Carter Wallace Inc

SECURITIES AND EXCHANGE COMMISSION

FORM 10-K405 Annual report pursuant to section 13 and 15(d), Regulation S-K Item 405

Filing Date: 2000-06-21 | Period of Report: 2000-03-31 SEC Accession No. 0000890163-00-000282

(HTML Version on secdatabase.com)

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D. C. 20549 FORM 10-K

[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the fiscal year ended MARCH 31, 2000 Commission File Number 1-5910

CARTER-WALLACE, INC. ------(Exact name of registrant as specified in its charter)

DELAWARE 13-4986583 ------(State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization)

1345 AVENUE OF THE AMERICAS, NEW YORK, NY 10105 ------(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: 212-339-5000 Securities registered pursuant to Section 12(b) of the Act:

NAME OF EACH EXCHANGE TITLE OF EACH CLASS ON WHICH REGISTERED ------Common Stock New York Stock Exchange Par value $1.00 per share

Securities registered pursuant to Section 12(g) of the Act:

Class B Common Stock, par value $1.00 per share ------(Title of Class)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes [X] No [ ]

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K of any amendment to this Form 10-K. (X)

The number of shares of the registrant's Common Stock and Class B Common Stock outstanding at June 5, 2000 was 32,981,400 and 12,269,300, respectively.

The aggregate market value of voting stock held by non-affiliates of the registrant as of June 5, 2000 was approximately $428,257,000.

DOCUMENTS INCORPORATED BY REFERENCE

Annual Report to Stockholders for the fiscal year ended March 31, 2000 Parts I & II

Proxy Statement for the Annual Meeting of Stockholders to be held July 18, 2000 Parts III & IV

PART I

ITEM 1. BUSINESS

Carter-Wallace, Inc. (the "Company") is engaged in the manufacture and sale of a diversified line of products in the Domestic Consumer Products, Domestic Health Care and International segments. Additional information is presented on page 11 "Description of Business Segments" of the 2000 Annual Report to Stockholders and is herein expressly incorporated by reference.

BUSINESS SEGMENTS AND GEOGRAPHIC DATA

Financial information about the Company's business segments and geographic areas for the three years ended March 31, 2000 is presented on page 8 under the caption "Management's Discussion and Analysis of Results of Operations and Financial Condition - Net Sales and Earnings" and also on pages 24 and 25, note 11, "Business Segments" of the Notes to Consolidated Financial Statements, both included in the 2000 Annual Report to Stockholders and herein expressly incorporated by reference.

FOREIGN OPERATIONS

Foreign operations are generally subject to certain political and economic risks that are not present in domestic operations. Such risks may include expropriation of assets, restrictions on earnings remittances and fluctuating exchange rates. Changes in foreign exchange rates had the effect of decreasing sales by $10,400,000 in the fiscal year ended March 31, 2000 in comparison to the prior year. Additional information is presented on page 18, note 4, "Foreign Operations" of the Notes to Consolidated Financial Statements in the 2000 Annual Report to Stockholders and is herein expressly incorporated by reference.

The three business segments in which the Company operates are extremely competitive and include larger corporations with greater resources for research, product development and promotion. The Company competes on the basis of price, advertising, promotion, quality of product and other methods relevant to the business. In fiscal 2000, the Company's "Arrid" line of anti-perspirants and deodorants is believed to have accounted for an estimated 6.0% share of the domestic anti-perspirant and deodorant market. The Company's worldwide antiperspirant and deodorant sales were approximately $105,900,000, $101,600,000, and $105,800,000 in the fiscal years ended March 31, 2000, 1999 and 1998, respectively. The "Trojan", "Class Act" and "Naturalamb" condom brands are estimated to have accounted for over 68% of total domestic retail condom sales. The Company's worldwide condom sales were approximately $123,600,000, $114,100,000, and $104,700,000 in the fiscal years ended March 31, 2000, 1999 and 1998, respectively. Additional information is presented on page 8 under the caption "Management's Discussion and Analysis of Results of Operations and Financial Condition - Net Sales and Earnings" in the 2000 Annual Report to Stockholders and is herein expressly incorporated by reference.

RAW MATERIALS

The Company's major raw materials are chemicals, plastics, latex, steel cans and packaging materials. These materials are generally available from several sources and the Company has had no significant supply problems to date. The Company generally has two or more approved suppliers for production materials and issues purchase commitments to provide its suppliers with adequate lead time.

PATENTS AND LICENSES

The Company owns or is licensed under a number of patents and patent applications covering certain of its products. The expiration or any other change in any of these patents or patent applications will not materially affect the Company's business. Royalty income does not constitute a material portion of total revenue.

FELBATOL (FELBAMATE)

Information regarding the effect of "Felbatol" matters on the Company's business is presented on page 9 under the caption "Management's Discussion and Analysis of Results of Operations and Financial Condition - Felbatol (felbamate)", and on Page 29 in note 16 "Felbatol (felbamate)" of the Notes to Consolidated Financial Statements, all included in the 2000 Annual Report to Stockholders and herein expressly incorporated by reference.

ENVIRONMENTAL MATTER

Information regarding the environmental matter is presented on pages 27 and 28 in note 14, "Litigation Including Environmental Matter" of the Notes to Consolidated Financial Statements, included in the 2000 Annual Report to Stockholders and herein expressly incorporated by reference.

Expenditures for research and development totaled $28,508,000 in 2000, $25,846,000 in 1999 and $28,785,000 in 1998. Research and development expenses increased in 2000 by $2,662,000 or 10.3% due mostly to increased spending in the Domestic Health Care segment, including higher spending for taurolidine. Research and development expenses in 1999 decreased by $2,939,000 or 10.2%, primarily as a result of lower spending in the Domestic Consumer Products segment related to non-recurring prior year employee termination costs.

Research at independent facilities determined that taurolidine induced cell death in numerous human cancer cells in vitro. These developments prompted the Company to initiate an R&D program directed at multiple cancer cell lines to determine if taurolidine has clinically important antineoplastic activity. An Investigational New Drug Application (IND) was filed with and accepted by the FDA. A clinical trial in patients with ovarian cancer is in progress. Additional clinical trials in patients with other malignancies, including leukemia and brain cancer, are planned for the coming year.

Two multi-center Phase III studies showed that "Astelin" Nasal Spray is effective for treating vasomotor (perennial, nonallergic) rhinitis. A Supplemental New Drug Application was submitted to the FDA for use in adults with vasomotor rhinitis. If approved, "Astelin" Nasal Spray would be indicated for both allergic and nonallergic vasomotor rhinitis. Another Supplemental New Drug Application was submitted for "Astelin" Nasal Spray's use for children under 12 years old and FDA approval was received in May 2000. The "Astelin" tablet NDA for allergic rhinitis is pending at the FDA. The Company has not decided whether to seek final approval for this NDA.

Approximately 125 employees are employed in research and development activities.

EMPLOYEES

The Company, together with its subsidiaries, employed approximately 3,320 people worldwide at March 31, 2000.

ACQUISITIONS

Information regarding acquisitions is presented on page 24 in note 9, "Acquisitions" of the Notes to Consolidated Financial Statements, included in the 2000 Annual Report to Stockholders and is herein expressly incorporated by reference.

ITEM 2. PROPERTIES

The executive offices of the Company are located at 1345 Avenue of the Americas, New York, New York, in space leased until May, 2011. A portion of this space has been subleased. The following are the other principal facilities of the Company:

* OFFICES ONLY

The Company has agreements with several companies throughout the world for the manufacture of certain products to its specifications. The Company has several other short-term leases for manufacturing plants, warehousing space and sales offices. With minor exceptions, all facilities are operating at normal capacity.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document An expansion of the Company's condom manufacturing facility in Colonial Heights, Virginia was approved in fiscal 1998. The expansion was completed on time in fiscal 2000.

In June 2000 the Company entered into an agreement to sell two parcels of vacant land adjacent to its Cranbury, NJ facility totalling approximately 210 acres. The closings of these transactions are contingent upon certain approvals being obtained and the satisfactory resolution of other conditions. No assurance can be given that the closings will take place. The Company does not anticipate that these transactions will close during the fiscal year ending March 31, 2001.

The total proceeds from these land sales will be approximately $22,050,000, less commissions and other expenses, payable one-third at closing with the balance due in two equal annual installments with interest. A down payment of $500,000 has been received as escrow. The cost basis for the land being sold is approximately $1,000,000.

