subject to
the provisions of Section 162(m) of the Internal Revenue Code. However, the
employee may elect to realize taxable ordinary income in the year the restricted
stock is granted in an amount equal to the fair market value of the shares at
that time, determined without regard to the restrictions. In that event,
Warner-Lambert will be entitled to a deduction in such year in the same amount,
and any gain or loss recognized by the employee upon subsequent disposition of
the Common Stock will be capital gain or loss.
Any dividends with respect to shares of restricted stock which are paid or
made available to the employee (who has not elected to be taxed on the date of
grant) while the restricted stock remains forfeitable are treated as additional
compensation taxable as ordinary income to the employee and deductible to
Warner-Lambert. If an employee has elected to be taxed on the date of grant, the
dividends represent ordinary dividend income to the employee and are not
deductible to Warner-Lambert. If the employee elects to be taxed on the
restricted shares on the date of grant and the employee subsequently forfeits
the shares, the employee is not entitled to a deduction as a consequence of such
forfeiture and Warner-Lambert must include as ordinary income the amount it
previously deducted in the year of grant with respect to such shares.
Performance Awards: The recipient of a performance award will realize taxable
ordinary income in an amount equal to the fair market value of the award at the
time the employee's rights with respect to such award are no longer subject to a
substantial risk of forfeiture unless the employee otherwise elects to be taxed
earlier. Warner-Lambert will be entitled to a deduction at the time the employee
realizes compensation income and in the same amount, subject to the provisions
of Section 162(m) of the Internal Revenue Code.
Board of Directors' Proposal Relating to
Appointment of Independent Accountants
The firm of Price Waterhouse LLP has audited the consolidated financial
statements of Warner-Lambert for many years and the Audit Committee has
recommended, and the Board of Directors has approved, the appointment of this
firm to continue such services for the year 1996. Accordingly, the Board of
Directors recommends that the appointment of the firm of Price Waterhouse LLP to
audit the consolidated financial statements of Warner-Lambert and its
subsidiaries for the year 1996 be approved.
A representative of Price Waterhouse LLP will be present at the meeting to
answer any questions by stockholders relating to its audit of the consolidated
financial statements of Warner-Lambert for 1995 and other appropriate questions.
The aggregate fees for worldwide audit services in connection with the 1995
audit performed by Price Waterhouse LLP for Warner-Lambert were approximately
$3.8 million.
Approval of the foregoing will require the affirmative vote of a majority
of the votes cast. The persons named in the enclosed form of Proxy have advised
that it is their intention to vote each Proxy for such proposal, unless a
contrary decision is indicated on the Proxy.
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Board of Directors' Proposal Relating to Amendment
of Restated Certificate of Incorporation to Increase
Authorized Shares of Common Stock
Subject to stockholder approval, the Board of Directors has approved an
amendment to the Restated Certificate of Incorporation of Warner-Lambert to
increase the number of authorized shares of Common Stock from 300,000,000 shares
to 500,000,000 shares in order to effectuate a two-for-one stock split. The par
value of the Common Stock would remain at $1.00 per share. The Board of
Directors recommends that such increase in the number of authorized shares of
Common Stock be approved by the stockholders.
The proposed amendment to the Restated Certificate of Incorporation will be
effected by deleting the introductory paragraph of Article FOURTH of
Warner-Lambert's Restated Certificate of Incorporation, as amended, and
substituting a new introductory paragraph that reads in full as follows:
'FOURTH: The total number of shares of all classes of stock which the
Corporation shall have authority to issue is Five Hundred Five Million
(505,000,000) shares consisting of Five Hundred Million (500,000,000)
shares of Common Stock of the par value of One Dollar ($1) per share
(hereinafter called the `Common Stock') and Five Million (5,000,000)
shares of Preferred Stock of the par value of One Dollar ($1) per
share (hereinafter called the `Preferred Stock').'
The Board of Directors has also authorized a two-for-one stock split of
Warner-Lambert's Common Stock, conditional upon the approval by the stockholders
of the proposed amendment of the Restated Certificate of Incorporation.
The Board believes that the stock split will broaden the potential market
for the Common Stock and result in a wider distribution of shares, which the
Board believes to be in the best interests of Warner-Lambert and its
stockholders. If the stockholders approve the proposed amendment, there will be
distributed to each stockholder one additional share of Common Stock, par value
$1 per share, for each share registered in such person's name on May 3, 1996,
the record date established by the Board of Directors for the stock split. It is
anticipated that certificates for the additional shares will be mailed to the
stockholders on or about May 17, 1996. Presently issued certificates will
continue to represent the same number of shares, par value $1.00 per share.
Presently issued certificates will not be exchanged for new certificates and
should not be returned to the Company or to its transfer agent.
Based on the number of shares of Common Stock currently issued (including
shares held in treasury) and shares currently reserved for issuance under
Warner-Lambert's benefit plans, and after giving effect to the proposed stock
split, there would be approximately 320,661,000 shares of Common Stock issued
(including those held in treasury) and approximately 29,369,000 shares reserved
for issuance under Warner-Lambert's benefit plans.
The stock split will have the effect of doubling the number of shares of
Common Stock issuable upon exercise of options and alternate rights granted
under Warner-Lambert's stock plans and of reducing by one-half the option price
per share with respect to such options and alternate rights. In addition, the
number of shares of restricted stock granted to Company employees and Directors
and the Common Stock equivalents held by Directors under Warner-Lambert's
deferred compensation arrangements will be doubled.
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Pursuant to the Company's Stockholder Rights Plan all holders of Common
Stock have been granted, for each share owned, a Right (as defined in the
Stockholder Rights Plan) which entitles the holder, when the Right becomes
exercisable, to purchase from Warner-Lambert one two-hundredth of a share of
Series A Participating Cumulative Preferred Stock, par value $1 per share, of
Warner-Lambert at a price of $135. Following the stock split, each Rights holder
will be entitled to purchase one four-hundredth of a share of Series A
Participating Cumulative Preferred Stock at a price of $67.50.
The proposed amendment would also increase the number of unreserved shares
of Common Stock available for issuance to approximately 149,970,000 shares.
The increase in the number of authorized shares of Common Stock is believed
by the Board of Directors to be desirable in order to assure that there will be
additional authorized shares available for possible acquisitions, employee
benefit plans, dividends, stock splits and other general corporate purposes.
Warner-Lambert does not have any immediate plans, arrangements, commitments or
understanding with respect to the issuance of any of the additional shares of
Common Stock which would be authorized by the proposed amendment. No further
action or authorization by Warner-Lambert's stockholders would be necessary
prior to the issuance of the additional shares of Common Stock unless required
by applicable law or regulatory agencies or by the rules of any stock exchange
on which Warner-Lambert's securities may then be listed. The holders of any of
the additional shares of Common Stock issued in the future would generally have
the same rights and privileges as the holders of the shares of Common Stock
currently authorized and outstanding. Those rights do not include preemptive
rights with respect to the future issuance of any such additional shares.
Warner-Lambert has been advised by tax counsel that the proposed stock
split would result in no gain or loss or realization of taxable income to
holders of Common Stock under existing Federal income tax laws. The cost basis
for tax purposes of each new share and each retained share of Common Stock would
be equal to one-half of the cost basis for tax purposes of the corresponding
share immediately preceding the stock split. In addition, the holding period for
the additional shares issued pursuant to the stock split incudes the holding
period for the original shares of Common Stock.
If a stockholder elects to sell or purchase shares of Warner-Lambert's
Common Stock following approval of the proposed amendment of the Restated
Certificate of Incorporation and the effectuation of the stock split, stock
transfer taxes (if applicable) may be higher in a transaction involving an
equivalent aggregate market value because of the greater number of shares, and
the brokerage commission may also be higher. Stockholders may wish to determine
from their brokers the commission applicable for the additional number of
shares.
The Board of Directors recommends that the stockholders vote for approval
of the proposed amendment of Warner-Lambert's Restated Certificate of
Incorporation as described above.
Approval of such amendment will require the affirmative vote of a majority
of the outstanding Common Stock. The persons named in the enclosed form of Proxy
have advised that it is their intention to vote each Proxy for such proposal
unless a contrary decision is indicated on the Proxy.
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Stockholder Proposals
From time to time stockholders present proposals which may be proper subjects
for inclusion in the Proxy Statement and for consideration at the annual
meeting. In order to be considered, such proposals must be submitted on a timely
basis. Proposals for the 1997 annual stockholders' meeting must be received at
Warner-Lambert's principal executive offices no later than November 7, 1996. Any
such proposals, as well as any questions relating thereto, should be directed to
the Secretary of Warner-Lambert.
Other Information
The cost of the solicitation of Proxies by the Board of Directors, other than
from participants in the Company's Savings and Stock Plan, will be borne by
Warner-Lambert. The cost of solicitation of Proxies from participants in the
Savings and Stock Plan will be borne by such Plan. Solicitation of proxies will
be made by mail, and, in addition, may be made by officers and employees of
Warner-Lambert, personally or by telephone or telegram. Forms of Proxies and
proxy materials may also be distributed, through brokers, custodians and other
like parties to the beneficial owners of Common Stock of Warner-Lambert.
Warner-Lambert has also retained Kissel-Blake Inc. to aid in solicitation of
Proxies at an anticipated cost not in excess of $13,500.
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EXHIBIT A
WARNER-LAMBERT COMPANY
1996 STOCK PLAN
ARTICLE I
PURPOSE OF PLAN
Section 1.1. Purpose.
(a) The purpose of the 1996 Stock Plan is to provide additional incentive
to selected officers and other employees of the Company (as hereinafter
defined), to recognize and reward their efforts and accomplishments in order to
strengthen the desire of employees to remain with the Company and stimulate
their efforts on behalf of the Company and to attract and retain persons of
competence, and, by encouraging ownership of a stock interest in the Company, to
gain for the Company the advantages inherent in employees having a sense of
proprietorship.
