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SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[x] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
[ ] Confidential, for the Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
JOHNSON & JOHNSON
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(Name of Registrant as Specified in Its Charter)
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(Name of Person(s) Filing Proxy Statement)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(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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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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[Johnson & Johnson Logo]
NOTICE OF ANNUAL MEETING
AND PROXY STATEMENT
March 10, 1999
The Annual Meeting of the Shareowners of Johnson & Johnson will be held on
April 22, 1999 at 10:00 a.m. at the Hyatt Regency Hotel, Two Albany Street, New
Brunswick, New Jersey, to:
1. Elect directors;
2. Consider and act upon a proposal to ratify the appointment of
PricewaterhouseCoopers LLP as the Company's independent auditors; and
3. Transact such other business as may properly come before the meeting.
Shareowners are cordially invited to attend the meeting. If you are a
shareowner of record and plan to attend, please complete and return the enclosed
Request for Admission Card. If you are a shareowner whose shares are not
registered in your own name and you plan to attend, please request an Admission
Card by writing to the Office of the Secretary, WH 2132, Johnson & Johnson, One
Johnson & Johnson Plaza, New Brunswick, New Jersey 08933. Evidence of your stock
ownership, which you can obtain from your bank, stockbroker, etc., must
accompany your letter.
By order of the Board of Directors,
MICHAEL H. ULLMANN
Secretary
PLEASE SIGN, DATE AND RETURN YOUR PROXY
CARD PROMPTLY IN THE ENCLOSED ENVELOPE
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GENERAL INFORMATION
SHAREOWNERS ENTITLED TO VOTE. Holders of shares of the Common Stock of the
Company of record at the close of business on February 23, 1999 are entitled to
notice of and to vote at the Annual Meeting of Shareowners and at any and all
adjournments of the meeting. Each share entitles its owner to one vote. The
holders of a majority of the shares entitled to vote at the meeting must be
present in person or represented by proxy in order to constitute a quorum for
all matters to come before the meeting. On the record date there were
1,345,589,883 shares outstanding.
Other than the election of directors, which requires a plurality of the
votes cast, each matter to be submitted to the shareowners requires the
affirmative vote of a majority of the votes cast at the meeting. For purposes of
determining the number of votes cast with respect to a particular matter, only
those cast "For" or "Against" are included. Abstentions and broker non-votes are
counted only for purposes of determining whether a quorum is present at the
meeting.
PROXY SOLICITATION. The accompanying proxy is solicited by the Board of
Directors of the Company. In that connection, this Proxy Statement is being
mailed to the shareowners on or about March 10, 1999 concurrently with the
mailing of the Company's 1998 Annual Report. In addition to this solicitation by
mail, several regular employees of the Company may solicit proxies in person or
by telephone. The Company has also retained the firm of Georgeson & Company,
Inc. to aid in the solicitation of brokers, banks and institutional and other
shareowners for a fee of approximately $11,500. All costs of the solicitation of
proxies will be borne by the Company. Shareowners who execute proxies may revoke
them at any time before they are voted by executing a later dated proxy, by
voting by ballot at the meeting or by giving written notice to the Secretary of
the Company. On the accompanying proxy a shareowner may substitute the name of
another person in place of those persons presently named as proxies. In order to
vote, a substitute must present adequate identification to the Secretary before
the voting occurs.
SHAREOWNER PROPOSALS. To be included in the Board of Directors' proxy
statement and proxy card for the 2000 Annual Meeting of Shareowners, a
shareowner proposal must be received by the Company on or before November 11,
1999. In addition, under the terms of the Company's By-Laws, a shareowner who
intends to present an item of business at the 2000 Annual Meeting of Shareowners
(other than a proposal submitted for inclusion in the Company's proxy materials)
must provide notice of such business to the Company on or before November 11,
1999. Proposals and other items of business should be directed to the attention
of the Secretary at the principal office of the Company, One Johnson & Johnson
Plaza, New Brunswick, New Jersey 08933.
ELECTION OF DIRECTORS
NOMINEES. There are 13 nominees for election as directors of the Company
to hold office until the next Annual Meeting and until their successors have
been duly elected and qualified.
If the enclosed proxy is properly executed and received in time for the
meeting, it is the intention of the persons named in the proxy to vote the
shares represented thereby for the persons nominated for election as directors
unless authority to vote shall have been withheld. If any nominee should refuse
or be unable to serve, an event not anticipated, the proxy will be voted for
such person as shall be designated by the Board of Directors to replace such
nominee or, in lieu thereof, the Board of Directors may reduce the number of
directors.
All of the nominees were elected to the Board at the last Annual Meeting
and all are currently serving as directors of the Company.
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Following are summaries of the background and business experience and
descriptions of the principal occupations of the nominees.
[Gerard N. Burrow, M.D. GERARD N. BURROW, M.D., Special Advisor to the President of
Photo] Yale University for Health Affairs.
Dr. Burrow, 66, was elected to the Board of Directors in
1993 and is a member of the Nominating & Corporate
Governance Committee and Chairman of the Science and
Technology Advisory Committee. He was named to his present
position at Yale University in 1997 following service since
1992 as Dean of the Yale University School of Medicine. He
served the five years prior to his return to Yale as Vice
Chancellor for health sciences and Dean of the University of
California, San Diego School of Medicine. He previously
served as a Professor and Chairman of the Department of
Medicine at the University of Toronto and as
Physician-in-Chief at Toronto General Hospital following
earlier work in medical education, research and clinical
practice. Dr. Burrow is a member of the Institute of
Medicine of the National Academy of Sciences and a Fellow of
the American Association for the Advancement of Science. He
is also a Director of the Sea Research Foundation and on the
Board of Overseers of Brown University School of Medicine.
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[Joan Ganz Cooney JOAN GANZ COONEY, Chairman, Executive Committee, Children's
Photo] Television Workshop.