ITEM 3. LEGAL PROCEEDINGS

Information regarding Legal Proceedings involving the Company is presented on pages 27 and 28 in note 14, "Litigation Including Environmental Matter" of the Notes to Consolidated Financial Statements, included in the 2000 Annual Report to Stockholders and herein expressly incorporated by reference.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

Not applicable.

EXECUTIVE OFFICERS OF THE REGISTRANT*

Executive Officers of the Registrant are as follows:

Each officer holds office until the first meeting of the Board of Directors following each Annual Meeting of the Stockholders and until his successor has been duly elected and qualified (except that the Board of Directors may at any meeting elect additional officers), unless his term is earlier terminated through death, resignation, removal or otherwise. The next Annual Meeting of the Stockholders is scheduled to be held July 18, 2000.

All executive officers have held their present office for the last five years except those noted below:

Thomas G. Gerstmyer was appointed Corporate Vice President, Pharmaceuticals, U.S. in January, 1999. He was appointed President, Wallace Laboratories Division in August, 1998. Mr. Gerstmyer was previously Vice President of Marketing, Wallace Laboratories since prior to 1995.

James C. Costin, M.D., was appointed Corporate Vice President, Medical and Scientific Affairs in January, 1999. Dr. Costin will continue to be responsible for the Wallace Laboratories' Research and Development department, where he was previously Vice President, Research and Development, a position he held since prior to 1995.

Ralph Levine was appointed President and Chief Operating Officer in April, 1997. Mr. Levine was previously Vice President, Secretary and General Counsel since prior to 1995.

Paul A. Veteri was appointed Executive Vice President and Chief Financial Officer, in April, 1997. Mr. Veteri was previously Vice President and Chief Financial Officer since prior to 1995.

Stephen R. Lang was appointed Corporate Vice President in March, 1997 and Secretary and General Counsel in April, 1997. Mr. Lang was previously a Partner and Chairman of the Litigation Department of Whitman Breed Abbott & Morgan LLP

Mark Wertlieb was appointed Corporate Vice President, Taxes in August, 1996. Mr. Wertlieb was previously a Tax Partner at KPMG LLP since prior to 1995.

T. Rosie Albright was appointed Corporate Vice President, Consumer Products, U.S. and President, Carter Products Division, in December, 1995. Ms. Albright was previously General Manager and Executive Vice President, Beauty Care with Revlon, Inc. prior to 1995.

Adrian J. L. Huns was appointed Corporate Vice President, International and President, International Division in May, 1996. Mr. Huns was Managing Director of Carter-Wallace Ltd., a subsidiary of Carter-Wallace, Inc., since prior to 1995.

PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Information required by this item is presented on pages 1 and 7 of the 2000 Annual Report to Stockholders and is herein expressly incorporated by reference.

ITEM 6. SELECTED FINANCIAL DATA

Information required by this item is incorporated herein by reference to page 7 of the 2000 Annual Report to Stockholders.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION

Information required by this item is incorporated herein by reference to pages 8 through 10 of the 2000 Annual Report to Stockholders.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT FINANCIAL MARKET RISK

A portion of the Company's revenues and earnings are exposed to changes in foreign exchange rates. Where practical, the Company seeks to relate expected local currency revenues with local currency costs and local currency assets with local currency liabilities.

The Company's interest bearing investments and a portion of its debt are subject to interest rate risk. Changes in interest rates could affect interest income and expense in future periods. The Company invests on a short-term basis.

There has been no material impact on operations from financial market risk exposure during the year ended March 31, 2000.

PART III

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

Information required by this item is incorporated herein by reference to pages

ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

Not applicable.

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

Information with respect to Directors of the Company is incorporated by reference to the Company's Proxy Statement, dated June 16, 2000, for the Annual Meeting of Stockholders to be held July 18, 2000, under the captions "Stock Ownership", "Election of Directors" and "Board of Directors and Committees".

Information with respect to Executive Officers of the Registrant is set forth under the heading "Executive Officers of the Registrant" in Part I on pages 5 and 6 of this Form 10-K.

ITEM 11. EXECUTIVE COMPENSATION

Information required by this item is incorporated herein by reference to the Company's Proxy Statement, dated June 16, 2000, for the Annual Meeting of Stockholders to be held July 18, 2000, under the caption "Executive Compensation and Other Information".

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Information pertaining to the security ownership of certain beneficial owners and management is incorporated herein by reference to the Company's Proxy Statement, dated June 16, 2000, for the Annual Meeting of Stockholders to be held July 18, 2000, under the captions "Voting Rights" and "Stock Ownership".

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE AND REPORTS ON FORM 8-K

(A)(1),(A)(2) FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

The financial statements and financial statement schedule filed as part of this report are listed or incorporated by reference in the "Index of Financial Statements and Financial Statement Schedule" on page 14 of this Form.

(A)(3) EXHIBITS

3.1 Certificate of Incorporation, as amended, of the Company (incorporated herein by reference to Exhibit 3.1 of the Company's

3.2 By-Laws of the Company, as amended through 5/15/97 (incorporated herein by reference to Exhibit 3.2 of the Company's Annual Report on Form 10K for the fiscal year ended March 31, 1998).

4.1 Instruments defining the rights of security holders, including indentures -- The Company agrees to furnish to the Commission upon request a copy of each instrument pursuant to which long-term debt of the Company and its subsidiaries not exceeding 10% of total assets of the Company and its consolidated subsidiaries is authorized.

10.2 1977 Restricted Stock Award Plan, as amended (incorporated herein by reference to Exhibit 10.2 of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1990).

10.3 Employees' Retirement Plan, as amended (incorporated herein by reference to Exhibit 10.3 of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1993).

10.4 Description of Profit Sharing Plan

10.5 Executives' Additional Compensation Plan (incorporated herein by reference to the description of such plan set forth in the Company's Proxy Statement dated June 18, 1993, for the Annual Meeting of Stockholders to be held July 20, 1993, under the caption "Executive Compensation and Other Information").

10.6 Employment Agreement, dated June 4, 1998, between the Company and Ralph Levine (incorporated herein by reference to Exhibit 10.6 of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1998).

(A)(3) EXHIBITS (CONT'D)

10.6(A) Amendment, dated January 27, 2000, to the Employment Agreement dated June 4, 1998 between the Company and Ralph Levine.

10.7 Employment Agreement, dated June 4, 1998, between the Company and Paul A. Veteri (incorporated herein by reference to Exhibit 10.7 of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1998).

10.7(A) Amendment, dated January 27, 2000, to the Employment Agreement dated June 4, 1998 between the Company and Paul A. Veteri

10.10 Supplemental Death Benefit Agreement, as amended (incorporated herein by reference to Exhibit 10.10 of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1993).

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 10.11 Lease Agreement, dated December 2, 1988, between the Company and Fisher - Sixth Avenue Company and Hawaiian Sixth Avenue Corporation (incorporated herein by reference to Exhibit 10.10 of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1989).

10.12 Corporate Officer Medical Expense Reimbursement Plan (incorporated herein by reference to Exhibit 10.12 of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1993).

10.13 Executive Medical Expense Reimbursement Plan, as amended (incorporated herein by reference to Exhibit 10.13 to the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1993).

10.14 Executive Pension Benefits Plan, as amended (incorporated herein by reference to Exhibit 10.14 of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1995).

10.15 Executive Savings Plan (incorporated herein by reference to Exhibit 10.15 of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1995).

10.16 Amendment to Revolving Credit Agreement, dated as of October 1, 1995 (incorporated herein by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 1995).

10.17 Note Agreement, dated as of December 1, 1995 (incorporated herein by reference to the Company's Quarterly Report on Form 10-Q for the quarter ended December 31, 1995).

10.18 1996 Long-Term Incentive Plan, as amended (incorporated herein by reference to Exhibit 10.18 of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1999)

(A)(3) EXHIBITS (CONT'D)

10.19 Employment Agreement, dated September 11, 1996, between the Company and T. Rosie Albright (incorporated herein by reference to Exhibit 10.19 of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1997).

10.21 Letter Agreement, dated September 14, 1998, between the Company and T. Rosie Albright (incorporated herein by reference to Exhibit 10.21 of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1999).

10.21(A) Amendment, dated January 27, 2000, to the Letter Agreement, dated September 14, 1998, between the Company and T. Rosie Albright.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 10.22 Letter Agreement, dated June 4, 1998, between the Company and Stephen R. Lang (incorporated herein by reference to Exhibit 10.22 of the Company's Annual Report on Form 10-K for the fiscal year ended March 31, 1999).