(b) In addition, the Plan (as hereinafter defined) will assist in the
attraction and retention of non-employee members of the Board of Directors by
providing the opportunity for such Directors to obtain a proprietary interest in
the Company's success and progress and with increased flexibility in the timing
of the receipt of fees for services on, and attending meetings of, the Board of
Directors and committees thereof.
ARTICLE II
DEFINITIONS
Section 2.1. Definitions. Whenever used herein, unless the context otherwise
indicates, the following terms shall have the respective meaning set forth
below:
Account: A Cash Account or a Stock Account.
Act: The Securities Exchange Act of 1934, as amended.
Affiliate: Any corporation, partnership, association, joint-stock company,
business trust, joint venture or unincorporated organization controlled,
directly or indirectly, by Warner-Lambert. Warner-Lambert shall be deemed to
control any such entity if Warner-Lambert possesses, directly or indirectly, the
power to direct or cause the direction of its management and policies, whether
through the ownership of voting securities, by contract or otherwise.
Board of Directors (or Board): The Board of Directors of Warner-Lambert.
Business Day: A day except for a Saturday, Sunday or a legal holiday.
Cash Account: The Account which reflects the Compensation deferred by a
Director pursuant to Section 11.3.
Cash Credit: A credit to a Director's Cash Account, expressed in whole
dollars and fractions thereof, pursuant to Section 11.3.
Closing Price: The closing price of the Common Stock on the Composite Tape
for New York Stock Exchange issues.
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Code: The Internal Revenue Code of 1986, as amended.
Committee: The committee appointed to administer the Plan in accordance with
Section 12.1 hereof.
Common Stock: Common Stock, par value $1.00 per share, of Warner-Lambert.
Company: Warner-Lambert and its Affiliates.
Compensation: All cash remuneration payable to a Director for services to
the Company as a Director or as a consultant, other than reimbursement for
expenses, and shall include retainer fees for service on, and fees for
attendance at meetings of, the Board and any committees thereof.
Conversion Election Date: A date described in Section 11.5 by which a
Director may elect to convert all or any portion of his or her Cash Account to
his or her Stock Account and vice versa.
Deferred Compensation Account: An account established by the Company for a
Director under a Predecessor Plan.
Director: Any member of the Board of Directors who is not an employee of the
Company or any of its Affiliates.
Effective Date: The date specified in Article XV hereof.
Employee: Officers and other employees of the Company or any of its
Affiliates (including such persons who are also members of the Board of
Directors).
Fair Market Value: As used in the Plan, the term 'Fair Market Value' shall
be the mean between the high and low sales prices for Common Stock on the
Composite Tape for New York Stock Exchange issues on the date the calculation
thereof shall be made. In the event the date of calculation shall be a date on
which the Common Stock shall not trade on the New York Stock Exchange,
determination of Fair Market Value shall be made as of the first date prior
thereto on which the Common Stock shall have traded on the New York Stock
Exchange.
Grantee: A Participant to whom Rights have been granted in accordance with
the provisions of Articles IV and VI hereof.
Option: The grant to Participants of options to purchase shares of Common
Stock in accordance with the provisions of Articles IV and V hereof.
Optionee: A Participant to whom one or more Options have been granted in
accordance with the provisions of Articles IV and V hereof.
Option Period: The period of time during which an Option may be exercised in
accordance with the provisions hereof.
Option Price: The price per share payable to the Company for shares of
Common Stock upon the exercise of an Option.
Participant: Each Employee to whom a Stock Award is granted under the Plan.
Performance Awards: Awards made to Employees in accordance with the
provisions of Article VIII hereof.
Plan: The Warner-Lambert Company 1996 Stock Plan.
Plan Year: The calendar year.
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Predecessor Plans: The Warner-Lambert Directors' Fees Deferral Plan, the
Warner-Lambert Consulting Fees Deferral Plan, the Deferred Compensation Plan for
Directors of Warner-Lambert Company and the Warner-Lambert 1992 Stock Plan.
Reference Option: An Option, other than an incentive stock option, to which
a Right shall relate.
Reporting Person: A person subject to the reporting requirements of Section
16(a) of the Act, excluding former officers and directors whose transactions in
Common Stock are no longer subject to Section 16 of the Act.
Restricted Period: The period of time from the date of grant of Restricted
Stock until the lapse of restrictions attached thereto.
Restricted Stock: Common Stock granted under the Plan which is subject to
restrictions in accordance with the provisions of Article VII hereof.
Right: The grant to Participants of rights to acquire shares of Common Stock
in accordance with the provisions of Articles IV and VI hereof.
Secretary: The Secretary of Warner-Lambert.
Spread: The amount by which the Option Price that would be payable by the
Grantee upon the exercise of the Reference Option is less than the Fair Market
Value of a share of Common Stock on the date the related Right was granted.
Stock Account: The Account which reflects the Compensation deferred by a
Director pursuant to Section 11.4.
Stock Award: A grant of Options, Rights, Restricted Stock or Performance
Awards in accordance with the provisions hereof.
Stock Credit: A credit to a Director's Stock Account, expressed in whole
shares and fractions thereof, pursuant to Section 11.4.
Subsidiary: Any corporation (other than Warner-Lambert) in an unbroken chain
of corporations beginning with and including Warner-Lambert if, at the time of
the granting of a Stock Award, each of the corporations other than the last
corporation in said unbroken chain owns stock possessing 50 percent or more of
the total combined voting power of all classes of stock in one of the other
corporations in such chain.
Valuation Date: The date on which a Right is exercised.
Warner-Lambert: Warner-Lambert Company or any successor to it in ownership
of substantially all of its assets, whether by merger, consolidation or
otherwise.
ARTICLE III
ELIGIBILITY AND GRANTS
Section 3.1. Eligibility and Grants. The Committee shall determine the
Employees who shall be granted Stock Awards and the number of shares thereof.
The Committee may make more than one grant to an Employee during the life of the
Plan. Each grant shall be evidenced by a written instrument duly executed by or
on behalf of the Company.
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Section 3.2. Share Limitation.
(a) Stock Awards may not be granted in any year which provide for the
issuance of more than 1.65% of the shares of Common Stock outstanding (including
issued shares reacquired by the Company) on the January 1 of the year of grant.
Restricted Stock may not be granted in any year for more than 20% of the shares
authorized under the preceding sentence. Shares of Common Stock issued under the
Plan may be either authorized and unissued shares or issued shares reacquired by
the Company. Notwithstanding the above limitation, in any year in which Stock
Awards (including Restricted Stock) are granted which provide for the issuance
of less than the maximum permissible number of shares, the balance of such
unused shares shall be added to the limitation in subsequent years. In addition,
if any Option granted under the Plan shall expire, terminate or be cancelled for
any reason without having been exercised in full, the corresponding number of
unpurchased shares shall be added to the limitation in subsequent years;
provided, however, that if such expired, terminated or cancelled Option shall
have been a Reference Option, none of such unpurchased shares shall again become
available for purposes of the Plan to the extent that the related Right granted
under the Plan is exercised. Further, if any shares of Common Stock granted
hereunder are forfeited or such award otherwise terminates without the delivery
of such shares upon the lapse of restrictions, the shares subject to such grant,
to the extent of such forfeiture or termination, shall be added to the
limitation in subsequent years so long as the Participant received no 'benefits
of ownership' (within the meaning of Section 16 of the Act) in connection with
such grant. To the extent permitted by Section 16 of the Act, any shares of
Common Stock issued under the Plan through the assumption or substitution of
outstanding grants from an acquired company shall not reduce the shares
available under the Plan.
(b) Stock Awards may not be granted in any year to any individual which
provide for the issuance of more than 600,000 shares of Common Stock (as such
number shall be adjusted in accordance with Article X). Notwithstanding the
above limitation, in any year in which Stock Awards are granted which provide
for the issuance of less than the maximum permissible number of shares, the
balance of such unused shares shall be added to the limitation in subsequent
years.
ARTICLE IV
GENERAL TERMS OF OPTIONS AND RIGHTS
Section 4.1. Consideration. The Committee shall determine the consideration
to the Company for the granting of Options and Rights under the Plan, as well as
the conditions, if any, which it may deem appropriate to ensure that such
consideration will be received by, or will accrue to, the Company, and, in the
discretion of the Committee, such consideration need not be the same, but may
vary for Options and Rights granted under the Plan at the same time or from time
to time.
Section 4.2. Number of Options and Rights.
(a) The Committee may grant more than one Option or Right to an individual
during the life of the Plan and, subject to the requirements of Section 422 of
the Code with respect to incentive stock options, such Option or Right may be in
addition to, in tandem with, or in substitution for, options or rights
previously granted under the Plan or under another stock plan of the Company or
of another corporation and assumed by the Company.
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(b) The Committee may permit the voluntary surrender of all or a portion of
any Option granted under the Plan or any prior plan to be conditioned upon the
granting to the Employee of a new Option for the same or a different number of
shares as the Option surrendered, or may require such voluntary surrender as a
condition precedent to a grant of a new Option to such Employee. Such new Option
shall be exercisable at the price, during the period, and in accordance with any
other terms or conditions specified by the Committee at the time the new Option
is granted.
Section 4.3. Option and Right Agreements. The Company shall effect the
grant of Options and Rights under the Plan, in accordance with determinations
made by the Committee, by execution of instruments in writing, in a form
approved by the Committee. Each Option and Right shall contain such terms and
conditions (which need not be the same for all Options and Rights, whether
granted at the same time or at different times) as the Committee shall deem to
be appropriate. The Committee may, in its sole discretion, and subject to such
terms and conditions as it may adopt, accelerate the date or dates on which some
or all outstanding Options and Rights may be exercised. Except as otherwise
provided by the Committee, Options and Rights shall be exercised by submitting
to the Company a signed copy of a notice of exercise in a form to be supplied by
the Company and the exercise of an Option or Right shall be effective on the
date on which the Company receives such notice at its principal corporate
offices.