Mrs. Cooney, 69, was elected to the Board of Directors in
1978 and is a member of the Compensation Committee and the
Chairperson of the Benefits Committee. She co-founded the
Children's Television Workshop as its Executive Director in
1968 and was named its President-CEO in 1970 and
Chairman-CEO in 1988. She assumed her present
responsibilities in 1990. The Workshop's activities include
production of the well-known children's educational
television programs Sesame Street, 3-2-1 Contact, Square One
T.V. and Ghostwriter. Mrs. Cooney is a Director of
Metropolitan Life Insurance Company, the Museum of
Television and Radio and The New York and Presbyterian
Hospitals, Inc., as well as a Trustee of the National Child
Labor Committee.
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[James G. Cullen JAMES G. CULLEN, President and Chief Operating Officer, Bell
Photo] Atlantic Corporation.
Mr. Cullen, 56, was elected to the Board of Directors in
1995 and is a member of the Compensation Committee and the
Audit Committee. Mr. Cullen assumed his present position
with Bell Atlantic Corporation in December 1998, after
having been Vice Chairman since February 1995 and, prior to
that, President since February 1993. He was President and
Chief Executive Officer of Bell Atlantic-New Jersey, Inc.
from 1989 to 1993. He is a Director of Prudential Life
Insurance Company.
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[M. Judah Folkman, M.D. M. JUDAH FOLKMAN, M.D., Senior Associate in Surgery and
Photo] Director, Surgical Research Laboratory, Children's Hospital
and Andrus Professor of Pediatric Surgery and Professor of
Cell Biology, Harvard Medical School, Department of Surgery.
Dr. Folkman, 66, was elected to the Board of Directors in
February 1998 and is a member of the Science and Technology
Advisory Committee and the Public Policy Advisory Committee.
Dr. Folkman has been with Children's Hospital since 1967,
having served as Surgeon-in-Chief of Children's Hospital
from 1967 to 1981, and with Harvard Medical School since
1967. He is a member of the National Academy of Sciences and
the American Academy of Arts and Sciences. In recognition of
his founding the field of angiogenesis research he has
received numerous honorary degrees and awards, among the
most recent of which are the 1998 Keio University (Tokyo)
Medical Science Prize and the 1997 Charles S. Mott Prize of
the General Motors Cancer Research Foundation.
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[Ann Dibble Jordan ANN DIBBLE JORDAN, Former Director, Social Services
Photo] Department, Chicago Lying-In Hospital, University of Chicago
Medical Center.
Mrs. Jordan, 64, was elected to the Board of Directors in
1981 and is a member of the Nominating & Corporate
Governance Committee and the Public Policy Advisory
Committee. She assumed her previous responsibilities at
Chicago Lying-In Hospital in 1970 after having served as a
Caseworker and then a Senior Caseworker at the University of
Chicago Hospital. She is also a former Assistant Professor
at the University of Chicago School of Social Service
Administration. She is a Director of Automatic Data
Processing, Citigroup Inc. and Salant Corporation. Mrs.
Jordan is also a Director of The Phillips Collection, The
Child Welfare League, the National Symphony Orchestra and
the Kennedy Center for the Performing Arts.
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[Arnold G. Langbo ARNOLD G. LANGBO, Chairman of the Board and Chief Executive
Photo] Officer, Kellogg Company.
Mr. Langbo, 61, was elected to the Board of Directors in
1991 and is a member of the Audit Committee and Chairman of
the Compensation Committee. Mr. Langbo assumed his present
position with Kellogg Company in January 1992 after having
been President and Chief Operating Officer since December
1990. Mr. Langbo joined Kellogg Canada Inc. in 1956 and
served in a number of management positions in Canada and the
United States before being named President of Kellogg
International in 1986. Mr. Langbo is a Director of Kellogg
Company and Whirlpool Corporation. He is also a member of
the Advisory Board of the J. L. Kellogg Graduate School of
Management at Northwestern University and Chairman of the
Board of Trustees of Albion College.
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[Ralph S. Larsen RALPH S. LARSEN, Chairman, Board of Directors and Chief
Photo] Executive Officer; Chairman, Executive Committee.
Mr. Larsen, 60, was elected to the Board of Directors in
1987 and appointed to the Executive Committee in 1986. He
assumed his present responsibilities in 1989. He joined the
Company in 1962 as a manufacturing trainee with Johnson &
Johnson Products, Inc. and was named Vice President of
Marketing for the McNeil Consumer Products Company in 1980.
He left Johnson & Johnson for two years to serve as
President of Becton Dickinson's Consumer Products Division
and returned to Johnson & Johnson as President of its
Chicopee subsidiary in 1983. Mr. Larsen was appointed
Company Group Chairman in 1986 before being appointed Vice
Chairman of the Executive Committee and Chairman of a Sector
Operating Committee later in 1986. Mr. Larsen is a Director
of Xerox Corporation and AT&T Corp. He is also Chairman of
The Business Council and a member of the Policy Committee of
The Business Roundtable.
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[John S. Mayo, Ph.D. JOHN S. MAYO, PH.D., President Emeritus, AT&T Bell
Photo] Laboratories.
Dr. Mayo, 69, was elected to the Board of Directors in 1986
and is a member of the Science and Technology Advisory
Committee and Chairman of the Public Policy Advisory
Committee. He became President of AT&T Bell Laboratories in
1991 after having served as Vice President of Electronics
Technology, Executive Vice President of Network Systems and
Senior Vice President, Network Systems and Network Services.
He became President Emeritus in 1995. Dr. Mayo is a member
of the National Academy of Engineering and The Swedish Royal
Academy of Engineering Sciences. He is a Fellow of the
Institute of Electrical and Electronic Engineers. He is a
member of the Boards of Trustees of Polytechnic University
(Emeritus), the Liberty Science Center, and the Kenan
Institute for Engineering, Technology and Science, and
served on the Board of Overseers for the New Jersey
Institute of Technology, and the Board of Directors of the
National Engineering Consortium, Inc.
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[Paul J. Rizzo Photo] PAUL J. RIZZO, Retired Vice Chairman, International Business
Machines Corporation.
Mr. Rizzo, 71, was elected to the Board of Directors in 1982
and is Chairman of the Audit Committee and a member of the
Nominating & Corporate Governance Committee. He first
retired from International Business Machines Corporation as
Vice Chairman in 1987, and became Dean of the Kenan-Flagler
Business School at the University of North Carolina-Chapel
Hill. He returned to International Business Machines
Corporation in 1993 as Vice Chairman and retired from that
position in 1994. He is a partner in Franklin St. Partners,
an investment firm. Mr. Rizzo is a Director of Ryder
Systems, Inc., Pharmaceutical Product Development, Inc. and
Kenan Transport Company and Chairman of the Board of UNC
Health Systems, Inc.