10.22(A) Amendment, dated January 27, 2000, to the Letter Agreement, dated June 4, 1998 between the Company and Stephen R. Lang.

10.23 Consulting Agreement dated July 21, 1999 between the Company and Henry H. Hoyt, Jr.

10.23(A) Amendment, dated January 27, 2000, to the Consulting Agreement dated July 21, 1999 between the Company and Henry H. Hoyt, Jr.

10.24 Letter Agreement, dated January 1, 1999 between the Company and Thomas G. Gerstmyer.

10.24(A) Amendment, dated January 27, 2000, to the Letter Agreement dated January 1,1999, between the Company and Thomas G. Gerstmyer

13 Annual Report to Stockholders for the fiscal year ended March 31, 2000

21 Subsidiaries.

23 KPMG LLP Independent Auditors' Consent

27 Financial Data Schedule (EDGAR filing only)

(B) REPORTS ON FORM 8-K

No reports on Form 8-K have been filed during the quarter ended March 31, 2000.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CARTER-WALLACE, INC. (Registrant)

DATED: June 13, 2000 BY: /s/Ralph Levine ------Ralph Levine President and Chief Operating Officer

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the respective dates indicated:

CARTER-WALLACE, INC. AND SUBSIDIARIES

INDEX OF FINANCIAL STATEMENTS AND FINANCIAL STATEMENT SCHEDULE

The consolidated financial statements and the related report of KPMG LLP dated May 10, 2000 appearing on pages 12 through 30 of the 2000 Annual Report to Stockholders are incorporated herein by reference in this Form 10-K Annual Report.

The following are set forth in this Annual Report on Form 10-K:

All other financial statement schedules are omitted because they are not applicable or not required or because the information is included in the consolidated financial statements or related notes.

INDEPENDENT AUDITORS' REPORT

The Board of Directors and Stockholders Carter-Wallace, Inc.:

Under date of May 10, 2000, we reported on the consolidated balance sheets of Carter-Wallace, Inc. and subsidiaries as of March 31, 2000 and 1999, and the related consolidated statements of earnings, retained earnings and comprehensive earnings, and cash flows, for each of the years in the three-year period ended

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document March 31, 2000, as contained in the 2000 Annual Report to Stockholders. These consolidated financial statements and our report thereon are incorporated by reference in the Annual Report on Form 10-K for the year ended March 31, 2000. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related financial statement schedule as listed in the accompanying index. This financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement schedule based on our audits.

In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

KPMG LLP

New York, New York May 10, 2000 14

SCHEDULE II

CARTER-WALLACE, INC. AND SUBSIDIARIES

Valuation and Qualifying Accounts Three Years Ended March 31, 2000 (in thousands of dollars)

NOTES:

(A) Accounts written off and recovered. (B) Net discounts allowed to customers.

PROFIT SHARING PLAN

The Profit Sharing Plan of the Company provides for the award of bonuses to corporate and divisional officers and managers, including members of the Executive Committee. The amount of the bonuses awarded is determined by the achievement of profit goals set by the Executive Committee. In determining the award, the Executive Committee will take into consideration any events that are not merit related.

EXHIBIT 10.6(a)

January 27, 2000

Mr. Ralph Levine 930 Park Avenue Apartment 7-N New York, New York 10028

Dear Ralph:

Reference is made to the Executive Employment Agreement, dated as of June 4, 1998, between Carter-Wallace, Inc. (the "Company") and you (the "Agreement"). The Board of Directors of the Company has determined that it is appropriate to amend Section 8(e) of the Agreement in light of the fact that the target annual incentive award opportunity is currently greater than 56.25% of base salary and to amend Section 9(b) of the Agreement to correct an oversight that would result in no bonus being paid for the year of termination in the event of a termination by the Company without cause or by you for good reason.

Accordingly, upon confirmation by you of your agreement thereto, the Agreement shall be amended in the following respects:

(1) Clause (ii) of Section 8(e) of the Agreement shall be amended to read in its entirety as follows:

(ii) a decrease in the target annual incentive award opportunity below the highest (as a percentage of base salary) opportunity level established for any of the three preceding fiscal years;

(2) Clause (i) of Section 9(b) of the Agreement shall be amended to read in its entirety as follows:

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document bonus (based on assumed attainment of 100% of the performance objectives) for the Termination Year by a fraction, the numerator of which is the number of months (treating any partial month as a full month for this purpose) in the Termination Year during which the Executive was employed and the denominator of which is 12;

Mr. Ralph Levine -2- January 27, 2000

Upon your confirmation of your agreement with the amendments to the Agreement set forth above by signing and returning to the Secretary of the Company the copy of this letter provided, such amendments shall take effect immediately.

Very truly yours,

CARTER-WALLACE, INC.

------Chairman of the Board

Confirmed and agreed this ____ day of January, 2000

------Ralph Levine

EXHIBIT 10.7(a)

January 27, 2000

Mr. Paul A. Veteri 21 Londonderry Drive Greenwich, Connecticut 06830

Dear Paul:

Accordingly, upon confirmation by you of your agreement thereto, the Agreement shall be amended in the following respects:

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (1) Clause (ii) of Section 8(e) of the Agreement shall be amended to read in its entirety as follows:

(ii) a decrease in the target annual incentive award opportunity below the highest (as a percentage of base salary) opportunity level established for any of the three preceding fiscal years;

(2) Clause (i) of Section 9(b) of the Agreement shall be amended to read in its entirety as follows:

(i) The Accrued Amounts plus an amount in lieu of a bonus for the Termination Year determined by multiplying the greater of (A) the highest bonus earned by the Executive in any of the three full fiscal years preceding the date of termination and (B) the target bonus (based on assumed attainment of 100% of the performance objectives) for the Termination Year by a fraction, the numerator of which is the number of months (treating any partial month as a full month for this purpose) in the Termination Year during which the Executive was employed and the denominator of which is 12;

Very truly yours,

CARTER-WALLACE, INC.

------Chairman of the Board

Confirmed and agreed this ___ day of January, 2000

------Paul A. Veteri

EXHIBIT 10.21(a)

January 27, 2000

Ms. T. Rosie Albright 85 Mayapple Road Stamford, Connecticut 06903

Dear Rosie:

Reference is made to the letter agreement, dated as of September 14, 1998, between Carter-Wallace, Inc. (the "Company") and you (the "Agreement")

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document relating to certain compensation arrangements in the event of a pending or threatened Change in Control (as defined in the Agreement). The Board of Directors of the Company has determined that it is appropriate to amend Section 4 of the Agreement to clarify how the pro-rated bonus referred to therein for the year in which termination of employment occurs would be calculated.

Accordingly, upon confirmation by you of your agreement thereto, the Agreement shall be amended in the following respects:

(1) Clause (i) of Section 4(a) of the Agreement shall be amended to read in its entirety as follows:

(i) The sum of (A) the full amount due to you and not theretofore paid for base salary up to the date of such termination, (B) the amount of any accrued but unpaid bonus on account of the last full fiscal year preceding the date of such termination, (C) an amount in lieu of a bonus for the year in which the termination of your employment occurs determined by multiplying the greater of (x) the target bonus (based on assumed attainment of 100% of the performance objectives) for the year in which the termination occurs and (y) the highest bonus earned by you in any of the three full fiscal years preceding the year in which the termination occurs by a fraction, the numerator of which is the number of months (treating any partial month as a full month for this purpose) in the year in which termination occurs during which you were employed by the Company and the denominator of which is twelve and (D) accrued vacation pay;

(2) Subsection (b) of Section 4 shall be deleted in its entirety and subsections (c), (d), (e), and (f) shall be relettered (b), (c), (d), and (e), respectively.

Upon your confirmation of your agreement with the amendment to the Agreement set forth above by signing and returning to the Secretary of the Company the copy of this letter provided, such amendment shall take effect immediately.

Very truly yours,

CARTER-WALLACE, INC.

------Chairman of the Board

Confirmed and agreed this ___ day of January, 2000

------T. Rosie Albright

EXHIBIT 10.22(a)

Stephen R. Lang, Esq. 1020 Park Avenue, Apt. 2D New York, New York 10028

Dear Steve:

Reference is made to the letter agreement, dated as of June 4, 1998, between Carter-Wallace, Inc. (the "Company") and you (the "Agreement") relating to certain compensation arrangements in the event of a pending or threatened Change in Control (as defined in the Agreement). The Board of Directors of the Company has determined that it is appropriate to amend Section 4 of the Agreement to clarify how the pro-rated bonus referred to therein for the year in which termination of employment occurs would be calculated.