Section 4.4. Non-Transferability of Option or Right. No Option or Right
granted under the Plan to an Employee shall be transferable by the Employee
otherwise than by will or by the laws of descent and distribution or pursuant to
a 'qualified domestic relations order' (as defined in the Code), and such Option
and Right shall be exercisable, during the Employee's lifetime, only by such
Employee.
Section 4.5. Optionees and Grantees not Stockholders. An Optionee or
Grantee or legal representative thereof shall have none of the rights of a
stockholder with respect to shares subject to Options or Rights until such
shares shall be issued upon exercise of the Option or Right.
Section 4.6. Certain Events. As used in the Plan, a 'Change in Control of
Warner-Lambert' shall be deemed to have occurred if (i) any person (as such term
is used in Sections 13(d) and 14(d)(2) of the Act) is or becomes the beneficial
owner (as defined in Rule 13d-3 under the Act), directly or indirectly, of
securities of Warner-Lambert representing twenty percent (20%) or more of the
combined voting power of Warner-Lambert's then outstanding securities, (ii) upon
the consummation of a merger, consolidation, sale or disposition of all or
substantially all of Warner-Lambert's assets or plan of liquidation which is
approved by the stockholders of Warner-Lambert (a 'Transaction'), or (iii) the
composition of the Board at any time during any consecutive twenty-four (24)
month period changes such that the Continuity Directors (as hereinafter defined)
cease for any reason to constitute at least fifty-one percent (51%) of the
Board. For purposes of the foregoing clause (iii), 'Continuity Directors' means
those members of the Board who either (a) were directors at the beginning of
such consecutive twenty-four (24) month period, or (b)(1) filled a vacancy
during such twenty-four (24) month period created by reason of (x) death, (y) a
medically determinable physical or mental impairment which renders the director
substantially unable to function as a director or (z) retirement at the last
mandatory retirement age in effect for at least two (2) years, and (2) were
elected, nominated or voted for by at least fifty-one percent (51%) of
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the current directors who were also directors at the commencement of such
twenty-four (24) month period. Notwithstanding the provisions of Article II
hereof, upon the exercise of a Right during the 30-day period following
Warner-Lambert obtaining actual knowledge of a Change in Control of
Warner-Lambert, 'Fair Market Value' of a share of Common Stock on the Valuation
Date shall be equal to the higher of (i) the highest closing sale price per
share of Common Stock of Warner-Lambert on the Composite Tape for New York Stock
Exchange issues during the period commencing 30 days prior to such Change in
Control and ending immediately prior to such exercise or (ii) if the Change in
Control of Warner-Lambert occurs as a result of a tender or exchange offer or
consummation of a Transaction, then the highest price per share of Common Stock
pursuant thereto. Any consideration other than cash forming a part or all of the
consideration for Common Stock to be paid pursuant to the applicable transaction
shall be valued at the valuation placed thereon by the Board. Adjustments, if
any, shall be made in accordance with Section 10.1 hereof.
ARTICLE V
TERMS AND CONDITIONS OF OPTIONS
Section 5.1. Types of Options. Options granted under the Plan shall be in
the form of (i) incentive stock options as defined in Section 422 of the Code,
or (ii) options not qualifying under such section, or both, in the discretion of
the Committee. The status of each Option shall be identified in the Option
agreement.
Section 5.2. Option Price. The Option Price shall be such as shall be fixed
by the Committee, subject to adjustment pursuant to Section 10.1 hereof;
provided, however, that the Option Price shall not be less than the Fair Market
Value of Warner-Lambert Common Stock on the date of grant. The date of the
granting of an Option under the Plan shall be the date fixed by the Committee.
Section 5.3. Period of Option.
(a) No part of an Option may be exercised unless the Optionee remains in the
continuous employ of the Company for the period of time specified by the
Committee, except that upon the occurrence of a Change in Control of
Warner-Lambert all Options may be exercised without giving effect to the period
of employment limitation and the limitations, if any, which may have been
imposed by the Committee pursuant to Section 5.3(b) with respect to the percent
of the total number of shares to which the Option relates which may be purchased
from time to time during the Option Period.
(b) Options will be exercisable thereafter over the Option Period, which, in
the case of each Option, shall be a period determined by the Committee and will
be exercisable at such times and in such amounts as determined by the Committee
at the time each Option is granted. Notwithstanding any other provision
contained in this Plan, no Option shall be exercisable after the expiration of
the Option Period. Except as provided in Sections 5.4, 5.5 and 5.6 hereof or as
otherwise determined by the Committee, no Option may be exercised unless the
Optionee is then in the employ of the Company and shall have been continuously
so employed since the date of the grant of such Option.
Section 5.4. Termination of Employment Before Age 55. An Optionee whose
employment terminates before age 55, by reason other than death, shall be
entitled to exercise such Option, only within the three-month period after the
date of such termination
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of employment and in no event after the expiration of the Option Period, and
then only if and to the extent that the Optionee was entitled to exercise the
Option at the date of the termination of employment, giving effect to the
limitations, if any, which may have been imposed by the Committee pursuant to
Section 5.3(b) with respect to the percent of the total number of shares to
which the Option relates which may be purchased from time to time during the
Option Period and have not been removed pursuant to Section 5.3(a).
Section 5.5. Termination of Employment On or After Age 55. An Optionee whose
employment terminates on or after age 55, by reason other than death, shall be
entitled to exercise such Option if the Optionee was entitled to exercise the
Option at the date of the termination, without, however, giving effect to the
limitations, if any, which may have been imposed by the Committee pursuant to
Section 5.3(b) with respect to the percent of the total number of shares to
which the Option relates which may be purchased from time to time during the
Option Period; provided, however, that such Option shall be exercisable until
the later of (i) the three-year period after termination of employment, or (ii)
the period after termination of employment which is equal to the number of full
months that the Option has been outstanding prior to such termination, but in no
event after the expiration of the Option Period.
Section 5.6. Death of Optionee. If an Optionee should die:
(a) while in the employ of the Company, the Option theretofore granted
shall, if the Optionee was entitled to exercise the Option at the date of
death, be exercisable by the estate of the Optionee, or by a person who
acquired the right to exercise such Option by bequest or inheritance or by
reason of the death of the Optionee, without, however, giving effect to the
limitations, if any, which may have been imposed by the Committee pursuant
to Section 5.3(b) with respect to the percent of the total number of shares
to which the Option relates which may be purchased from time to time during
the Option Period; provided, however, that such Option shall be exercisable
until the later of (i) the three-year period after termination of
employment, or (ii) the period after termination of employment which is
equal to the number of full months that the Option has been outstanding
prior to such termination, but in no event after the expiration of the
Option Period;
(b) within the three-month period after the date of the termination of
employment before age 55, the Option theretofore granted shall be
exercisable by the estate of the Optionee, or by a person who acquired the
right to exercise such Option by bequest or inheritance or by reason of the
death of the Optionee, but then only if and to the extent that the Optionee
was entitled to exercise the Option at the date of death, giving effect to
the limitations, if any, which may have been imposed by the Committee
pursuant to Section 5.3(b) with respect to the percent of the total number
of shares to which the Option relates which may be purchased from time to
time during the Option Period and have not been removed pursuant to Section
5.3(a); provided, however, that such Option shall be exercisable only
within the twelve-month period next succeeding the death of the Optionee
and in no event after the expiration of the Option Period; or
(c) after the date of the termination of employment on or after age
55, the Option theretofore granted shall, if the Optionee was entitled to
exercise the Option at the date of death, be exercisable by the estate of
the Optionee, or by a person who acquired the right to exercise such Option
by bequest or inheritance or by reason of the death of the
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Optionee, without, however, giving effect to the limitations, if any, which
may have been imposed by the Committee pursuant to Section 5.3(b) with
respect to the percent of the total number of shares to which the Option
relates which may be purchased from time to time during the Option Period;
provided, however, that such Option shall be exercisable until the latest
of (i) the three-year period after termination of employment, (ii) the
period after termination of employment which is equal to the number of full
months that the Option has been outstanding prior to such termination, or
(iii) the twelve-month period after the death of the Optionee provided such
death occurs before the later of (i) or (ii), but in no event after the
expiration of the Option Period.
Section 5.7. Payment for shares. Payment for shares of Common Stock shall
be made in full at the time of exercise of the Option. Nothing herein shall be
construed to prohibit the Company from making a loan or advance to the Optionee
for the purpose of financing, in whole or in part, the purchase of optioned
shares. Payment of the Option Price shall be made in cash or, with the consent
of the Committee, in whole or in part in Common Stock, Stock Awards or other
consideration. Payment may also be made by delivering a properly executed
exercise notice together with irrevocable instructions to a third party to
promptly deliver to the Company the amount of sale or loan proceeds to pay the
exercise price.
Section 5.8. Incentive Stock Options. Options granted in the form of
incentive stock options shall be subject, in addition to the foregoing
provisions, to the following provisions:
(a) Annual Limit. To the extent that the aggregate Fair Market Value
(determined at the time of grant) of the Common Stock with respect to which
incentive stock options are exercisable for the first time by any Optionee
during any calendar year (under the Plan or under any other stock plan of
the Company) exceeds $100,000, such options shall be treated as options
which are not incentive stock options.
(b) Ten Percent Shareholder. No incentive stock option shall be
granted to any individual who, at the time of the proposed grant, owns
Common Stock possessing more than ten percent (10%) of the total combined
voting power of all classes of stock of Warner-Lambert or any Subsidiary.