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[Henry B. Schacht HENRY B. SCHACHT, Former Chairman of the Board, Lucent
Photo] Technologies Inc.
Mr. Schacht, 64, was elected to the Board of Directors in
1997 and is a member of the Audit Committee and the Chairman
of the Nominating & Corporate Governance Committee. Mr.
Schacht was the Chairman of the Board of Lucent Technologies
Inc. from April 1996 until February 1998 and was its Chief
Executive Officer from February 1996 to October 1997. Mr.
Schacht was Chairman (1977-1995) and Chief Executive Officer
(1973-1994) of Cummins Engine Company, Inc. He is also a
Director of Lucent Technologies Inc, Aluminum Company of
America, The Chase Manhattan Corporation, The Chase
Manhattan Bank, N.A., Cummins Engine Company, Inc. and
Knoll, Inc. Mr. Schacht is Chairman of the Board of Trustees
of The Ford Foundation and a Trustee of The Yale Corporation
and the Metropolitan Museum of Art.
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[Maxine F. Singer, Ph.D. MAXINE F. SINGER, PH.D., President of the Carnegie
Photo] Institution of Washington.
Dr. Singer, 68, was elected to the Board of Directors in
1991 and is a member of the Science and Technology Advisory
Committee and the Benefits Committee. Dr. Singer became
President of the Carnegie Institution of Washington in 1988
after serving for over thirty years at the National
Institute of Health where she advanced to be Chief of the
Laboratory of Biochemistry at NIH's National Cancer
Institute. Dr. Singer is a member of the National Academy of
Sciences, the American Philosophical Society, the Pontifical
Academy of Sciences and the Governing Board of the Weizmann
Institute of Science.
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[John W. Snow Photo] JOHN W. SNOW, Chairman, President and Chief Executive
Officer, CSX Corporation.
Mr. Snow, 59, was elected to the Board of Directors in 1998
and is a member of the Compensation Committee and the
Benefits Committee. Mr. Snow was named President and Chief
Executive Officer of CSX Corporation in 1989 and added the
title of Chairman in 1991. Mr. Snow is also a Director of
Circuit City Stores, Inc., GTE Corp. and USX Corporation. He
is a member of The Business Council and the Policy Committee
of The Business Roundtable. Mr. Snow is also a member of the
Board of Trustees of Johns Hopkins University and the Darden
School of Business, University of Virginia.
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[Robert N. Wilson ROBERT N. WILSON, Vice Chairman, Board of Directors and Vice
Photo] Chairman, Executive Committee.
Mr. Wilson, 58, was elected to the Board of Directors in
1986. He joined the Company in 1964, served in several sales
and marketing management positions and was appointed Company
Group Chairman in 1981 and appointed to the Executive
Committee in 1983. He was appointed Chairman of a Sector
Operating Committee in 1985 and was appointed Vice Chairman
of the Board of Directors in 1989. He assumed his expanded
responsibilities as Vice Chairman of the Executive Committee
in 1994. Mr. Wilson is also a Director of U.S. Trust
Corporation and Amerada Hess Corporation.
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STOCK OWNERSHIP/CONTROL
The following table sets forth information regarding beneficial ownership
of the Company's Common Stock owned by each director and each executive officer
named in the Summary Compensation Table and by all directors and executive
officers as a group. Each of the individuals/ groups listed below is the owner
of less than one percent of the Company's outstanding shares. Because they serve
as co-trustees of two trusts which hold stock for the benefit of others, Messrs.
Larsen and Wilson "control" an additional 8,377,711 shares of the Company's
stock in which they have no economic interest. In addition to such shares, the
directors and executive officers as a group own/control a total of 1,481,869
shares, the aggregate of 9,859,580 shares representing less than 1% of the
shares outstanding. All stock ownership is as of January 29, 1999.
SHARES UNDER
NUMBER OF COMMON EXERCISABLE
NAME SHARES(1)(2) OPTIONS(3)
- ---- ---------------- ------------
Gerard N. Burrow.................................... 6,808 2,000
Joan Ganz Cooney.................................... 11,290 2,000
James G. Cullen..................................... 4,661 2,000
M. Judah Folkman.................................... 1,074 --
Ronald G. Gelbman................................... 114,674 172,600
Ann Dibble Jordan................................... 8,827 2,000
Christian A. Koffmann............................... 33,139 202,910
Arnold G. Langbo.................................... 13,513 2,000
Ralph S. Larsen..................................... 379,309 883,250
James T. Lenehan.................................... 56,746 153,760
John S. Mayo........................................ 44,297 2,000
Paul J. Rizzo....................................... 74,212 2,000
Henry B. Schacht.................................... 2,699 900
Maxine F. Singer.................................... 17,254 2,000
John W. Snow........................................ 2,453 --
Robert N. Wilson.................................... 509,876 505,020
All directors and executive officers as a
group(21)........................................... 1,481,869 2,415,230
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(1) Includes an aggregate of 166,436 Common Stock equivalent units credited to
nonemployee directors under the Deferred Fee Plan for Nonemployee Directors
and an aggregate of 37,181 Common Stock equivalent units credited to the
named executive officers (42,451 units to all executive officers as a group)
under the Executive Income Deferral Plan for an aggregate of 208,887 units
to all directors and executive officers as a group.
(2) The shares described as "owned" are shares of the Company's Common Stock
owned by each listed person and by members of his or her household and are
held either individually, jointly or pursuant to a trust arrangement. The
directors and executive officers disclaim beneficial ownership of an
aggregate of 177,677 of these shares, including, 110,769 shares listed as
owned by Mr. Larsen, 253 shares listed as owned by Mr. Gelbman, 100 shares
listed as owned by Mr. Snow and 50,400 shares listed as owned by Mr. Wilson.
(3) Includes shares under options exercisable on January 29, 1999 and options
which become exercisable within 60 days thereafter.