Accordingly, upon confirmation by you of your agreement thereto, the Agreement shall be amended in the following respects:

(1) Clause (i) of Section 4(a) of the Agreement shall be amended to read in its entirety as follows:

(2) Subsection (b) of Section 4 shall be deleted in its entirety and subsections (c), (d), (e), and (f) shall be relettered (b), (c), (d), and (e), respectively.

Very truly yours,

CARTER-WALLACE, INC.

------Chairman of the Board

------Stephen R. Lang

EXHIBIT 10.23

CARTER-WALLACE, INC.

CONSULTING AGREEMENT FOR HENRY H. HOYT, JR

CONSULTING AGREEMENT

THIS CONSULTING AGREEMENT by and between CARTER-WALLACE, INC., a Delaware corporation (the "Company"), and Henry H. Hoyt, Jr. ("Executive") shall become effective as of ______, 1999 (the "Effective Date").

W I T N E S S E T H

WHEREAS, Executive has served the Company in the position of Chairman of the Board and Chief Executive Officer and, in those positions, Executive has made substantial contributions to the success of the Company;

WHEREAS, the Company wishes to secure the services of Executive for a period of years in the event that Executive retires from employment with the Company, and to otherwise promote stability and continuity in management and in any management transition; and

WHEREAS, the Executive desires to accept the benefits and obligations of this Agreement during his continued employment and during the period following employment during which consulting services are to be provided hereunder, subject to the terms and conditions herein set forth.

NOW, THEREFORE, in consideration of the foregoing, the mutual covenants contained herein, and other good and valuable consideration the receipt and adequacy of which the Company and Executive each hereby acknowledge, the Company and Executive hereby agree as follows:

1. DEFINITIONS.

(a) "Cause" shall mean (i) the willful and material breach of Sections 7 or 8 of this Agreement by Executive; (ii) Executive's conviction of a felony; or (iii) Executive's engagement in conduct that constitutes willful gross neglect or willful gross misconduct in carrying out his duties as an employee of

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document the Company or as a consultant (under Section 3 of this Agreement), which results in material harm to the financial condition or reputation of the Company. For purposes of this Agreement, an act or failure to act on Executive's part shall be considered "willful" if it was done or omitted to be done by Executive not in good faith, and shall not include any act or failure to act resulting from any incapacity of Executive. Notwithstanding the foregoing, a termination for "Cause" shall not take effect unless Executive has been given written notice by the Company of its intention to terminate Executive for "Cause," such notice (A) to state in detail the particular act or acts or failure or failures to act that constitute the grounds on which the proposed termination for "Cause" is based and (B) to be given within 90 days of the Company's learning of such act or acts or failure or failures to act. Executive shall have 20 days after the date that such written notice has been given in which to cure such conduct, to the extent such cure is possible. If Executive fails to cure such conduct, Executive shall then be entitled to a hearing before the Board of Directors of the Company (the "Board") at which Executive and his counsel are entitled to appear. Such hearing shall be held within 25 days of such notice to Executive, provided Executive requests such hearing within 10 days of the written notice from the Company of the intention to terminate Executive for "Cause." If, within five days following such hearing, Executive is furnished written notice by the Board confirming that, in its judgment, grounds for "Cause" on the basis of the original notice exist, Executive shall thereupon be terminated for "Cause."

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(b) A "Change in Control" shall be deemed to have occurred if, after the Effective Date:

(i) any Person (other than the Company, any trustee or other fiduciary holding securities under any employee benefit plan of the Company, or any company owned, directly or indirectly, by the stockholders of the Company immediately prior to the occurrence with respect to which the evaluation is being made in substantially the same proportions as their ownership of the common stock of the Company) becomes the Beneficial Owner (except that a Person shall be deemed to be the Beneficial Owner of all shares that any such Person has the right to acquire pursuant to any agreement or arrangement or upon exercise of conversion rights, warrants or options or otherwise, without regard to the sixty day period referred to in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company or any Significant Subsidiary (as defined below), representing 25% or more of the combined voting power of the Company's or such Subsidiary's then outstanding securities; provided, however, that such event shall not constitute a Change in Control unless or until the percentage of such securities owned beneficially, directly or indirectly, by such Person is equal to or more than all such securities owned beneficially, directly or indirectly, by the Hoyt Family;

(ii) during any period of two consecutive years (or shorter period beginning on the Effective Date), individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document the Company to effect a transaction described in clause (i), (iii) or (iv) of this paragraph) whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of such period or whose election or nomination for election was previously so approved but excluding for this purpose any such new director whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of an individual, corporation, partnership, group, associate or other entity or Person other than the Board, cease for any reason to constitute at least a majority of the Board; provided, however, that such event shall not constitute a Change in Control unless or until the percentage of voting securities of the Company owned beneficially, directly or indirectly, by the Hoyt Family is less than 50% of all such outstanding securities;

(iii) the consummation of a merger or consolidation of the Company or any subsidiary or subsidiaries owning directly or indirectly all or substantially all of the consolidated assets of the Company (individually and collectively, a "Significant Subsidiary") with any other entity, other than a merger or consolidation which would result in the voting securities of the Company or a Significant Subsidiary outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving or resulting entity) more than 50% of the combined voting power of the surviving or resulting entity outstanding immediately after such merger or consolidation;

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(iv) the stockholders of the Company approve a plan or agreement for the sale or disposition of all or substantially all of the consolidated assets of the Company (other than such a sale or disposition immediately after which such assets will be owned directly or indirectly by the stockholders of the Company in substantially the same proportions as their ownership of the common stock of the Company immediately prior to such sale or disposition), in which case the Board shall determine the effective date of the Change in Control resulting therefrom; or

(v) any other event occurs which the Board determines, in its discretion, would materially alter the structure of the Company or its ownership.

For purposes of this definition:

(A) The term "Beneficial Owner" shall have the meaning ascribed to such term in Rule 13d-3 under the Exchange Act (including any successor to such Rule).

(B) The term "Exchange Act" means the Securities Exchange

(C) The term "Person" shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange Act and used in Sections 13(d) and 14(d) thereof, including "group" as defined in Section 13(d) thereof.

(D) The term the "Hoyt Family" shall mean the family of Henry H. Hoyt, Sr., his descendants, and members of such descendants' families.

(d) "Continuation Period" shall mean any period following a Change in Control during which Executive has been invited either (i) to continue employment on terms similar to the terms of Executive's employment immediately prior to the Change in Control or (ii) to perform or continue performing the consulting services specified in Section 3 hereof during the Consulting Term, provided that, in either case, Executive has agreed in writing to accept such continued employment or consulting services arrangement. The Continuation Period shall in any event end on the Executive's death or Disability.

(e) "Disability" shall mean the inability of Executive to perform the services for the Company and its subsidiaries required by his employment with the Company or pursuant to Section 3 hereof during the Consulting Term due to any medically determinable physical and/or mental incapacity or disability which is permanent.

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(f) "Good Reason" shall mean (i) the assignment to Executive of any duties inconsistent in any respect with Executive's position (including status, offices, titles and reporting relationships), authority, duties or responsibilities as (A) a Director and/or the Chairman of the Board while Executive serves in those capacities during the Consulting Term (including any failure of Executive to be elected or appointed as a Director or Chairman of the Board unless Executive shall have declined to serve or continue to serve as a Director or Chairman of the Board) or (B) a consultant performing services in accordance with Section 3 hereof, or any other action by the Company that results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith that is remedied by the Company promptly after receipt of notice thereof given by Executive; (ii) a change in the location where consulting services are to be performed outside the area described in Section 3(b) of this Agreement; (iii) any failure of the Company to comply with and satisfy Section 13(c) of this Agreement or any other material breach of this Agreement by the Company; or (iv) the occurrence of a Change in Control, whether during or prior to the Consulting Term and whether or not Executive has agreed to any Continuation Period following such Change in Control.

(g) "Retirement" (and "Retire" or "Retired") shall mean a termination

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document of Executive's employment with the Company and its subsidiaries for any reason other than death, Disability, or termination by the Company for Cause; provided, however, that a termination which follows a Change in Control that resulted in or will result in payment to Executive under Section 6 shall not constitute a "Retirement" for purposes of this Agreement. A voluntary termination of employment by Executive, whether or not for Good Reason, will constitute a Retirement unless it follows a Change in Control that resulted in or will result in payment to Executive under Section 6.