(c) Option Period. No incentive stock option shall be exercisable
after the expiration of ten years from the date of grant.
(d) Option Price. The Option Price of an incentive stock option shall
not be less than the Fair Market Value per share on the date of grant.
(e) Subsidiary. Incentive stock options may only be granted to
employees of Warner-Lambert and its Subsidiaries.
(f) Aggregate Limit. The aggregate number of shares of Common Stock
which may be issued pursuant to the exercise of incentive stock options
shall not exceed the lesser of (i) 20,000,000 shares or (ii) the number of
shares determined in accordance with the share limitation specified in
Section 3.2 hereof.
The Company intends that Options designated by the Committee as incentive stock
options shall constitute incentive stock options under Section 422 of the Code.
Should any of the foregoing provisions not be necessary in order to so comply or
should any additional provisions be required, the Committee may amend the Plan
accordingly, without the necessity of obtaining the approval of stockholders of
Warner-Lambert.
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ARTICLE VI
TERMS OF RIGHTS
Section 6.1. Relation to Option. Each Right shall relate specifically to a
Reference Option, then held by, or concurrently granted to, the Grantee. Upon
exercise of a Right an amount shall be payable from Warner-Lambert, determined
in accordance with Section 6.3 hereof. The Reference Option shall terminate to
the extent that the related Right is exercised.
Section 6.2. Exercise of Right. A Right shall become exercisable at such
time, and in respect of such number of shares of Common Stock, as the Reference
Option is then exercisable and such Right shall terminate upon termination of
the Reference Option, provided, however, that no Right shall be exercisable
unless the Grantee shall have remained in the continuous employ of the Company
for the period specified by the Committee, except that upon the occurrence of a
Change in Control of Warner-Lambert, all Rights may be exercised without giving
effect to the period of employment limitation and the limitations, if any, which
may have been imposed by the Committee pursuant to Section 5.3(b) with respect
to the percent of the total number of shares to which the Right relates which
may be purchased from time to time during the Option Period. Except as provided
in this Section 6.2, Section 6.5 and Section 6.6, or as otherwise determined by
the Committee, no Right shall be exercisable unless at the time of such exercise
the Grantee shall be in the employ of the Company.
Section 6.3. Amount Payable Upon Exercise of Right. Upon the exercise of a
Right the amount payable shall be equal to:
(i) 100% of the Spread but not exceeding the difference between the
Option Price and the Fair Market Value of a share of Common Stock on the
Valuation Date; plus
(ii) 125% of the amount, if any, by which the Fair Market Value of a
share of Common Stock on the Valuation Date exceeds the Fair Market Value
on the date the Right was granted;
multiplied by the number of shares with respect to which the Right is being
exercised; provided, however, that the Committee may grant Rights which provide
that upon exercise the amount payable shall be equal to 100% of the amount by
which the Fair Market Value of a share of Common Stock on the Valuation Date
exceeds the Fair Market Value on the date the Right was granted.
Section 6.4. Form of Payment. The amount payable on exercise of a Right
shall be payable in cash, shares of Common Stock valued at their Fair Market
Value as of the Valuation Date, or in any combination thereof; provided,
however, that the form of payment shall be in the sole discretion of the
Committee. In the event that any payment in the form of both cash and shares of
Common Stock is made to a Reporting Person, the cash portion of such payment
shall be made upon the Grantee becoming taxable in respect of the Common Stock
received upon exercise of the Right. Notwithstanding the foregoing, a payment,
in whole or in part, of cash may be made to a Reporting Person upon exercise of
a Right only if the Right is exercised (i) during the period beginning on the
third business day following the date of release for publication of the
quarterly or annual summary statements of sales and earnings of the Company and
ending on the twelfth business day following such date, or (ii) during any other
period permitted under the provisions of Rule 16b-3 promulgated pursuant
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to the Act. In addition, a payment of cash shall be made to a Reporting Person
who has held the Right at least six months from the date of its grant promptly
following a Change in Control of Warner-Lambert which Change in Control is
outside the control of any Reporting Person within the meaning of the aforesaid
Rule 16b-3. The Company intends that this provision shall comply with the
requirements of Rule 16b-3 under the Act. Should this provision not be necessary
to comply with the requirements of such Rule or should any additional provision
be necessary in order to comply with the requirements of such Rule, the
Committee may amend the Plan accordingly, without the necessity of obtaining the
approval of stockholders of the Company. Any fraction of a share resulting from
the above calculation shall be disregarded.
Section 6.5. Termination of Employment. If, prior to the expiration of a
Reference Option, the employment of the Grantee by the Company should terminate,
by reason other than death, the related Right shall terminate, except that if,
after a Grantee shall have remained in the employ of the Company for the period
specified by the Committee, such Grantee's employment should terminate on or
after age 55, the Right theretofore granted shall be exercisable until the later
of (i) the three-year period after termination of employment, or (ii) the period
after termination of employment which is equal to the number of full months that
the Reference Option has been outstanding prior to such termination, but in no
event after the expiration of the Option Period, without, however, giving effect
to the limitations, if any, which may have been imposed by the Committee
pursuant to Section 5.3(b) hereof.
Section 6.6. Death of Grantee. If a Grantee should die prior to the
termination of the Reference Option:
(a) while in the employ of the Company, the Right theretofore granted
shall, if the Grantee was entitled to exercise the Right at the date of
death, be exercisable by the estate of the Grantee, or by a person who
acquired the right to exercise such Right by bequest or inheritance or by
reason of the death of the Grantee, without, however, giving effect to the
limitations, if any, which may have been imposed by the Committee pursuant
to Section 5.3(b) hereof with respect to the percent of the total number of
shares to which the Right relates which may be purchased from time to time
during the Option Period; provided, however, that such Right shall be
exercisable until the later of (i) the three-year period after termination
of employment, or (ii) the period after termination of employment which is
equal to the number of full months that the Reference Option has been
outstanding prior to such termination, but in no event after the expiration
of the Option Period; or
(b) after the date of the termination of employment on or after age
55, the Right theretofore granted shall, if the Grantee was entitled to
exercise the Right at the date of death, be exercisable by the estate of
the Grantee, or by a person who acquired the right to exercise such Right
by bequest or inheritance or by reason of the death of the Grantee,
without, however, giving effect to the limitations, if any, which may have
been imposed by the Committee pursuant to Section 5.3(b) hereof with
respect to the percent of the total number of shares to which the Right
relates which may be purchased from time to time during the Option Period;
provided, however, that such Right shall be exercisable until the latest of
(i) the three-year period after termination of employment, (ii) the period
after termination of employment which is equal to the number of full months
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that the Reference Option has been outstanding prior to such termination,
or (iii) the twelve-month period after the death of the Grantee provided
such death occurs before the later of (i) or (ii), but in no event after
the expiration of the Option Period.
Section 6.7. Limited Rights. Notwithstanding anything herein to the
contrary, Limited Rights may be granted hereunder by the Committee with respect
to the options granted under this Plan or any other stock option plan of the
Company which shall entitle the holder to receive a payment of cash promptly
following a Change in Control of Warner-Lambert which Change in Control is
outside the control of any Reporting Person within the meaning of Rule 16b-3
under the Act. Such payment of cash shall be made to a Reporting Person only if
such person has held such Limited Right at least six months from the date of its
grant. Promptly following any such Change in Control, the Optionee shall be
entitled to receive a cash payment equal to the excess of the Fair Market Value
of a share of Common Stock on the Valuation Date over the Option Price of the
related Option multiplied by the number of shares with respect to which the
Limited Right relates (in such case the method of determining the Fair Market
Value in the third sentence of Section 4.6 shall apply). Limited Rights shall
expire on the first to occur of their date of payment or expiration of the
Limited Right or the related Option. Further, upon payment of a Limited Right,
the related Option (and any other Right related thereto) shall be cancelled.
Except as otherwise provided herein, the provisions of the Plan relating to
Rights shall also apply to Limited Rights.
ARTICLE VII
TERMS AND CONDITIONS OF RESTRICTED STOCK
Section 7.1. General. The restrictions set forth in Section 7.2 shall apply
to each grant of Restricted Stock for the duration of the Restricted Period.
Section 7.2. Restrictions. A stock certificate representing the number of
shares of Restricted Stock granted shall be registered in the Participant's name
but shall be held in custody by the Company for the Participant's account.
Subject to the provisions of Section 7.3, the Participant shall have all rights
and privileges of a stockholder as to such Restricted Stock, including the right
to receive dividends and the right to vote such shares, and the following
restrictions shall apply: (i) the Participant shall not be entitled to delivery
of the certificate until the expiration of the Restricted Period; (ii) none of
the shares of Restricted Stock may be sold, transferred, assigned, pledged, or
otherwise encumbered or disposed of during the Restricted Period; (iii) the
Participant shall, if requested by the Company, execute and deliver to the
Company, a stock power endorsed in blank; and (iv) all of the shares of
Restricted Stock still subject to restrictions shall be forfeited and all rights
of the Participant to such shares shall terminate without further obligation on
the part of the Company if the Participant ceases to be an Employee prior to the
expiration of the Restricted Period applicable to such shares. Upon the
forfeiture (in whole or in part) of shares of Restricted Stock, such forfeited
shares shall become treasury shares of the Company without further action by the
Participant. The Participant shall have the same rights and privileges, and be
subject to the same restrictions, with respect to any shares received pursuant
to Section 10.1 hereof.
Section 7.3. Terms and Conditions. The Committee shall establish the terms
and conditions, which need not be the same for all grants made under the Plan,
applicable to the Restricted Stock, and which may include restrictions based
upon periods of time,
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performance (corporate, group, individual or otherwise), combinations thereof or
such other restrictions as the Committee shall determine to be appropriate. The
Committee may provide for the restrictions to lapse with respect to a portion or
portions of the Restricted Stock at different times or upon the occurrence of
different events and the Committee may waive, in whole or in part, any or all
restrictions applicable to a grant of Restricted Stock. Restricted Stock awards
may be issued for no cash consideration or for such minimum consideration as may
be required by applicable law.