DIRECTORS' FEES, COMMITTEES AND MEETINGS. Directors who are employees of
the Company receive no compensation for their services as directors or as
members of committees. Each director who is not an employee of the Company
receives an award valued at approximately $10,000 in the form of the Company's
Common Stock upon first becoming a member of the Board of Directors and receives
an annual fee of $65,000 for his or her services as director. Of such annual
fee, $20,000 is required to be deferred in Common Stock equivalent units under
the Deferred Fee Plan for
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Nonemployee Directors until termination of his or her directorship. Directors
also receive non-retainer equity compensation each year in the form of a stock
option grant. The number of options granted is determined annually and is
currently 1,500 shares per person. In addition, directors receive $5,000 for
service on a committee of the Board of Directors, or $8,000 if chairperson of
the committee. Nonemployee directors receive a meeting fee of $1,500 per day for
committee meetings held on days other than Board of Directors meeting days. A
director may elect to defer payment of all or a part of the fees until, or
beyond, termination of his or her directorship. Deferred fees (other than the
required deferral referred to above) may earn additional amounts based either on
the increase in value of units under the Certificate of Extra Compensation
Program or on a hypothetical investment in the Company's Common Stock up to the
time of termination of his/her directorship. Deferred fees beyond termination of
directorship can only earn additional amounts based on a hypothetical investment
in the Company's Common Stock. All Common Stock equivalent units held in each
nonemployee director's Deferred Fee Account receive dividend equivalents.
During the last fiscal year the Board of Directors met seven times. Each
director attended at least 75% of the total meetings of the Board of Directors
and the committees on which they served.
The Board of Directors has a standing Audit Committee, Compensation
Committee and Nominating & Corporate Governance Committee.
The members of the Audit Committee are Mr. Cullen, Mr. Langbo, Mr. Schacht
and Mr. Rizzo (Chairman). The Audit Committee assists the Board of Directors in
fulfilling its responsibilities of ensuring that management is maintaining an
adequate system of internal controls such that there is reasonable assurance
that assets are safeguarded and that financial reports are properly prepared;
that there is consistent application of generally accepted accounting
principles; and that there is compliance with management's policies and
procedures. In performing these functions, the Audit Committee meets
periodically with the independent auditors, management, and internal auditors to
review their work and confirm that they are properly discharging their
respective responsibilities. In addition, the Audit Committee recommends the
independent auditors for appointment by the Board of Directors. The Audit
Committee met five times during the last fiscal year.
The members of the Compensation Committee are Mrs. Cooney, Mr. Cullen, Mr.
Snow and Mr. Langbo (Chairman). The primary function of the Compensation
Committee is to review the compensation philosophy and policy of the Management
Compensation Committee, a non-Board committee composed of Messrs. Larsen
(Chairman), Wilson (Vice Chairman), Darretta (Vice President, Finance) and Deyo
(Vice President, Administration) which determines management and executive
compensation and establishes fringe benefit and other compensation policies. The
compensation of the members of the Executive Committee (which includes the
members of the Management Compensation Committee) is determined by the
Compensation Committee. The Compensation Committee is also responsible for the
administration of the Company's stock option plans and is the approving
authority for management recommendations with respect to option grants. During
the last fiscal year there were two meetings of the Compensation Committee.
The members of the Nominating & Corporate Governance Committee are Dr.
Burrow, Mrs. Jordan, Mr. Rizzo and Mr. Schacht (Chairman). The Nominating &
Corporate Governance Committee was established by the Board of Directors in
April 1998. The Nominating & Corporate Governance Committee is responsible for
overseeing matters of corporate governance, including the evaluation of the
performance and practices of the Board of Directors and the Chief Executive
Officer of the Company. It is also within the charter of the Nominating &
Corporate Governance Committee to review the Company's management succession
plans and executive resources. In addition, the Nominating & Corporate
Governance Committee reviews possible candidates for the Board of Directors and
recommends the nominees for directors to the Board of Directors for approval.
The Nominating & Corporate Governance Committee considers suggestions from many
sources, including shareowners, regarding possible candidates for director. Such
suggestions, together with appropriate biographical information, should be
submitted to the Secretary of the
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Company. The Nominating & Corporate Governance Committee met two times during
the last fiscal year.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
The Company believes that during 1998 all reports for the Company's
executive officers and directors that were required to be filed under Section 16
of the Securities Exchange Act of 1934 were timely filed, except that a report
was filed late by Mr. William C. Weldon to reflect a sale of common stock by his
son.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
COMPENSATION COMMITTEE OF THE BOARD
The Compensation Committee is composed entirely of nonemployee, independent
members of the Board of Directors. It is the Compensation Committee's
responsibility to review, recommend and approve changes to the Company's
compensation policies and programs. It is also the Committee's responsibility to
review and approve all compensation actions for the Chief Executive Officer and
members of the Executive Committee.
JOHNSON & JOHNSON COMPENSATION POLICY AND OBJECTIVES
Johnson & Johnson's executive compensation programs are designed to enable
the Company to attract, retain and motivate the high caliber of executives
required for the success of the business. Overall, the intent of Johnson &
Johnson's Executive Compensation Program is to provide compensation
opportunities which are comparable to the opportunities provided by a select
group of high performing, growth companies similar to Johnson & Johnson. This
objective is achieved through a variety of compensation programs, summarized
below, which support both the current and long term performance of the business.
The primary responsibility of the Company's Chief Executive Officer and
executive officers is to ensure the long-term health and growth of the Company.
This responsibility is summarized in the Johnson & Johnson Credo, which defines
the obligations of Johnson & Johnson employees to strengthen the ethical, human
and business foundations of the Company. The Credo describes the
responsibilities of the Company to its customers and others with whom it does
business, to its employees, to the communities in which the Company has a
presence as well as to the world community, and to its shareowners. The Credo
merges these business and ethical responsibilities by stating: "When we operate
according to these principles, the stockholders should realize a fair return."