2. TERM OF AGREEMENT.

The term of this Agreement (the "Term") shall be the period commencing on the Effective Date and ending on the date which is the earliest of five years after termination of Executive's employment or Executive's death or Disability.

3. CONSULTING SERVICES.

The provisions of this Section 3 will apply during the Consulting Term:

(a) Consulting Term. For purposes of this Agreement, the "Consulting Term" shall be the period from the date of Executive's Retirement during the Term until the earliest of (i) the fifth anniversary of such Retirement date, (ii) Executive's death or Disability, (iii) termination of Executive's consulting services by the Company for Cause, (iv) termination of Executive's consulting services by Executive for Good Reason, or (v) a Change in Control or, if Executive has agreed to a Continuation Period relating to a Change in Control (including a Change in Control prior to Retirement), at the end of such Continuation Period. In the event that Executive's termination of employment with the Company does not constitute a "Retirement," the Consulting Term shall be deemed to have never commenced.

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(b) Services of Executive. During the Consulting Term, Executive shall consult with the Company at the request of the Company during normal business hours, subject to reasonable advance notice, up to a maximum of five days per calendar month. Matters as to which Executive shall consult shall be specified by the Board, a committee of the Board, or the Chief Executive Officer, and Executive shall report to the Board, a Board committee, or the Chief Executive Officer. Such services shall be performed at the location where Executive was employed immediately prior to the commencement of the Consulting Term, or a location less than 25 miles from such original location, provided that Executive may agree in writing to designation of another location as the "original location" for purposes of this provision. In addition, during the Consulting Term the Company will use its best efforts to cause Executive to be nominated for election or reelection, or appointment or reappointment, as a Director of the Company and to be elected Chairman of the Board at any time Executive is serving as a Director, unless Executive shall have declined to serve or continue to serve as a Director or Chairman of the Board.

(c) Company Support. The Company will provide office space reasonably acceptable to Executive for use in the performance of his consulting services,

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document together with secretarial assistance and other facilities and amenities customary for the support of a provider of executive level services to the Company.

(d) Non-Exclusive Commitment. Except to the extent Executive may be limited under Sections 7 and 8, this Consulting Agreement and Executive's commitment under this Section 3 shall not restrict or limit Executive during or after the Consulting Term in making personal investments which are not in conflict with his duties to the Company and managing personal and family financial and legal affairs, (ii) in undertaking public speaking engagements, and (iii) in serving as a director of (or similar position with) any other business or any educational, charitable, community, civic, religious, or similar type of organization, so long as such activities do not preclude or render unlawful Executive's consulting service to the Company or service on the Board or otherwise materially inhibit the performance of Executive's duties under this Agreement or materially impair the business of the Company or its subsidiaries.

4. COMPENSATION FOR CONSULTING SERVICES.

As compensation for the services to be rendered hereunder by Executive during the Consulting Term, the Company agrees to pay to Executive the compensation set forth in this Section 4:

(a) Consulting Fee. The Company will pay to Executive during the Consulting Term a monthly cash consulting fee equal to 60% of the greater of (i) Executive's monthly salary in effect immediately prior to his Retirement or (ii) Executive's monthly salary in effect at the Effective Date. Such consulting fee shall be payable whether or not any consulting services are performed during the month.

(b) Non-Employee Director's Compensation. Executive shall be entitled to be paid any fees otherwise payable to a non-employee Director and, if applicable, to a non-employee Chairman of the Board, while serving in such capacities during the Consulting Term, and shall not be excluded from payment of such fees on account of the payment of consulting fees or other compensation under this Agreement.

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(c) Continued Participation in Employee Benefit Programs. To the extent permitted under any plan, program, practice or policy of the Company, during the Consulting Term the Company shall continue benefits to Executive and/or his family at least equal to those which would have been provided in accordance with the welfare benefit plans, programs, practices and policies of the Company if Executive's employment had not been terminated, including medical, dental, disability and group life insurance plans and programs, in accordance with the most favorable plans, practices, programs or policies of the Company during the 90-day period immediately preceding Executive's Retirement or, if more favorable, as in effect from time to time thereafter with respect to senior executives of the Company and their families.

(d) Payment Upon Termination of Consulting Term Due to Change in

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Control or Due to Termination by Executive for Good Reason. In the event that the Consulting Term ends upon a Change in Control or upon the end of a Continuation Period following a Change in Control, or upon any other event (including death or Disability) during such a Continuation Period, or upon a termination by Executive for Good Reason, the Company shall pay Executive a lump sum cash amount equal to (i) the amount of the monthly consulting fee specified in Section 4(a) times (ii) 60 minus the number of months for which the consulting fee specified in Section 4(a) has been paid.

(e) Reimbursement of Expenses. The Company will promptly reimburse Executive for all reasonable business expenses and disbursements incurred by Executive in the performance of Executive's duties during the Consulting Term, in a manner consistent with the Company's reimbursement policies for senior executives as in effect from time to time.

5. ADDITIONAL COMPENSATION FOR ENTRY INTO AGREEMENT.

As additional consideration for Executive's entry into this Agreement, the Company hereby agrees as follows:

(a) Terms of Outstanding Options. In the event of any termination of Executive's employment other than a termination by the Company for Cause, options granted by the Company and held by Executive at the termination date shall become fully vested and exercisable, and following such termination of Executive's employment, such options shall remain exercisable for the remainder of the ten-year stated term of such options, without regard to such termination by Executive.

(b) Terms of Outstanding Restricted Stock and Deferred Stock. In the event of any termination of Executive's employment other than a termination by the Company for Cause, restricted stock and deferred stock granted by the Company and held by Executive at the termination date shall become fully vested and non-forfeitable.

6. OBLIGATIONS OF THE COMPANY UPON A CHANGE IN CONTROL DURING EXECUTIVE'S EMPLOYMENT.

During the Term, in the event of a Change in Control while Executive remains employed by the Company, the Company shall pay to Executive a lump sum cash amount as follows:

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(ii) If there is a Continuation Period, at the end of such Continuation Period Executive shall be paid the amount of the monthly consulting fee that would have

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document otherwise been payable as specified in Section 4(a) times 60; provided, however, that if Executive has agreed to a Continuation Period that extends after termination of employment and which contemplates that Executive will provide consulting services pursuant to Section 3 hereof, no payment shall be made to Executive pursuant to this Section 6 if Executive will receive payment under Section 4(d).

7. COVENANT NOT TO COMPETE; NONSOLICITATION.

(a) Non-Competition. Except with the prior written consent of the Company authorized by a resolution adopted by the Board, during the Term (including while employed by the Company and during the Consulting Term, if any), Executive will not, and will not permit any corporation, partnership or other business entity in which Executive has a financial interest to, engage directly or indirectly in any business which is competitive with the business of the Company; provided that the ownership by Executive of not more than one percent of the capital stock of any other corporation or a one percent interest in any partnership or other business entity shall not be deemed to be a violation of this Section 7.

(b) Non-Solicitation. During the Term (including while employed by the Company and during the Consulting Term, if any), Executive shall not personally (and shall not personally cause others to) (i) take any action to solicit or divert any material business or customers away from the Company, (ii) induce customers, potential customers, suppliers, agents or other persons under contract or otherwise associated or doing business with the Company to terminate, reduce or alter any such association or business, or (iii) induce any person employed by the Company to (A) terminate such employment arrangement, (B) accept employment with another person, or (C) interfere with the customers or suppliers or otherwise with the Company in any manner.

8. SECRECY; NONDISPARAGEMENT.

(a) Non-Disclosure of Confidential Information. Executive recognizes and acknowledges that the information (such as, but not limited to, financial information), trade secrets, formulae, manufacturing methods, technical data, know-how and secret processes of the Company as acquired and used by the Company are special, valuable and unique assets of the Company. Executive will not, during the Term or at any time thereafter, disclose any such information, trade secrets, formulae, manufacturing methods, technical data, know-how and secret processes ("confidential information") to any person, firm, corporation, association or any other entity for any reason or purpose whatsoever, except as required by law, without the prior written consent of the Company, unless such information shall have previously become public knowledge.