Section 7.4. Delivery of Restricted Shares. At the end of the Restricted
Period as herein provided, a stock certificate for the number of shares of
Restricted Stock with respect to which the restrictions have lapsed shall be
delivered, free of all such restrictions, to the Participant or the
Participant's beneficiary or estate, as the case may be. The Company shall not
be required to deliver any fractional share of Common Stock but shall pay, in
lieu thereof, the fair market value (measured as of the date the restrictions
lapse) of such fractional share to the Participant or the Participant's
beneficiary or estate, as the case may be. Notwithstanding the foregoing, the
Committee may authorize the delivery of the Restricted Stock to a Participant
during the Restricted Period, in which event any stock certificates in respect
of shares of Restricted Stock thus delivered to a Participant during the
Restricted Period applicable to such shares shall bear an appropriate legend
referring to the terms and conditions, including the restrictions, applicable
thereto.
Section 7.5. Certain Events.
(a) In the event of a Change in Control of Warner-Lambert the rights
and privileges of Participants hereunder shall be governed by the following
clause (i), clause (ii) or clause (iii), as appropriate:
(i) Value of Restricted Stock. All shares of Restricted Stock then
outstanding shall be immediately forfeited and shall revert to the
Company as treasury shares and, in lieu thereof, each Participant shall
receive a cash payment equal to the Value of the Restricted Stock (as
hereinafter defined); provided, however, that if the Participant is a
Reporting Person at the time of the Change in Control of Warner-Lambert,
the provisions of clause (ii) shall govern the rights and privileges of
such Participant.
(ii) Reporting Persons. All shares of Restricted Stock previously
granted to Participants who are Reporting Persons at the time of the
Change in Control of Warner-Lambert, which Change in Control is outside
the control of any Reporting Person within the meaning of Rule 16b-3
under the Act, and which are then outstanding and have been outstanding
for a period of at least six (6) months, shall be immediately forfeited
and shall revert to the Company as treasury shares and, in lieu thereof,
such Participant shall receive a cash payment equal to the Value of the
Restricted Stock.
(iii) Lapse of Restrictions. In the event that clause (ii) shall
not become operational with respect to a Participant who is a Reporting
Person, all restrictions applicable to shares of Restricted Stock
previously granted to such Participant and then outstanding shall expire
and such shares shall thereupon be delivered to the Participant free of
all restrictions.
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(b) As used in the Plan, the 'Value of the Restricted Stock' shall be
the higher of (a) the highest closing price per share of Common Stock on
the Composite Tape for New York Stock Exchange issues during the 30 day
period prior to the Change in Control of Warner-Lambert, or (b) if the
Change in Control of Warner-Lambert occurs as a result of a tender or
exchange offer or consummation of a Transaction, then the highest price per
share of Common Stock pursuant thereto, multiplied by the total number of
shares of Restricted Stock granted to such Participant and then
outstanding, regardless of whether the restrictions applicable thereto
shall have previously lapsed. Any consideration other than cash forming a
part or all of the consideration for Common Stock to be paid pursuant to
the applicable transaction shall be valued at the valuation placed thereon
by the Board of Directors. Adjustments, if any, shall be made in accordance
with Section 10.1 hereof.
ARTICLE VIII
TERMS AND CONDITIONS OF PERFORMANCE AWARDS
Section 8.1. Terms and Conditions. The Committee may grant Performance
Awards, determine the consideration therefor, which may include prior efforts
and accomplishments, and establish the terms and conditions thereof, which may
include provisions based upon periods of time, performance (corporate, group,
individual or otherwise), combinations thereof or such other provisions as the
Committee may determine to be appropriate. Performance Awards may consist of
shares of Common Stock or awards that are valued by reference to shares of
Common Stock (e.g., phantom stock or restricted stock units), cash or such other
measure as the Committee shall determine. Performance Awards may provide for
payment in shares of Common Stock, cash, other property or any combination
thereof as determined by the Committee. Shares of Common Stock issued pursuant
to this Section 8.1 may be issued for no cash consideration or for such minimum
consideration as may be required by applicable law. The Committee shall
determine whether payment shall be made in a lump sum, installments or deferred.
With respect to Performance Awards which are valued by reference to shares of
Common Stock, the Committee shall also determine whether the Participant may be
entitled to receive a payment of, or credit equivalent to, any dividends payable
with respect to such shares of Common Stock and the terms and conditions
applicable thereto. Further, if a payment of cash is to be made on a deferred
basis, the Committee shall establish whether interest shall be credited, the
rate thereof and any other terms and conditions applicable thereto. The
limitations on transfer set forth in Section 4.4 shall be applicable to all
Performance Awards.
ARTICLE IX
REGULATORY COMPLIANCE AND LISTING
Section 9.1. Regulatory Compliance and Listing. The issuance or delivery of
any Stock Awards and shares of Common Stock pursuant thereto may be postponed by
the Company for such periods as may be required to comply with any applicable
requirements under the Federal securities laws, any applicable listing
requirements of any national securities exchange or any requirements under any
other law or regulation applicable thereto, and the Company shall not be
obligated to issue or deliver any such awards or shares if the issuance
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or delivery thereof shall constitute a violation of any provision of any law or
of any regulation of any governmental authority or any national securities
exchange.
ARTICLE X
ADJUSTMENT IN EVENT OF CHANGES IN CAPITALIZATION
Section 10.1. Adjustments. In the event of a recapitalization, stock split,
stock dividend, combination or exchange of shares, merger, consolidation, rights
offering, reorganization, liquidation, or the sale, conveyance, lease or other
transfer by Warner-Lambert of all or substantially all of its property, or any
other change in the corporate structure or shares of Warner-Lambert, equitable
adjustments shall be made to prevent dilution or enlargement of rights (i) in
the number and class of shares authorized to be granted hereunder, (including
adjustment to the share limitation of Section 3.2 hereof), (ii) in the number
and kind of shares available under any outstanding Stock Awards (including
substitution of shares of another corporation), (iii) in the price of any
Option, (iv) in the number of Stock Credits in each Director's Stock Account and
(v) in any other aspect of the Plan as the Committee shall deem appropriate;
provided, however, that in no event may any change be made to an incentive stock
option which would constitute a 'modification' within the meaning of Section
424(h)(3) of the Code. Stock Awards granted under the Plan shall contain such
provisions as are consistent with the foregoing with respect to adjustments to
be made in the number and kind of shares covered thereby and in the Option Price
in the event of any such change.
ARTICLE XI
DIRECTORS' DEFERRED COMPENSATION
Section 11.1. Election To Participate.
(a) Each Director may elect to defer payment of all or any portion of
his or her Compensation that is payable during the immediately succeeding
Plan Year. Such election must be made with respect to all Compensation
payable in such succeeding Plan Year by June 30 of the Plan Year preceding
the Plan Year in which such Compensation otherwise would be paid (or such
later date as may be permissible under Rule 16b-3 under the Act but in no
event later than December 31 of such preceding Plan Year).
(b) An election to defer any Compensation shall be: (i) in writing,
(ii) delivered to the Secretary, and (iii) irrevocable. A Director may file
a new election each Plan Year applicable to the immediately succeeding Plan
Year. If no election or revocation of a prior election is received by June
30 of any Plan Year (or such later date as may be permissible under the
preceding paragraph), the election, if any, in effect for such Plan Year
will continue to be effective for the immediately succeeding Plan Year. If
a Director does not elect to defer Compensation payable during a Plan Year,
all such Compensation shall be paid directly to such Director in accordance
with resolutions adopted by the Board from time to time.
Section 11.2. Mode of Deferral. A Director who has elected to defer all or
a portion of his or her Compensation as provided in Section 11.1 hereof may
further elect to have such deferred amounts credited to a Cash Account, a Stock
Account, or a combination of both
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such Accounts. The Secretary shall maintain such Accounts in the name of the
Director. The election referred to in this Section 11.2 may be made twice per
year and shall become effective on the July 1st or January 1st which follows
such election by at least six months. Any such election shall be specified in a
writing delivered by the Director to the Secretary and shall be irrevocable. If
a Director fails to elect the Account to which deferral shall be made, he or she
shall be deemed to have elected deferral to the Cash Account. Compensation
deferred to a Cash Account or Stock Account shall result in Cash Credits or
Stock Credits, respectively.
Section 11.3. Cash Account. The Cash Account of a Director shall be
credited, as of the day the deferred Compensation otherwise would have been
payable to such Director, with Cash Credits equal to the dollar amount of such
deferred Compensation. The Cash Account shall be adjusted and increased each
year, as if interest was credited thereon, at the rate utilized for adjusting
deferred bonus accounts under the Warner-Lambert Company Incentive Compensation
Plan.
Section 11.4. Stock Account. The Stock Account of a Director shall be
credited, as of the day the deferred Compensation otherwise would have been
payable to such Director, with Stock Credits equal to the number of shares of
Common Stock (including fractions of a share) that could have been purchased
with the amount of such deferred Compensation at the Closing Price of shares of
Common Stock on the day the deferred Compensation otherwise would have been
payable to such Director. As of the date of any dividend record date for the
Common Stock, the Director's Stock Account shall be credited with additional
Stock Credits equal to the number of shares of Common Stock (including fractions
of a share) that could have been purchased, at the Closing Price of shares of
Common Stock on such date, with the amount which would have been paid as
dividends on that number of shares (including fractions of a share) of Common
Stock which is equal to the number of Stock Credits then attributed to the
Director's Stock Account; provided, however, that in the event that there is not
then in effect an election under Section 11.2 hereof to have any of such
Director's Compensation credited to a Stock Account and, further, that the
Director has elected under Section 11.5(a) hereof to transfer his or her Stock
Account to a Cash Account then the amount which would have been credited to the
Stock Account in accordance with this sentence but for this proviso shall
instead be credited to such Director's Cash Account. In the case of dividends
paid in property other than cash, the amount of the dividend shall be deemed to
be the fair market value of the property at the time of the payment of the
dividend, as determined in good faith by the Committee.