The compensation of Johnson & Johnson's Chief Executive Officer is
determined by the Compensation Committee of the Board of Directors based on its
assessment of the Company's financial and non-financial performance against the
background of the factors and principles outlined in the Credo. With respect to
financial performance, the Committee has identified several factors which are
critical to the success of the business, including Sales Growth, Earnings Per
Share (EPS) Growth, increase in Cash Flow, New Product Flow and growth in
Shareowner Value. In evaluating performance against these factors, Johnson &
Johnson's results are compared to results of a premium group of high performing
companies in the consumer, pharmaceutical and professional health care fields
with comparable sales volumes and above average EPS growth rates and financial
strength. These companies include those in the Standard & Poor's Diversified
Health Care Index referred to in the Shareowner Return Performance Graph which
meet these criteria.
Sales Growth is measured as the percentage increase in sales volume from
one year to the next. EPS Growth is assessed in the same manner. Cash Flow is
measured as the Net Cash Flows from Operating Activities as reported in the
Consolidated Statement of Cash Flows. New Product
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Flow is assessed by reviewing the percentage of sales resulting from the sale of
new products introduced in the past five years. Shareowner Value is measured as
the increase in stock price plus dividend return over a five year period.
The Compensation Committee believes it is crucial that these financial and
non-financial factors are managed well, in order to ensure superior return to
Johnson & Johnson's shareowners over the long term. Therefore, while performance
in these areas is reviewed on an annual basis, the primary consideration in
assessing performance is corporate results over a longer period, usually five
years. No specific fixed weighting or formula is applied to these factors in
determining performance. Rather, the Compensation Committee exercises its
judgment in evaluating these factors and in determining appropriate
compensation.
A discussion of 1998 performance reviewed by the Compensation Committee can
be found under "Decisions on 1998 Compensation".
JOHNSON & JOHNSON'S COMPENSATION PROGRAMS
BASE SALARY
The Base Salary for all employees exempt from the Fair Labor Standards Act
(FLSA), which includes executives, is managed through the Johnson & Johnson
Salary Administration Program. Under this Program, increases in Base Salary are
governed by guidelines covering three factors: Merit (an individual's
performance); Market Parity (to adjust salaries of high performing individuals
based on the competitive market); and Promotions (to reflect increases in
responsibility). In assessing Market Parity, the Company targets to pay base
salaries which are, overall, at the median of the select group of premium
companies referred to above.
These guidelines are set each year and vary from year to year to reflect
the competitive environment and to control the overall cost of salary growth.
Individual merit increases are based on performance and can range from 0% to
200% of the merit guideline.
The domestic salary guideline for all exempt employees for 1998 was 4.0%
for merit increases plus 2% for market parity and promotion adjustments. The
domestic salary guideline for 1999 has been set at 4.0% for merit increases plus
2% for market parity and promotion adjustments.
CASH AND STOCK INCENTIVE COMPENSATION PROGRAMS
To reward performance, Johnson & Johnson provides its executive officers
with additional current compensation in the form of executive cash bonus and
stock awards which is competitive with annual incentives provided by other
companies in the premium community. No fixed weighting or formula is applied by
the Compensation Committee to corporate performance versus individual
performance in determining incentive cash bonus and stock awards for the Chief
Executive Officer and executive officers. The amounts of Awards to executive
officers are determined by the Committee acting in its discretion subject to the
maximum amounts specified in the Company's Executive Incentive Plan. Such
determination, except in the case of the Award for the Chairman, is made after
considering the recommendations of the Chairman and such other matters as the
Committee deems relevant. The Committee, acting in its discretion, may determine
to pay a lesser Award than the maximum specified. For the Chief Executive
Officer and other executive officers the amount of the total incentive is
divided between cash and stock at the discretion of the Committee.
STOCK OPTIONS
The Stock Option Plan is a long-term plan designed to link executive
rewards with shareowner value over time. Johnson & Johnson's award practice uses
a percentage of each year's base salary, expressed as a range of opportunity, to
arrive at the range of option shares available to be granted. Individual grants
are made annually and vary within that range based on performance. This "annual
10
12
multiple" approach results in grants which vary from year to year based on
assessed performance, stock price and base salary.
No stock option awards are made in the absence of satisfactory performance.
Performance is evaluated by the Compensation Committee based on the executive's
individual contribution to the long-term health and growth of the Company and
the Company's performance based on the factors discussed above. No fixed
weighting or formula is applied to corporate performance versus individual
performance in determining stock option awards. Specifically, for the Chief
Executive Officer and other named executive officers, the Committee does not
apply a mathematical formula which relates financial and/or non-financial
performance to the number of options awarded.
In the event that the stock price declines to a level below the option
grant price, options are not revalued or reissued. Vesting in awards made prior
to December 1997 generally occurred over a period from two to six years. Vesting
in awards granted in or after December 1997 generally occurs three years from
grant.
CERTIFICATES OF EXTRA COMPENSATION
Certificates of Extra Compensation (CECs) provide deferred compensation
which is paid at the end of an executive's career. CECs are performance units
which measure the Company's value based on a formula composed of one-half of the
Company's net asset value and one-half of its earning power value, relative to
the number of shares of Johnson & Johnson Common Stock outstanding. Earning
power value is calculated by taking the capitalized value of earnings averaged
over the previous five years.
The CEC program uniquely reflects Johnson & Johnson's commitment to the
long term. No awards are paid out to executives during employment. Although the
units vest over a five year period from grant, the final value of those units is
not determined until retirement or termination of employment. The value of the
program is purely performance driven. The Company pays dividend equivalents on
units awarded. Dividend equivalents are paid at the same rate provided to
shareowners on a share of Johnson & Johnson Common Stock, and are paid
quarterly.
Awards of CECs to the Chief Executive Officer and executive officers are
targeted to provide an above average long-term compensation opportunity as
compared to the premium community. Award amounts are based on the Compensation
Committee's evaluation of individual performance, based on the executive's
individual contribution to the long-term health and growth of the Company and
the Company's performance based on the factors discussed above. No fixed
weighting or formula is applied to corporate performance versus individual
performance in determining CEC awards.
DECISIONS ON 1998 COMPENSATION
Johnson & Johnson's performance for the most recent five year period ranked
in the upper half of the premium community companies in all financial factors
considered: Sales Growth, Shareowner Value, EPS Growth Rate and increase in Cash
Flow. The Company met its goal for New Product Flow.