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(b) Non-Disparagement. Executive agrees that, during the Term and at all times thereafter, he will not make any disparaging statements about the Company or the directors, officers or employees of the Company; provided that

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document this Section 8(b) shall not apply to truthful testimony as a witness, compliance with other legal obligations, or truthful assertion of or defense against any claim or breach of this Agreement, or to Executive's truthful statements or disclosures to officers or directors of the Company, and shall not require Executive to make false statements or disclosures. The Company agrees that, during the Term and at all times thereafter, neither the directors nor the officers of the Company nor any spokesperson for the Company shall make any disparaging statements about Executive; provided that this Section 8(b) shall not apply to truthful testimony as a witness, compliance with other legal obligations, truthful assertion of or defense against any claim of breach of this Agreement, or truthful statements or disclosures to Executive, and shall not require false statements or disclosures to be made.

9. EXCISE TAX GROSS-UP. If Executive becomes entitled to one or more payments (including, without limitation, the vesting of any non-cash benefit or property), whether pursuant to the terms of this Agreement or any other plan, arrangement, or agreement with the Company (all such amounts, exclusive of additional payments pursuant to this Section 9, being referred to herein as the "Total Payments"), which are or become subject to the tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code") (or any similar tax that may hereafter be imposed) (the "Excise Tax"), the Company shall pay to Executive at the time specified below an additional amount (the "Gross-Up Payment") such that the net amount retained by Executive, after reduction for (x) any Excise Tax (including any penalties or interest thereon) on the Total Payments and on the Gross-Up Payment and (y) any federal, state, or local income or employment tax on the Gross-Up Payment, shall be equal to the sum of (a) the Total Payments, and (b) an amount equal to the product of any deductions disallowed for federal, state, or local income tax purposes because of the inclusion of the Gross-Up Payment in Executive's adjusted gross income multiplied by the highest applicable marginal rate of federal, state, or local income taxation, respectively, for the calendar year in which the Gross-Up Payment is to be made.

For purposes of determining whether any of the Total Payments will be subject to the Excise Tax and the amount of such Excise Tax, (i) the Total Payments shall be treated as "parachute payments" within the meaning of Section 280G(b)(2) of the Code, and all "excess parachute payments" within the meaning of Section 280G(b)(1) of the Code shall be treated as subject to the Excise Tax, unless, and except to the extent that, in the written opinion of independent tax counsel or auditors of nationally recognized standing selected by the Company and reasonably acceptable to Executive ("Independent Advisors"), the Total Payments do not constitute parachute payments, or such excess parachute payments in excess of the base amount within the meaning of Section 280G(b)(3) of the Code represent reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of the Code or are otherwise not subject to the Excise Tax; and (ii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Independent Advisors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. If more than one Gross-Up Payment is made (including for this purpose any parachute excise tax gross-up payment pursuant to the terms of any other plan, arrangement, or agreement with the Company), the amount of each Gross-Up Payment shall be computed so as not to duplicate any prior Gross-Up Payment.

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document For purposes of determining the amount of the Gross-Up Payment, Executive shall be deemed (A) to pay federal income taxes at the highest marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment is to be made; (B) to pay any applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes if paid in such year (determined without regard to limitations on deductions based upon the amount of Executive's adjusted gross income); and (C) to have otherwise allowable deductions for federal, state, and local income tax purposes at least equal to those disallowed because of the inclusion of the Gross-Up Payment in Executive's adjusted gross income.

The Gross-Up Payment shall be paid on or before the earlier of (i) the 30th day after it has been determined that the Total Payments (or any portion thereof) are subject to the Excise Tax, or (ii) the date on which the Excise Tax becomes due and payable to the taxing authorities; provided, however, that if the amount of such Gross-Up Payment or portion thereof cannot be finally determined on or before such day, the Company shall pay to Executive on such day an estimate, as determined by the Independent Advisors, of the minimum amount of such payments and shall pay the remainder of such payments (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined. In the event that the amount of the estimated payments exceeds the amount subsequently determined by the Independent Advisors to have been due, Executive shall repay to the Company the amount of such excess, plus interest at the rate provided in Section 1274(b)(2)(B) of the Code, within five days following the Company's demand therefor.

In the event that the Excise Tax is subsequently determined, in a final judicial determination or a final administrative settlement to which Executive is a party (a "Final Determination"), to be less than the amount taken into account hereunder at the time the Gross-Up Payment is made, Executive shall repay to the Company, at the time that the amount of such reduction in Excise Tax is finally determined (but, if previously paid to the taxing authorities, not prior to the time the amount of such reduction is refunded to Executive or otherwise realized as a benefit by Executive), the portion of the Gross-Up Payment that would not have been paid if such Excise Tax as finally determined had been applied in initially calculating the Gross-Up Payment, plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise Tax is determined in a Final Determination to exceed the amount taken into account hereunder at the time the Gross-Up Payment is made (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest and penalties payable with respect to such excess) at the time that the amount of such excess is finally determined.

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The Company shall have the right to control all proceedings with the

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Internal Revenue Service that may arise in connection with the determination and assessment of any Excise Tax and, at its sole option, the Company may pursue or forego any and all administrative appeals, proceedings, hearings, and conferences with any taxing authority in respect of such Excise Tax (including any interest or penalties thereon); provided, however, that the Company's control over any such proceedings shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder, and Executive shall be entitled to settle or contest any other issue raised by the Internal Revenue Service or any other taxing authority. Executive shall cooperate with the Company in any proceedings relating to the determination and assessment of any Excise Tax and shall not take any position or action that would materially increase the amount of any Gross-Up Payment hereunder.

10. RELEASE. Executive agrees that, as a condition to receipt of the payments and benefits provided hereunder upon termination of employment with the Company or termination of Executive's consulting services, Executive will execute a release agreement, in a form reasonably satisfactory to the Company and Executive, releasing any and all claims arising out of Executive's employment or consulting relationship (other than enforcement of this Agreement, Executive's rights under any of the Company's incentive compensation and employee benefit plans and programs to which Executive is entitled under this Agreement or otherwise, and any claim for any tort for personal injury not arising out of or related to Executive's termination of employment or service).

11. REMEDIES. In the event of a breach or threatened breach by Executive of the provisions of Section 7 or Section 8 of this Agreement, the Company shall be entitled to seek an injunction restraining Executive from violating either of said provisions, or any other remedy, including the recovery of damages from Executive. If Executive shall breach any of the provisions of Section 7 or Section 8 of this Agreement, nothing herein shall be construed as preventing the Company from withholding any payment or payments required to be made hereunder to Executive.

12. ASSISTANCE IN LITIGATION. During the Term and at all times thereafter until the death or Disability of Executive, Executive shall, upon reasonable notice, furnish such information and proper assistance to the Company as may reasonably be required by the Company in connection with any litigation in which it or any of its subsidiaries or affiliates is or may become a party. The Company will promptly reimburse Executive for all reasonable business expenses and disbursements incurred by Executive in providing such information and assistance in connection with litigation.

13. SUCCESSORS.

(a) Nonassignable by Executive. This Agreement is personal to Executive and, without the prior written consent of the Company, shall not be assignable by Executive otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Executive's legal representatives.

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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (b) Company Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c) Obligations of Successor. The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law or otherwise.

14. NOTICES. All communications hereunder shall be in writing and delivered or mailed by registered mail to the Company at 1345 Avenue of the Americas, New York, New York 10105, Attention: Board of Directors, and to Executive, at 1345 Avenue of the Americas, New York, New York 10105, unless another address has been given to the other party hereto in writing.

15. INTERPRETATION. No provision of this Agreement may be altered or waived except in writing and executed by the other party hereto. This Agreement constitutes the entire contract between the parties hereto and supersedes all prior agreements, written or oral, relating to Executive's severance benefits from the Company and post-termination consulting services, to the extent such prior agreements are not consistent with this Agreement. No party shall be bound in any manner by any warranties, representations or guarantees, except as specifically set forth in this Agreement. This Agreement shall be interpreted under the laws of the State of New York, without regard to principles of conflicts of laws.

16. ARBITRATION. The parties agree that any dispute or controversy arising under or in connection with this Agreement shall be submitted to and determined by arbitration in New York, New York in accordance with the Commercial Arbitration Rules of the American Arbitration Association and agree to be bound by the decision in any such arbitration provision.

17. OTHER BENEFITS. Nothing in this Agreement shall be interpreted as reducing or eliminating any benefits to which Executive or Executive's beneficiaries are entitled, without regard to this Agreement, under any plan or program of the Company following a termination of employment or termination of consulting services for any reason.