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Section 11.5. Conversions.
(a) Stock Account to Cash Account. A Director may elect on or before
any June 30 to convert all or any portion of his or her Stock Account to
his or her Cash Account as of the first Business Day of the year following
the year in which the election to convert is made. The amount to be
credited to such Director's Cash Account shall be obtained by multiplying
the number of Stock Credits credited to his or her Stock Account as of such
June 30 by the Closing Price of shares of Common Stock on the following
December 31.
In addition, a Director may elect on or before any December 31 to
convert all or any portion of his or her Stock Account to his or her Cash
Account as of the following July 1st. The amount to be credited to such
Director's Cash Account shall be obtained by multiplying the number of
Stock Credits credited to his or her Stock Account as of such December 31
by the Closing Price of shares of Common Stock on the following June 30.
(b) Cash Account to Stock Account. A Director may elect on or before
any June 30 to convert all or any portion of his or her Cash Account to his
or her Stock Account as of the first Business Day of the year following the
year in which the election to convert is made. The number of Stock Credits
to be credited to such Director's Stock Account shall be obtained by
dividing the number of Cash Credits credited to his or her Cash Account as
of such June 30 by the Closing Price of shares of Common Stock on the
following December 31.
In addition, a Director may elect on or before any December 31 to
convert all or any portion of his or her Cash Account to his or her Stock
Account as of the following July 1st. The number of Stock Credits to be
credited to such Director's Stock Account shall be obtained by dividing the
number of Cash Credits credited to his or her Cash Account as of such
December 31 by the Closing Price of shares of Common Stock on the following
June 30.
(c) An election under this Section 11.5 shall be in a writing
delivered to the Secretary and may be revoked or revised at any time prior
to the Conversion Election Date to which it relates.
Section 11.6. Distribution of Cash Account or Stock Account.
(a) Distributions in respect of a Director's Cash Account and Stock
Account shall become payable in full to such Director, annually, over a
period of ten (10) years, except as otherwise agreed to by the Committee
and the Director, beginning with the first day of the calendar year
following the year in which the individual ceases to be a member of the
Board of Directors.
(b) Distributions in respect of a Director's Cash Account and Stock
Account shall be made only in cash.
Section 11.7. Installment Amount.
(a) The amount of each distribution with respect to a Director's Cash
Account shall be the amount obtained by multiplying the balance in such
Account by a fraction, the numerator of which is one (1) and the
denominator of which is the number of years in which distributions remain
to be made (including the current distribution).
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(b) The amount of each distribution with respect to a Director's Stock
Account shall be the amount obtained by multiplying the number of Stock
Credits attributable to such installment (determined as hereinafter
provided) by the average of the Closing Prices of shares of Common Stock on
each Business Day in the month immediately prior to the month in which such
installment is to be paid. The number of Stock Credits attributable to an
installment shall be equal to the amount obtained by multiplying the
current number of Stock Credits in such Stock Account by a fraction, the
numerator of which is one (1) and the denominator of which is the number of
years in which distributions remain to be made (including the current
distribution).
Section 11.8. Financial Hardship. Notwithstanding any other provision
hereof, at the written request of a Director or a Director's legal
representative, the Committee, in its sole discretion, upon a finding that
continued deferral will result in financial hardship to the Director, may
authorize (i) the payment of all or a part of a Director's Accounts in a single
installment prior to his or her ceasing to be a Director or (ii) the
acceleration of payment of any multiple installments thereof; provided, however,
that Directors may not receive distributions under this Section 11.8 if such
distribution would result in liability of the Director under Section 16 of the
Act.
Section 11.9. Distribution upon Death. Upon the death of a Director, the
Committee shall pay all of such Director's Cash Account and Stock Account in a
single installment to the beneficiary designated by the Director. All such
designations shall be made in writing and delivered to the Secretary. A Director
may from time to time revoke or change any such designation by written notice to
the Secretary. If there is no designation on file with the Secretary at the time
of the Director's death, or if the beneficiary designated therein shall have
predeceased the Director, such distributions shall be made to the executor or
administrator of the Director's estate. Any distribution under this Section 11.9
shall be made as soon as practicable following notification to the Committee of
the Director's death and the value of the Stock Account for the purpose of such
distribution shall be based upon the Closing Price of shares of Common Stock on
the date of the Director's death.
Section 11.10. Certain Events. Notwithstanding any other provision hereof,
in the event of a Change in Control of Warner-Lambert which is outside of the
control of any Reporting Person within the meaning of Rule 16b-3 under the Act,
the balance in the Stock Account of each Director shall be converted to the Cash
Account. For this purpose, the balance in the Stock Account shall be determined
by multiplying the number of Stock Credits by the higher of (i) the highest
Closing Price during the period commencing 30 days prior to such Change in
Control or (ii) if the Change in Control of Warner-Lambert occurs as a result of
a tender or exchange offer or consummation of a Transaction, then the highest
price per share of Common Stock pursuant thereto. Any consideration other than
cash forming a part or all of the consideration for Common Stock to be paid
pursuant to the applicable transaction shall be valued at the valuation placed
thereon by the Board of Directors. Adjustments, if any, shall be made in
accordance with Article X hereof. Within 30 days after a Change in Control of
Warner-Lambert, each Director may designate a distribution schedule which may
provide for a lump sum payment or installment payments over a period of up to 15
years, provided, however, that no payment shall be made for a period of one year
after the Change in Control. In the event that a Director shall not make a
designation in accordance with the preceding sentence, the balance in the Cash
Account shall be distributed in a lump sum one year after the Change in Control.
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Section 11.11. Valuations. Notwithstanding any other provision hereof, in
any instance in which a Director's Stock Account is to be valued by reference to
the Closing Price of shares of Common Stock on a single day, the Committee may
declare such price to be unrepresentative of the market value of such Common
Stock and, in lieu thereof, shall base such valuation on the average of the
Closing Prices of shares of Common Stock on each Business Day during the
calendar quarter ending coincident with or immediately preceding the day which
would otherwise serve as the basis for the valuation.
Section 11.12. Funding. The Company's sole obligation to a Director or any
person claiming under or through any Director in respect of the payment of any
balance in an Account shall be solely a contractual obligation in accordance
with the terms of the Plan. No promise hereunder shall be secured by any
specific assets of the Company, nor shall any assets of the Company be
designated as attributable or allocated to the satisfaction of such promises.
Section 11.13. Status of Stock Credits. Stock Credits are not, and do not
constitute, shares of Common Stock, and no right as a holder of shares of Common
Stock shall devolve upon a Director by reason of his or her participation in the
Plan.
Section 11.14. Non-Trading Date. In the event that the date of the
determination of a Closing Price hereunder shall be a date which shall not be a
date on which the Common Stock is traded on the New York Stock Exchange,
determination of such Closing Price shall be made as of the first date
thereafter on which the Common Stock is so traded.
Section 11.15. No Right To Reelection. Nothing in the Plan shall be deemed
to create any obligation on the part of the Board to nominate any Director for
reelection by the Company's stockholders, nor confer upon any Director the right
to remain a member of the Board of Directors.
Section 11.16. Predecessor Plans. Upon the Effective Date of the Plan, no
further benefits shall accrue under any Predecessor Plans and account balances
accrued under any Predecessor Plans shall be governed by the provisions of this
Plan, except as provided in Section 11.18 hereof.
Section 11.17. Deferred Compensation Accounts. Upon the Effective Date of
the Plan, all Deferred Compensation Accounts shall become subject to the terms
and conditions of this Plan in lieu of the terms and conditions of the
Predecessor Plans, except as provided in Section 11.18 hereof.
Section 11.18. Retired Directors. Benefits accrued under Predecessor Plans
which are in pay status on the Effective Date shall continue to be paid in
accordance with the provisions of the Predecessor Plans.
Section 11.19. Federal Securities Law. The Company intends that the
provisions of this Article XI, and all transactions effected in accordance with
this Article XI, shall comply with Rule 16b-3(d) under the Act. In the event
that any provision of this Article XI is not necessary to so comply or any
additional provision is necessary to obtain or maintain such compliance, the
Committee is authorized to revise the Plan accordingly without obtaining
approval of the stockholders of Warner-Lambert. By way of illustration, and not
limitation, the Committee may bifurcate the provisions of this Article XI, and
such other provisions as it shall deem necessary, into a separate plan (which
plan shall be recognized as having received approval of the stockholders of
Warner-Lambert), if the Committee shall deem such
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action necessary to maintain qualification of Article XI (and transactions
thereunder) under Rule 16b-3(d) under the Act and the qualification of the
provisions of the Plan affecting Employees (and transactions thereunder) under
Rule 16b-3 under the Act.
ARTICLE XII
ADMINISTRATION
Section 12.1. Administration.
(a) The Plan shall be administered by a committee consisting of not
less than three members of the Board of Directors, who shall be appointed
by, and shall serve at the pleasure of, the Board of Directors. No person
who is or, within one year prior thereto, has been eligible to receive an
award under the Plan or any other plan of the Company which would result in
loss of 'disinterested person' status within the meaning of Section 16 of
the Act may be a member of the Committee, and no person may be granted a
Stock Award while a member of the Committee. A majority of the Committee
shall constitute a quorum and the acts of a majority of the members present
at any meeting at which a quorum is present, expressed from time to time by
a vote at a meeting (including a meeting held by telephone conference call
or in which one or more members of the Committee participate by telephone),
or acts approved in writing by a majority of the Committee, shall be the
acts of the Committee.