With respect to non-financial performance, management continued to excel in
the area of managing Credo responsibility. Various initiatives undertaken by
Johnson & Johnson embody the principles of the Credo by addressing its
responsibilities to its customers, employees and the community.
Mr. Larsen's compensation awards were made based upon the Compensation
Committee's assessment of the Company's financial performance in the five areas
outlined above and its non-financial performance against the background of the
Credo as outlined above.
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The above performance results were evaluated based on the overall judgment
of the Compensation Committee with no fixed or specific mathematical weighting
applied to each element of performance. Based on the Compensation Committee's
judgment, compensation awards for 1998, in total, were consistent with
established targets.
Mr. Larsen was awarded an annual salary increase for 1998 in January 1998
of 6.0% versus a 6.0% total performance guideline. The 1998 annual incentive
paid to Mr. Larsen was slightly below the target amount. One stock option grant
was awarded to Mr. Larsen in December 1998, which provided him with options
valued at the target annual multiple of pay. During 1998, no Certificates of
Extra Compensation were granted to Mr. Larsen because his 1999 accrual will meet
the competitive target.
TAX DEDUCTIBILITY CONSIDERATIONS
The Compensation Committee has reviewed the Company's compensation plans
with regard to the deduction limitation under the Omnibus Budget Reconciliation
Act of 1993 (the "Act") and the final regulations interpreting the Act which
have been adopted by the Internal Revenue Service and the Department of the
Treasury. Based on this review, the Committee has determined that the Johnson &
Johnson Stock Option Plans, as previously approved by shareowners, meet the
requirements for deductibility under the Act. In order to permit the future
deductibility of cash bonus and stock incentive awards for certain executive
officers of the Company, the Committee and the Board of Directors have adopted
an Executive Incentive Plan which was approved by shareowners. As a result, all
bonus and stock awards qualify as performance based and are not subject to the
tax deductibility limitation of Section 162(m). In addition, the Committee has
approved the Executive Income Deferral Plan which allows an individual to elect
to defer a portion of Base Salary, CEC Dividend Equivalents and Cash and Stock
Bonus Awards. Participation in the Plan is limited to Executive Committee
members and is voluntary. Accordingly, any amounts which would otherwise result
in non-tax deductible compensation may be deferred under the Plan. As a result
of the implementation of the Johnson & Johnson Executive Incentive Plan and
elections made under the Executive Income Deferral Plan, no tax deduction was
lost as a result of Section 162(m) on compensation paid to Johnson & Johnson
executives in 1998 and none is anticipated to be lost in 1999.
Arnold G. Langbo, Chairman
Joan G. Cooney
James G. Cullen
John W. Snow
SHAREOWNER RETURN PERFORMANCE GRAPHS
Set forth below are line graphs comparing the cumulative total shareowner
return on the Company's Common Stock against the cumulative total return of the
Standard & Poor's 500 Stock Index and the Standard & Poor's Diversified Health
Care Index for the respective periods of five and ten years ending December 31,
1998. The graphs and tables assume that $100 was invested on December 31, 1993
and December 31, 1988 in the Company's Common Stock, the Standard & Poor's 500
Stock Index and the Standard & Poor's Diversified Health Care Index and that all
dividends were reinvested.
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FIVE-YEAR CUMULATIVE TOTAL SHAREOWNER RETURN (1993-1998)
S&P DIVERSIFIED HEALTH
JOHNSON & JOHNSON S&P 500 STOCK INDEX CARE
----------------- ------------------- ----------------------
1993 100.00 100.00 100.00
1994 124.99 101.32 116.46
1995 198.87 139.34 172.36
1996 234.89 171.32 217.38
1997 315.51 228.46 317.56
1998 407.06 293.74 462.61
TEN-YEAR CUMULATIVE TOTAL SHAREOWNER RETURN (1988-1998)
S&P DIVERSIFIED HEALTH
JOHNSON & JOHNSON S&P 500 STOCK INDEX CARE
----------------- ------------------- ----------------------
1988 100.00 100.00 100.00
1989 142.64 131.69 139.16
1990 175.99 127.60 169.02
1991 285.65 166.47 250.35
1992 256.52 179.15 213.76
1993 233.37 197.21 203.71
1994 291.69 199.80 237.24
1995 440.69 258.27 323.41
1996 548.13 337.84 442.81
1997 736.27 450.53 646.87
1998 949.92 579.27 942.35
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EXECUTIVE COMPENSATION
The following table shows, for each of the last three fiscal years, the
annual compensation paid to or earned by the Company's Chief Executive Officer
and the other four most highly compensated executive officers (the "Named
Officers") in all capacities in which they served:
SUMMARY COMPENSATION TABLE
ANNUAL COMPENSATION(1) LONG TERM
------------------------------------ COMPENSATION
NAME OTHER AWARDS
AND ANNUAL ------------ ALL OTHER
PRINCIPAL COMPEN- OPTIONS COMPEN-
POSITION YEAR SALARY($) BONUS($) SATION($) (#) SATION($)
--------- ---- ---------- ---------- ---------- ------------ ---------
(2) (3) (4)
R. S. Larsen 1998 $1,325,000 $1,301,796 $1,284,083 150,000 $59,603
Chairman/CEO 1997 1,192,500 1,400,871 980,552 450,000 53,663
1996 1,070,000 1,001,900 744,221 26,000 48,150
R. N. Wilson 1998 $ 900,000 $ 882,886 $1,042,273 75,000 $40,500
Vice Chairman 1997 850,000 902,594 909,371 235,000 38,250
1996 800,000 751,425 787,782 23,000 36,000
R. G. Gelbman 1998 $ 625,000 $ 401,363 $ 419,877 15,000 $28,125
Worldwide Chairman, 1997 537,500 427,514 349,857 150,000 24,188
Health Systems & 1996 450,000 318,094 274,723 15,000 20,250
Diagnostics Group
J. T. Lenehan 1998 $ 625,000 $ 426,363 $ 267,928 40,000 $28,125
Worldwide Chairman, 1997 537,500 411,880 228,152 150,000 24,188
Consumer 1996 450,000 313,094 187,820 11,000 20,250
Pharmaceuticals &
Professional Group
C. A. Koffmann 1998 $ 590,000 $ 417,052 $ 279,221 40,000 $26,550
Worldwide Chairman, 1997 525,000 401,500 234,017 125,000 23,625
Consumer & Personal 1996 450,000 303,094 203,178 12,000 20,250
Care Group
- ------------------
(1) Includes amounts paid and deferred.