18. NO DUTY TO MITIGATE. In the event of any termination of employment or termination of consulting services triggering benefits under this Agreement, Executive shall be under no obligation to seek other employment, and there shall be no offset against any amounts due to Executive under this Agreement on account of the remuneration attributable to any subsequent employment that Executive may obtain. Any amounts due under this Agreement upon termination of employment or consulting services are in the nature of severance payments, or liquidated damages, or both, and are not in the nature of a penalty.

19. FEES AND EXPENSES. The Company shall pay fees and expenses reasonably incurred by Executive as a result of Executive's seeking to obtain or enforce any right or benefit provided by this Agreement, promptly and from time

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document to time, at Executive's request as such fees and expenses are incurred unless Executive's actions in such regard are determined to be frivolous or in bad faith.

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IN WITNESS WHEREOF, Executive has hereunto set his hand and the Company has caused this instrument to be duly executed as of the day and year first above written.

CARTER-WALLACE, INC

By: ------Name: Title:

EXECUTIVE

------Henry H. Hoyt, Jr.

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~~1. Definitions...... 1~~

~~2. Term of Agreement...... 4~~

~~3. Consulting Services...... 4~~

~~(a) Consulting Term...... 4~~

~~(b) Services of Executive...... 4~~

~~(c) Company Support...... 5~~

~~(d) Non-Exclusive Commitment...... 5~~

~~4. Compensation for Consulting Services...... 5~~

~~(a) Consulting Fee...... 5~~

~~(b) Non-Employee Director's Compensation...... 5~~

~~(d) Payment Upon Termination of Consulting Term Due to Change in Control or Due to Termination by Executive for Good Reason...... 6~~

~~(e) Reimbursement of Expenses...... 6~~

~~5. Additional Compensation for Entry Into Agreement...... 6~~

~~(a) Terms of Outstanding Options...... 6~~

~~(b) Terms of Outstanding Restricted Stock and Deferred Stock...... 6~~

~~6. Obligations of the Company upon a Change in Control During Executive's Employment...... 6~~

~~7. Covenant Not to Compete; Nonsolicitation...... 7~~

~~(a) Non-Competition...... 7~~

~~(b) Non-Solicitation...... 7~~

~~8. Secrecy; Nondisparagement...... 7~~

~~(a) Non-Disclosure of Confidential Information...... 7~~

~~(b) Non-Disparagement...... 7~~

~~9. Excise Tax Gross-Up...... 8~~

~~10. Release...... 9~~

~~11. Remedies...... 10~~

~~12. Assistance in Litigation...... 10~~

~~13. Successors...... 10~~

~~(a) Nonassignable by Executive...... 10~~

~~(b) Company Successors and Assigns...... 10~~

~~(c) Obligations of Successor...... 10~~

~~14. Notices...... 10~~

~~15. Interpretation...... 10~~

~~16. Arbitration...... 11~~

~~18. No Duty to Mitigate...... 11~~

~~19. Fees and Expenses...... 11~~

~~EXHIBIT 10.23(a)~~

~~January 27, 2000~~

~~Mr. Henry H. Hoyt, Jr. Carter-Wallace, Inc. 1345 Avenue of the Americas New York, New York 10105~~

~~Dear Harry:~~

Reference is made to the Consulting Agreement, dated as of July 31, 1999, between Carter-Wallace, Inc. (the "Company") and you (the "Agreement"). The Board of Directors of the Company has determined that it is appropriate to amend Section 6(i) of the Agreement to clarify the manner in which your compensation for the period preceding termination would be paid in the event your employment is terminated following a Change in Control (as defined in the Agreement) and there is no Continuation Period (as defined in the Agreement) relating to such Change in Control.

~~Accordingly, upon confirmation by you of your agreement thereto, Clause (i) of Section 6 of the Agreement shall be amended to read in its entirety as follows:~~

(i) If there is no Continuation Period relating to such Change in Control, at the date of such Change in Control Executive shall be paid the amount of the monthly consulting fee that would have otherwise been payable as specified in Section 4(a) times 60 plus the sum of (A) the full amount due to Executive and not theretofore paid for base salary up to the date of such Change in Control, (B) the amount of any accrued but unpaid bonus on account of the last full fiscal year preceding the date of such Change in Control and (C) an amount in lieu of a bonus for the year in which the Change in Control occurs determined by multiplying the greater of (x) the target bonus (based on assumed attainment of 100% of the performance objectives) for the year in which the Change in Control occurs and (y) the highest bonus earned by Executive in any of the three full fiscal years preceding the year in which the Change in Control occurs by a fraction, the numerator of which is the number of months (treating any partial month as a full month for this purpose) in the year in which Change in Control occurs during which Executive was employed by the Company and the denominator of which is twelve; or

~~Very truly yours,~~

~~CARTER-WALLACE, INC.~~

~~------President~~

~~Confirmed and agreed this ___ day of January, 2000~~

~~------Henry H. Hoyt, Jr.~~

~~EXHIBIT 10.24~~

~~January 1, 1999~~

~~Mr. Thomas G. Gerstmyer 12 Alexis Court P.O. Box 132 Holmdel, New Jersey 07733~~

~~Dear Tom:~~

Carter-Wallace, Inc. (the "Company") recognizes that your contribution to the success of the Company has been substantial and wishes to reinforce and encourage your continued attention and dedication to your assigned duties without distraction by entering into compensation arrangements with you that will provide you with financial security in the event of a pending or threatened Change in Control (as defined below). In order to accomplish these objectives, the Company has entered into this letter agreement (the "Agreement").

~~1. Certain Definitions.~~

(a) "Cause" shall mean (i) the willful and material breach of Sections 5 or 6 of this Agreement by you; (ii) your conviction of a felony; or (iii) your engagement in conduct that constitutes willful gross neglect or willful gross misconduct in carrying out your duties under this Agreement, resulting, in either case, in material harm to the financial condition or reputation of the Company. For purposes of this Agreement, an act or failure to act on your part

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document shall be considered "willful" if it was done or omitted to be done by you not in good faith, and shall not include any act or failure to act resulting from any incapacity of you. Notwithstanding the foregoing, a termination for "cause" shall not take effect unless you have been given written notice by the Company of its intention to terminate you for "cause," such notice (A) to state in detail the particular act or acts or failure or failures to act that constitute the grounds on which the proposed termination for "cause" is based and (B) to be given within 90 days of the Company's learning of such act or acts or failure or failures to act. You shall have 20 days after the date that such written notice has been given to you in which to cure such conduct, to the extent such cure is possible. If you fail to cure such conduct, you shall then be entitled to a hearing before the Board of Directors of the Company (the "Board") at which you and your counsel are entitled to appear. Such hearing shall be held within 25 days of such notice to you, provided you request such hearing within 10 days of the written notice from the Company of the intention to terminate you for "cause". If, within five days following such hearing, you are furnished written notice by the Board confirming that, in its judgment, grounds for "cause" on the basis of the original notice exist, you shall thereupon be terminated for "cause."

~~(b) A "Change in Control" shall be deemed to have occurred if:~~

(i) any Person (other than the Company, the Hoyt family, any trustee or other fiduciary holding securities under any employee benefit plan of the Company, or any company owned, directly or indirectly, by the stockholders of the Company immediately prior to the occurrence with respect to which the evaluation is being made in substantially the same proportions as their ownership of the common stock of the Company) becomes the Beneficial Owner (except that a Person shall be deemed to be the Beneficial Owner of all shares that any such Person has the right to acquire pursuant to any agreement or arrangement or upon exercise of conversion rights, warrants or options or otherwise, without regard to the sixty day period referred to in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company or any Significant Subsidiary (as defined below), representing 25% or more of the combined voting power of the Company's or such Subsidiary's then outstanding securities; provided, however, that such event shall not constitute a Change in Control unless or until the percentage of such securities owned beneficially, directly or indirectly, by such Person is equal to or more than all such securities owned beneficially, directly or indirectly, by the Hoyt Family;

(ii) during any period of two consecutive years, individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in clause (i), (iii) or (iv) of this paragraph) whose election by the Board or nomination for election by the Company's stockholders was approved by a vote of at least two-thirds of the directors then still

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document in office who either were directors at the beginning of the two-year period or whose election or nomination for election was previously so approved but excluding for this purpose any such new director whose initial assumption of office occurs as a result of either an actual or threatened election contest (as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Exchange Act) or other actual or threatened solicitation of proxies or consents by or on behalf of an individual, corporation, partnership, group, associate or other entity or Person other than the Board, cease for any reason to constitute at least a majority of the Board; provided, however, that such event shall not constitute a Change in Control unless or until the percentage of voting securities of the Company owned beneficially, directly or indirectly, by the Hoyt Family is less than 50% of all such outstanding securities;

~~-2-~~

~~(v) any other event occurs which the Board determines, in its discretion, would materially alter the structure of the Company or its ownership.~~

~~For purposes of this definition:~~

~~(A) The term "Beneficial Owner" shall have the meaning ascribed to such term in Rule 13d-3 under the Exchange Act (including any successor to such Rule).~~

~~(B) The term "Exchange Act" means the Securities Exchange Act of 1934, as amended from time to time, or any~~

~~(D) The term the "Hoyt Family" shall mean the family of Henry H. Hoyt, Sr., his descendants, and members of such descendants' families.~~

(c) The "Effective Date" shall be the date on which a Change in Control occurs; provided, however, that if your employment with the Company is terminated prior to the date on which a Change in Control occurs and it is reasonably demonstrated that such termination was at the request of a third party that has taken steps reasonably calculated to effect a Change in Control or otherwise arose in connection with or anticipation of a Change in Control, then for all purposes of this Agreement the "Effective Date" shall be the date immediately prior to the date of such termination.