(b) In addition to the Committee's discretionary authority set forth
in other Articles hereof, the Committee has discretionary authority to
construe and interpret the Plan and is authorized to establish such rules
and regulations for the proper administration of the Plan as it may deem
advisable and not inconsistent with the provisions of the Plan. All
questions arising under the Plan or under any rule or regulation with
respect to the Plan adopted by the Committee, whether such questions
involve an interpretation of the Plan or otherwise, shall be decided by the
Committee, and its decisions shall be conclusive and binding in all cases.
(c) The Committee has discretionary authority to determine the
Employees to whom Stock Awards under the Plan are to be granted, the terms
and conditions applicable thereto and the number of shares to be covered by
each award. In selecting the individuals to whom Stock Awards shall be
granted, as well as in determining the terms and conditions applicable
thereto and the number of shares subject to each grant, the Committee shall
consider the positions and responsibilities of the Employees being
considered, the nature of the services and accomplishments of each, the
value to the Company of their services, their present and potential
contribution to the success of the Company, the anticipated number of years
of service remaining and such other factors as the Committee may deem
relevant. The Committee may obtain such advice or assistance as it deems
appropriate from persons not serving on the Committee.
Section 12.2. Stock Awards Committee. In addition, and not in limitation of
the authority of the Committee, the Stock Awards Committee (as hereinafter
constituted) may grant Stock Awards, in accordance with the provisions of the
Plan, including the establishment of the terms and conditions thereof and the
consideration to the Company therefor, to Employees who, at the time of the
grant, are not Reporting Persons. The Stock Awards Committee, whose members need
not serve on the Board of Directors, shall be
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appointed by, and shall serve at the pleasure of, the Committee. A majority of
the Stock Awards Committee shall constitute a quorum and the acts of a majority
of the members present at any meeting at which a quorum is present, expressed
from time to time by a vote at a meeting (including a meeting held by telephone
conference call or in which one or more members of the Stock Awards Committee
participate by telephone), or acts approved in writing by a majority of the
Stock Awards Committee, shall be the acts of the Stock Awards Committee.
Notwithstanding the foregoing, the Stock Awards Committee may not undertake any
action which the provisions of Rule 16b-3, promulgated pursuant to the Act,
require to be undertaken by 'disinterested persons' (as defined in said Rule) as
a condition of the continued qualification of the Plan (and transactions
thereunder) under Rule 16b-3.
ARTICLE XIII
TERMINATION OR AMENDMENT OF THE PLAN
Section 13.1. Termination or Amendment.
(a) The Board may at any time terminate the Plan and may from time to
time alter or amend the Plan or any part thereof (including any amendment
deemed necessary to ensure that the Company may comply with any regulatory
requirement referred to in Article IX); provided, however, that, unless
otherwise required by law, the rights of a Participant with respect to
Stock Awards granted or the rights of a Director with respect to his or her
Accounts prior to such termination, alteration or amendment may not be
impaired without the consent of such Participant or Director, as the case
may be, and, provided further, without the approval of the Company's
stockholders, no alteration or amendment may be made which would require
approval of such stockholders as a condition of compliance with Rule 16b-3
under the Act. The Company intends that the Plan (and transactions
thereunder) shall comply with the requirements of Rule 16b-3 promulgated
pursuant to the Act. Should any provisions hereof not be necessary in order
to comply with the requirements of such Rule or should any additional
provisions be necessary in order to so comply, the Committee may amend the
Plan accordingly, without the necessity of obtaining approval of the
stockholders of Warner-Lambert.
(b) The Committee may at any time adopt any amendment to the Plan
which (i)(A) does not increase Plan liabilities by an amount in excess of
five million dollars ($5,000,000) and does not increase Plan expense by an
amount in excess of five hundred thousand dollars ($500,000) or (B) is
required by an applicable law, regulation or ruling, (ii) can be undertaken
by the Board of Directors under the terms of the Plan, (iii) does not
involve a termination of the Plan, (iv) does not affect the limitations
contained in this sentence, and (v) does not affect the composition or
compensation of the Committee.
(c) The Committee shall have the power to cancel all Rights
theretofore granted pursuant to the Plan in the event that it shall
determine that the accounting effects of the grant or exercise of Rights
under the Plan would not be in the best interests of the Company.
(d) Any action which may be undertaken by the Committee pursuant to
the terms hereof may be undertaken by the Board, except as provided in Rule
16b-3 promulgated pursuant to the Act.
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ARTICLE XIV
MISCELLANEOUS
Section 14.1. No Right To Employment. Nothing in the Plan shall be deemed to
confer upon any Participant the right to remain in the employ of the Company.
Section 14.2. Withholding of Taxes.
(a) The Company shall have the right to require, prior to the issuance
or delivery of any shares of Common Stock or the payment of any cash
hereunder, payment by the Participant or the Director, as the case may be,
of any taxes required by law with respect thereto.
(b) The Committee may permit any such withholding obligation to be
satisfied by reducing the number of shares of Common Stock otherwise
deliverable. A Reporting Person may elect to have a sufficient number of
shares of Common Stock withheld to fulfill such tax obligations
(hereinafter a 'Withholding Election') only if the election complies with
the following conditions: (x) the Withholding Election shall be subject to
the disapproval of the Committee and (y) the Withholding Election is made
(i) during the period beginning on the third business day following the
date of release for publication of the quarterly or annual summary
statements of sales and earnings of the Company and ending on the twelfth
business day following such date, or (ii) during any other period in which
a Withholding Election may be made under the provisions of Rule 16b-3
promulgated pursuant to the Act. Any fraction of a share of Common Stock
required to satisfy such tax obligations shall be disregarded and the
amount due shall be paid instead in cash by the Participant.
Section 14.3. No Assignment of Benefits. No benefit payable under the Plan
shall, except as otherwise specifically provided by law, be subject in any
manner to anticipation, alienation, attachment, sale, transfer, assignment,
pledge, encumbrance or charge, and any attempt to anticipate, alienate, attach,
sell, transfer, assign, pledge, encumber or charge any such benefit shall be
void, and any such benefit shall not in any manner be liable for or subject to
the debts, contracts, liabilities, engagements or torts of any person who shall
be entitled to such benefit, nor shall it be subject to attachment or legal
process for or against such person. If any person entitled to a benefit
hereunder shall be adjudicated a bankrupt or shall attempt to anticipate,
alienate, sell, transfer, assign, pledge, encumber or charge such benefit, or if
any attempt is made to subject any such benefit to the debts, contracts,
liabilities, engagements or torts of any person entitled to such benefit, then
such benefit shall, in the discretion of the Committee, cease and terminate, and
in that event the Committee may cause such benefit, or any part thereof, to be
held or applied for the benefit of such person, his or her spouse, children or
other dependents, or any of them, in such manner and in such proportion as the
Committee shall determine.
Section 14.4. Death; Disability; Termination. The Committee shall establish
the provisions which shall govern in the event of the death, disability, or
termination (including layoff) of a Participant or a Director, which provisions
may be different than the provisions otherwise described herein with respect to
death, disability, and termination. If, for any reason, the Committee shall
determine that it is not desirable because of the incapacity of the person who
shall be entitled to receive any payments hereunder, to make such payments
directly to such person, the Committee may apply such payment for the benefit of
such
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person in any way that the Committee shall deem advisable or may make any such
payment to any third person who, in the judgment of the Committee, will apply
such payment for the benefit of the person entitled thereto. In the event of
such payment, the Company, the Board of Directors and the Committee shall be
discharged from all further liability therefor. The employment of an Employee
who becomes disabled shall be deemed terminated for purposes of the Plan as of
the date benefit payments would have commenced under the Warner-Lambert Long
Term Disability Benefits Plan had the Participant been enrolled in such plan,
except as otherwise provided herein or under Company policy. Absence on leave
approved by the Company shall not be considered an interruption of employment
for any purpose of the Plan.
Section 14.5. Listing and Other Conditions.
(a) As long as the Common Stock is listed on the New York Stock
Exchange, the issue of any shares of stock pursuant to a Stock Award shall
be conditioned upon the shares so to be issued being listed on such
Exchange. Warner-Lambert shall make application for listing on such
Exchange unlisted shares subject to Stock Awards, but shall have no
obligation to issue such shares unless and until such shares are so listed,
and the right to exercise any Option or Right with respect to such shares
shall be suspended until such listing has been effected.
(b) If at any time counsel to Warner-Lambert shall be of the opinion
that any sale or delivery of shares of Common Stock pursuant to a Stock
Award is or may in the circumstances be unlawful under the statutes, rules
or regulations of any applicable jurisdiction, Warner-Lambert shall have no
obligation to make such sale or delivery, or to make any application or to
effect or to maintain any qualification or registration under the
Securities Act of 1933, as amended, or otherwise with respect to shares of
Common Stock or Stock Awards, and the right to exercise any Option or Right
shall be suspended until, in the opinion of said counsel, such sale or
delivery shall be lawful.
(c) Upon termination of any period of suspension under this Section
14.5, any Stock Award affected by such suspension which shall not then have
expired or terminated shall be reinstated as to all shares available before
such suspension and as to shares which would otherwise have become
available during the period of such suspension.
Section 14.6. Governing Law. This Plan shall be governed by the law of the
State of New Jersey (regardless of the law that might otherwise govern under
applicable New Jersey principles of conflict of laws).
Section 14.7. Construction. Wherever any words are used herein in the
masculine gender they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and wherever any words
are used herein in the singular form they shall be construed as though they were
also used in the plural form in all cases where they would so apply.