(2) Bonus amounts are comprised of cash and the fair market value of stock
awards on the date award is issued.
(3) Amounts include dividend equivalents paid under the Certificate of Extra
Compensation (CEC) Program (long-term incentive plan).
(4) Amount shown is the Company's matching contribution to the 401(k) Savings
Plan and related supplemental plan.
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STOCK OPTIONS
The following table contains information concerning the grant of stock
options under the Company's 1995 Stock Option Plan to the Named Officers during
the Company's last fiscal year.
OPTION GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS
-----------------------------------------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS GRANT DATE
UNDERLYING GRANTED TO EXERCISE PRESENT
OPTIONS EMPLOYEES PRICE EXPIRATION VALUE(2)
NAME GRANTED(#)(1) IN 1998 ($/SH) DATE ($)
- ---- ------------- ---------- -------- ---------- ----------
Ralph S. Larsen............. 150,000 1.5% $80.31 12/02/08 $2,941,500
Robert N. Wilson............ 75,000 0.8% $80.31 12/02/08 $1,470,750
Ronald G. Gelbman........... 15,000 0.2% $80.31 12/02/08 $ 294,150
James T. Lenehan............ 40,000 0.4% $80.31 12/02/08 $ 784,400
Christian A. Koffmann....... 40,000 0.4% $80.31 12/02/08 $ 784,400
- ---------------
(1) The options were granted at an exercise price equal to the fair market value
of the Company's Common Stock on December 3, 1998, the date of grant. All of
the options become exercisable on the third anniversary of the date of
grant, which is the same vesting schedule for all executives granted options
on such date.
(2) The grant date present values per option share were derived using the
Black-Scholes option pricing model in accordance with the rules and
regulations of the Securities and Exchange Commission and are not intended
to forecast future appreciation of the Company's stock price. The options
expiring on December 2, 2008 had a grant date present value of $19.61 per
option share. The Black-Scholes model was used with the following
assumptions: volatility of 22% based on a historical weekly average over
five years; dividend yield of 1.30%; risk free interest of 4.47% based on a
U.S. Treasury rate of five years; and a five year option life.
OPTION EXERCISES AND FISCAL YEAR-END VALUES
The following table sets forth information with respect to the Named
Officers concerning the exercise of options during the last fiscal year and
unexercised options held as of the end of the fiscal year:
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED
OPTIONS AT YEAR END IN-THE-MONEY OPTIONS AT
SHARES 1998(#) YEAR END 1998($)(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ------------ ----------- ------------- ----------- -------------
Ralph S. Larsen.............. 51,750 $3,244,865 883,250 630,900 $56,697,932 $10,136,649
Robert N. Wilson............. 30,000 $1,830,400 519,020 403,580 $32,640,435 $ 9,659,266
Ronald G. Gelbman............ 48,000 $2,936,234 172,600 235,600 $10,392,287 $ 6,378,916
James T. Lenehan............. 43,600 $3,136,436 153,760 271,440 $ 8,813,153 $ 7,118,571
Christian A. Koffmann........ 3,050 $ 187,484 202,910 240,240 $12,506,393 $ 6,264,147
- ------------------
(1) Based on the New York Stock Exchange Composite closing price as published in
the Wall Street Journal for the last business day of the fiscal year
($83.875).
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CERTIFICATE OF EXTRA COMPENSATION PROGRAM
During the last fiscal year, no awards were made to the Named Officers
under the Company's Certificate of Extra Compensation (CEC) Program.
Since 1947, the Company has maintained a deferred compensation program
under which awards of CEC units may be made to senior management and other key
personnel of the Company and its subsidiaries worldwide. Typically, an award of
CEC units provides for a specified number of units which vest over a five year
period, though no awards are paid out to a participant until retirement or other
termination of employment. During employment, dividend equivalents are paid to
participants on CEC units in the same amount and at the same time as dividends
on the Company's Common Stock. The CEC units are valued in accordance with a
formula based on the Company's net assets and earning power over the five
preceding fiscal years. Until paid at retirement or termination of employment,
the final value of the CEC units is subject to increase or decrease based on the
performance of the Company. The value as of the end of the last fiscal year was
$17.88 per CEC unit. The cumulative number of CEC units earned as of the end of
the last fiscal year by each of the Named Officers during their careers with the
Company, valued for illustrative purposes at the $17.88 per unit value as of the
end of the last fiscal year, are: Mr. R. S. Larsen 985,400 CEC units
($17,618,952); Mr. R. N. Wilson 938,000 CEC units ($16,771,440); Mr. R. G.
Gelbman 335,600 CEC units ($6,000,528); Mr. J. T. Lenehan 201,600 CEC units
($3,604,608) and Mr. C. A. Koffmann 206,000 CEC units ($3,683,280).
RETIREMENT PLAN
The following table shows the estimated annual retirement benefit payable
on a straight life annuity basis to participating employees in the compensation
and years of service classifications indicated, under the Company's Retirement
Plan. The Retirement Plan generally covers salaried U.S. employees of the
Company and designated subsidiaries on a non-contributory basis.
PENSION PLAN TABLE
FIVE YEAR
AVERAGE ANNUAL BENEFITS FOR YEARS OF SERVICE
COVERED -----------------------------------------------------------------------
COMPENSATION 15 YEARS 20 YEARS 25 YEARS 30 YEARS 35 YEARS 40 YEARS
- ------------ -------- -------- -------- -------- -------- --------
$ 800,000 $196,600 $262,100 $ 327,600 $ 393,200 $ 458,700 $ 524,200
900,000 221,600 295,600 369,400 443,300 517,200 591,100
1,000,000 246,600 328,800 411,000 493,200 575,400 657,600
1,200,000 296,600 395,500 494,300 593,200 692,100 790,900
1,400,000 346,600 462,200 577,700 693,200 808,800 924,300
1,600,000 396,600 528,800 661,000 793,200 925,500 1,057,700
1,800,000 446,600 595,500 744,400 893,300 1,042,100 1,191,000
2,000,000 496,600 662,200 827,700 993,300 1,158,800 1,324,400
2,200,000 546,700 728,900 911,100 1,093,300 1,275,500 1,457,700
2,400,000 596,700 795,600 994,400 1,193,300 1,392,200 1,591,100
2,600,000 646,700 862,200 1,077,800 1,293,300 1,508,900 1,724,500
2,800,000 696,700 928,900 1,161,100 1,393,400 1,625,600 1,857,800
Covered compensation includes regular annual earnings, dividend equivalents
paid on non-vested CEC units, amounts paid under the Company's Achievement Award
Program, amounts paid under the Company's Executive Incentive Plan and amounts
deferred under the Company's Executive Income Deferral Plan. The calculation of
retirement benefits is based upon final average earnings (the average of the
highest covered compensation during the five consecutive years out of the last
ten years of employment with the Company). The benefits are subject to an offset
based on the Age 65 Primary Social Security Benefit. Five-Year Average Covered
Compensation for the
16
18
Named Officers as of the end of the last fiscal year is: Mr. R. S. Larsen
$2,460,934; Mr. R. N. Wilson $1,768,189; Mr. R. G. Gelbman $938,611; Mr. J. T.
Lenehan $877,718; and Mr. C. A. Koffmann $870,425. The approximate years of
service for each Named Officer as of the end of the last fiscal year is: Mr. R.
S. Larsen 35 years; Mr. R. N. Wilson 34 years; Mr. R. G. Gelbman 27 years; Mr.
J. T. Lenehan 22 years; and Mr. C. A. Koffmann 10 years.
As permitted by the Employee Retirement Income Security Act of 1974, the
Company has adopted a supplemental plan which is designed to provide the amount
of retirement benefit which cannot be paid from the Retirement Plan by reason of
certain Internal Revenue Code limitations on qualified plan benefits. The
amounts shown in the Pension Plan Table include the amounts payable under the
supplemental plan.
APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed PricewaterhouseCoopers LLP as the
independent auditors for the Company and its subsidiaries for the fiscal year
1999. Shareowner ratification of the appointment is not required under the laws
of the State of New Jersey, but the Board has decided to ascertain the position
of the shareowners on the appointment. The Board of Directors will reconsider
the appointment if it is not ratified. The affirmative vote of a majority of the
shares voted at the meeting is required for ratification.
Representatives of PricewaterhouseCoopers LLP are expected to be present at
the Annual Meeting of Shareowners and will be allowed to make a statement if
they wish. Additionally, they will be available to respond to appropriate
questions from shareowners during the meeting.
OTHER MATTERS
The Board of Directors does not intend to bring other matters before the
meeting except items incident to the conduct of the meeting, and the Company has
not received timely notice from any shareowner, under the rules of the
Securities and Exchange Commission, of an intent to present a proposal at the
meeting. On any matter properly brought before the meeting by the Board or by
others, the persons named as proxies in the accompanying proxy, or their
substitutes, will vote in accordance with their best judgment.
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19
LOGO NOTICE OF
1999 ANNUAL
MEETING AND
PROXY
STATEMENT
20
PROXY
[JOHNSON & JOHNSON LOGO]
PROXY SOLICITED BY THE BOARD OF DIRECTORS FOR THE
ANNUAL MEETING OF SHAREOWNERS ON APRIL 22, 1999
The undersigned hereby appoints R.J. Darretta, R.S. Fine and R.N. Wilson
and each or any of them as proxies, with full power of substitution and
revocation, to represent the undersigned and to vote all shares of the Common
Stock of Johnson & Johnson which the undersigned is entitled to vote at the
Annual Meeting of Shareowners of the Company to be held on April 22, 1999 at
10:00 a.m. at the Hyatt Regency Hotel, Two Albany Street, New Brunswick, New
Jersey, and any adjournments thereof, upon the matters listed on the reverse
side hereof and, in their discretion, upon such other matters as may properly
come before the meeting. The proxies appointed hereby may act by a majority of
said proxies present at the meeting (or if only one is present, by that one).
(change of address/comments)
Election of Directors. Nominees:
----------------------------------------
Gerard N. Burrow, Joan G. Cooney,
James G. Cullen, M. Judah Folkman, ----------------------------------------
Ann D. Jordan, Arnold G. Langbo,
Ralph S. Larsen, John S. Mayo, ----------------------------------------
Paul J. Rizzo, Henry B. Schacht,
Maxine F. Singer, John W. Snow, ----------------------------------------
Robert N. Wilson (If you have written in the above space,
please mark the corresponding box on the
reverse side of this card)
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICES BY MARKING THE APPROPRIATE BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATIONS. THE PROXIES CANNOT
VOTE YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
SEE REVERSE SIDE
- --------------------------------------------------------------------------------
DETACH PROXY CARD HERE
21
X Please mark your
votes as in this
example.
This proxy when properly executed will be voted in the manner directed herein.
If no direction is made, this proxy will be voted FOR election of directors and
FOR proposal 2.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
FOR WITHHELD
1. Election of
Directors
(see reverse)
For, except vote withheld from the following nominee(s):
- -------------------------------------------------------
FOR AGAINST ABSTAIN
2. Ratification of
appointment of
PricewaterhouseCoopers LLP
as independent auditors.
Change of Address/Comments on Reverse Side.
The signer hereby revokes all proxies
heretofore given by the signer to vote at
said meeting or any adjournments thereof.
Please sign exactly as name appears hereon.
Joint owners should each sign. When signing
as attorney, executor, administrator, trustee
or guardian, please give full title as such.
-------------------------------------------
-------------------------------------------
SIGNATURE(S) DATE
- ------------------------------------------------------------------------------
/\ PLEASE CAREFULLY DETACH HERE AND RETURN THIS PROXY /\
IN THE ENCLOSED REPLY ENVELOPE.
[JOHNSON & JOHNSON LOGO,
The Signature of Quality(R)]