Section 14.8. Laws of Foreign Jurisdictions. Without amending the Plan, but
subject to the limitations specified in Article XIII hereof, the Committee may
grant, amend, administer, annul or terminate Stock Awards on such terms and
conditions, which may be different from those specified in the Plan, as it may
deem necessary or desirable to make available tax or other benefits of the laws
of any foreign jurisdiction.
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Section 14.9. Other Plans. Nothing contained herein shall prevent the
Company from adopting additional compensation plans or arrangements.
Section 14.10. Federal Securities Law. Notwithstanding any other provision
of the Plan, no transaction shall be given effect on any date which would, in
the opinion of counsel to the Company, result in liability under Section 16(b)
of the Act.
ARTICLE XV
EFFECTIVE DATE; TERM OF PLAN
Section 15.1. Effective Date. The Plan shall be submitted to the
stockholders of Warner-Lambert for their approval at the Annual Meeting of
Stockholders to be held in 1996. Approval will require the affirmative vote of
the holders of a majority of the shares of Common Stock present, or represented,
and entitled to vote at the meeting. If approved, the Plan shall become
effective January 1, 1997.
Section 15.2. Term of Plan. No Stock Awards may be granted hereunder after
April 23, 2007. This Section 15.2 shall not affect any Stock Award granted prior
to such date. Further, the provisions of Article XI hereof (as amended from time
to time) are ongoing and shall continue until terminated by the Board.
WARNER-LAMBERT COMPANY
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[LOGO]
WARNER-LAMBERT COMPANY
MORRIS PLAINS, NEW JERSEY 07950
(201) 540-2000
['RECYCLED' LOGO] Printed on Recycled Paper
APPENDIX 1
FC PROXY CARD
WARNER-LAMBERT COMPANY
PROXY FOR THE ANNUAL MEETING TO BE HELD AT 10:30 O'CLOCK, EASTERN
DAYLIGHT SAVING TIME, TUESDAY MORNING, APRIL 23, 1996.
THE PARSIPPANY HILTON HOTEL, ONE HILTON COURT, PARSIPPANY, NEW JERSEY
P Melvin R. Goodes, Lodewijk J. R. de Vink and Ernest J. Larini
R and each of them, with full power of substitution, are hereby
O authorized to represent and to vote and act with respect to all
X stock of the undersigned at the Annual Meeting of Stockholders of
Y Warner-Lambert Company on April 23, 1996, and any adjournment or
adjournments thereof, as designated herein upon the proposals set
forth herein and, in their discretion, upon such other matters as
may properly be brought before the meeting.
Nominees for election to the Board of Directors: Change of Address
R. N. Burt, D. C. Clark, L.J.R. de Vink, J. A. Georges, M. R. ------------------------------------------
Goodes, W. H. Gray III, W. R. Howell, ------------------------------------------
L. D. Leffall, Jr., P. S. Longe, A. J. Mandl, L. G. Rawl, M. ------------------------------------------
I. Sovern and J. D. Williams ------------------------------------------
(If you have written in the above space,
please mark the corresponding box on the
reverse side of this card)
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
SEE REVERSE SIDE
[x] Please mark your votes as in this example. 0110
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE CORPORATION. When
properly executed it will be voted as directed by the stockholder but, unless
otherwise specified, it will be voted FOR the election of Directors, FOR
proposal (2), FOR proposal (3) and FOR proposal (4).
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR THE ELECTION OF DIRECTORS, FOR PROPOSAL (2), FOR PROPOSAL (3) AND FOR PROPOSAL (4).
1.Election of FOR WITHHELD 2.Warner-Lambert 1996 FOR AGAINST ABSTAIN 4.Amendment of FOR AGAINST ABSTAIN
Directors. [ ] [ ] Stock Plan [ ] [ ] [ ] Certificate of [ ] [ ] [ ]
Incorporation to
Increase Authorized
Common Stock
3.Price Waterhouse LLP FOR AGAINST ABSTAIN
as independent [ ] [ ] [ ]
accountants
For, except vote withheld from the following nominee(s):
- ----------------------------------------------------------
PLEASE SEND AN ADMITTANCE CARD. [ ]
CHANGE OF ADDRESS ON REVERSE SIDE. [ ]
SIGNATURE(S)___________________________________________________ DATE__________
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
APPENDIX 2
FC (UNEXCHANGED SHAREHOLDERS) PROXY CARD
[BLUE STRIPE]
WARNER-LAMBERT COMPANY
PROXY FOR THE ANNUAL MEETING TO BE HELD AT 10:30 O'CLOCK, EASTERN
DAYLIGHT SAVING TIME, TUESDAY MORNING, APRIL 23, 1996.
THE PARSIPPANY HILTON HOTEL, ONE HILTON COURT, PARSIPPANY, NEW JERSEY
P Melvin R. Goodes, Lodewijk J. R. de Vink and Ernest J. Larini
R and each of them, with full power of substitution, are hereby
O authorized to represent and to vote and act with respect to all
X stock of the undersigned at the Annual Meeting of Stockholders of
Y Warner-Lambert Company on April 23, 1996, and any adjournment or
adjournments thereof, as designated herein upon the proposals set
forth herein and, in their discretion, upon such other matters as
may properly be brought before the meeting.
Nominees for election to the Board of Directors: Change of Address
R. N. Burt, D. C. Clark, L.J.R. de Vink, J. A. Georges, M. R. ------------------------------------------
Goodes, W. H. Gray III, W. R. Howell, ------------------------------------------
L. D. Leffall, Jr., P. S. Longe, A. J. Mandl, L. G. Rawl, M. ------------------------------------------
I. Sovern and J. D. Williams ------------------------------------------
(If you have written in the above space,
please mark the corresponding box on the
reverse side of this card)
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
SEE REVERSE SIDE
[x] Please mark your votes as in this example. 0110
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE CORPORATION. When
properly executed it will be voted as directed by the stockholder but, unless
otherwise specified, it will be voted FOR the election of Directors, FOR
proposal (2), FOR proposal (3) and FOR proposal (4).
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR THE ELECTION OF DIRECTORS, FOR PROPOSAL (2), FOR PROPOSAL (3) AND FOR PROPOSAL (4).
1.Election of FOR WITHHELD 2.Warner-Lambert FOR AGAINST ABSTAIN 4.Amendment of Certificate of FOR AGAINST ABSTAIN
Directors. [ ] [ ] 1996 Stock Plan [ ] [ ] [ ] Incorporation to Increase [ ] [ ] [ ]
(see reverse) Authorized Common Stock
3.Price Waterhouse LLP FOR AGAINST ABSTAIN
as independent [ ] [ ] [ ]
accountants
For, except vote withheld from the following nominee(s):
- ----------------------------------------------------------
PLEASE SEND AN ADMITTANCE CARD. [ ]
CHANGE OF ADDRESS ON REVERSE SIDE. [ ]
SIGNATURE(S)___________________________________________________ DATE__________
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
APPENDIX 3
KB PROXY CARD
WARNER-LAMBERT COMPANY
PROXY FOR THE ANNUAL MEETING TO BE HELD AT 10:30 O'CLOCK, EASTERN
DAYLIGHT SAVING TIME, TUESDAY MORNING, APRIL 23, 1996.
THE PARSIPPANY HILTON HOTEL, ONE HILTON COURT, PARSIPPANY, NEW JERSEY
P Melvin R. Goodes, Lodewijk J. R. de Vink and Ernest J. Larini
R and each of them, with full power of substitution, are hereby
O authorized to represent and to vote and act with respect to all
X stock of the undersigned at the Annual Meeting of Stockholders of
Y Warner-Lambert Company on April 23, 1996, and any adjournment or
adjournments thereof, as designated herein upon the proposals set
forth herein and, in their discretion, upon such other matters as
may properly be brought before the meeting.
Nominees for election to the Board of Directors: Change of Address
R. N. Burt, D. C. Clark, L.J.R. de Vink, J. A. Georges, M. R. ------------------------------------------
Goodes, W. H. Gray III, W. R. Howell, ------------------------------------------
L. D. Leffall, Jr., P. S. Longe, A. J. Mandl, L. G. Rawl, M. ------------------------------------------
I. Sovern and J. D. Williams ------------------------------------------
(If you have written in the above space,
please mark the corresponding box on the
reverse side of this card)
PLEASE VOTE, SIGN AND DATE THIS PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED ENVELOPE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES.
SEE REVERSE SIDE
[x] Please mark your votes as in this example. 0110
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE CORPORATION. When
properly executed it will be voted as directed by the stockholder but, unless
otherwise specified, it will be voted FOR the election of Directors, FOR
proposal (2), FOR proposal (3) and FOR proposal (4).
THE BOARD OF DIRECTORS RECOMMENDS A VOTE
FOR THE ELECTION OF DIRECTORS, FOR PROPOSAL (2), FOR PROPOSAL (3) AND FOR PROPOSAL (4).
1.Election of FOR WITHHELD 2.Warner-Lambert 1996 FOR AGAINST ABSTAIN 4.Amendment of FOR AGAINST ABSTAIN
Directors. [ ] [ ] Stock Plan [ ] [ ] [ ] Certificate of [ ] [ ] [ ]
(see reverse) Incorporation to
Increase Authorized
Common Stock
3.Price Waterhouse LLP FOR AGAINST ABSTAIN
as independent [ ] [ ] [ ]
accountants
For, except vote withheld from the following nominee(s):
- ----------------------------------------------------------
PLEASE SEND AN ADMITTANCE CARD. [ ]
CHANGE OF ADDRESS ON REVERSE SIDE. [ ]
SIGNATURE(S)___________________________________________________ DATE__________
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or
guardian, please give full title as such.
STATEMENT OF DIFFERENCES
------------------------
The trademark symbol shall be expressed as 'tm'
The registered trademark symbol shall be expressed as 'r'