(d) "Good Reason" shall mean (i) the assignment to you of any duties inconsistent in any respect with your position (including status, offices, titles and reporting relationships), authority, duties or responsibilities as contemplated by Section 3(a) of this Agreement or any other action by the Company that results in a diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith that is remedied by the Company promptly after receipt of notice thereof given by you; (ii) the transfer or attempted assignment of you without your consent to a location outside the area described in Section 3(a)(ii) of this Agreement or the assignment to you of duties that require that you be absent from such location on business for more than the average number of days of business-related travel in the preceding three fiscal years; or (iii) any failure of the Company to comply with and satisfy Section 10(c) of this Agreement or any other material breach of this Agreement by the Company.

2. Employment Period. The period commencing on the Effective Date and ending on the second anniversary of such date or on such earlier date of termination as provided herein shall be referred to herein as the "Employment Period". The Company hereby agrees to continue you in its employ, and you hereby agree to remain in the employ of the Company, during the Employment Period.

~~-3-~~

~~3. Terms of Employment.~~

(a) Position and Duties. During the Employment Period, (i) your position, status, authority, duties and responsibilities shall be at least equal to those of the position held by you immediately prior to the Effective Date and (ii) your services shall be performed at the location where you were employed immediately preceding the Effective Date or any office or location less than twenty-five (25) miles from such location. During the Employment Period, you agree to devote your best efforts to the service of the Company and the

~~(b) Compensation.~~

(i) Base Salary. During the Employment Period, you shall receive a base salary ("Base Salary") at an annual rate at least equal to the highest annual base salary paid to you by the Company with respect to any of the three fiscal years immediately preceding the year in which the Effective Date occurs or, if greater, the base salary in effect for the year in which the Effective Date occurs.

(ii) Annual Bonus. In addition to Base Salary, you shall be awarded, for each fiscal year during the Employment Period, an annual bonus (an "Annual Bonus") in cash at least equal to the greater of (x) the highest bonus earned by you in any of the three fiscal years immediately preceding the fiscal year in which the Effective Date occurs and (y) the target bonus (based on the assumed attainment of 100% of the performance objectives) for the fiscal year in which the Effective Date occurs.

(iii) Benefit Plans. During the Employment Period, you and your family shall be entitled to participate in, on a basis consistent with your position with the Company, and shall receive benefits under plans, practices, policies and programs provided by the Company (including, without limitation, retirement, pension, profit sharing, stock option and long-term incentive plans, and death and life insurance benefits and medical insurance programs) at least as favorable as the most favorable of such plans, practices, policies and programs in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable, as in effect from time to time thereafter with respect to senior executives of the Company and their families. In the case of a retirement on or after the Effective Date, all of your then outstanding options to purchase common stock of the Company shall become immediately vested and exercisable for the remaining term of the option and all of your then outstanding restricted and deferred stock grants relating to common stock of the Company shall become immediately vested. For purposes of this Agreement, "retire" or "retirement" shall mean your voluntary termination of employment with the Company after attaining age 65 or, if earlier, the date which you are eligible to terminate employment with the Company and promptly thereafter commence receiving retirement benefits pursuant to any pension plan maintained by the Company without any reduction for the failure to attain a prescribed age.

(iv) Vacation. During the Employment Period, you shall be entitled to paid vacation in accordance with the policies of the Company in effect at any time during the 90-day period immediately preceding the Effective Date or, if more favorable, as in effect from time to time thereafter with respect to other senior executives of the Company.

~~-4-~~

~~If, during the Employment Period, the Company shall terminate your employment other than for Cause, or if you shall terminate your employment for Good Reason:~~

~~(a) Lump-Sum Payment. The Company shall pay to you in a lump sum in cash within 7 days after the date of termination the aggregate of the following amounts:~~

(i) The full amount due to you and not theretofore paid for base salary up to the date of such termination, the amount of any accrued but unpaid bonus on account of the last full fiscal year preceding the date of such termination and accrued vacation pay;

(ii) Two times your Final Compensation. For purposes of this Agreement, Final Compensation means the sum of (A) your annual base salary as in effect immediately prior to such termination and (B) the greater of (x) the highest bonus earned by you in any of the three full fiscal years preceding the date of termination and (y) the target bonus (based on the assumed attainment of 100% of the performance objectives) for the year in which the termination occurs; and

(iii) An amount equal to the increase in the lump-sum benefit to which you would be entitled under the Carter-Wallace, Inc. Executive Pension Benefits Plan (assuming for this purpose that you had elected a lump-sum benefit payable upon your termination) if the calculation of the gross benefit thereunder (but not of any offset amounts) were modified by (A) increasing your number of years of benefit service by three, (B) substituting your Final Compensation for your "Modified Average Compensation" in the benefit formula and (C) treating such gross benefit as fully vested.

~~Notwithstanding the foregoing, the aggregate lump-sum payment made pursuant to clauses (ii) and (iii) above shall in no event be less than $1,000,000.~~

(b) Pro-Rated Bonus. As soon as practicable following the end of the fiscal year in which the termination of your employment occurs, the Company shall pay to you a pro-rated bonus reflecting the number of months (treating any partial month as a full month for this purpose) in such fiscal year during which you were employed.

(c) Welfare Benefits. For two years following the termination of your employment, or such longer period as any plan, program, practice or policy may provide, the Company shall continue benefits to you and/or your family at least equal to those which would have been provided in accordance with the welfare benefit plans, programs, practices and policies of the Company if your employment had not been terminated, including medical, dental, disability and group life insurance plans and programs, in accordance with the most favorable plans, practices, programs or policies of the Company during the 90-day period immediately preceding the Effective Date or, if more favorable, as in effect from time to time thereafter with respect to other senior executives of the Company and their families and, for purposes of eligibility for retiree benefits

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document pursuant to such plans, practices, programs and policies, you shall be considered to have remained employed until the end of the Employment Period and to have retired on the last day of such period.

~~-5-~~

(d) Stock Options and Awards. All of your then outstanding options to purchase common stock of the Company shall become immediately vested and exercisable for the remaining term of the option and all of your then outstanding restricted and deferred stock grants relating to common stock of the Company shall become immediately vested.

(e) Outplacement. The Company agrees to provide you with reasonable outplacement assistance through the Company's Human Resources Department. The Company further agrees to reimburse you for reasonable job search expenses. All job search expenses in excess of one hundred dollars ($100.00) are subject to prior approval by the Company.

(f) Release. You agree, as a condition to receipt of the termination payments and benefits provided for in this Section 4, that you will execute a release agreement, in a form reasonably satisfactory to the Company and you, releasing any and all claims arising out of your employment (other than enforcement of this Agreement, your rights under any of the Company's incentive compensation and employee benefit plans and programs to which you are entitled under this Agreement or otherwise, and any claim for any tort for personal injury not arising out of or related to your termination of employment).

~~5. Covenant Not to Compete; Nonsolicitation.~~

(a) Except with the prior written consent of the Company authorized by a resolution adopted by the Board, while employed by the Company, you will not, and will not permit any corporation, partnership or other business entity in which you have a financial interest to, engage directly or indirectly in any business which is competitive with the business of the Company; provided that the ownership by you of not more than one percent of the capital stock of any other corporation or a one percent interest in any partnership or other business entity shall not be deemed to be a violation of this Section 5.

(b) While employed by the Company and for a period of one year after the termination of your employment for any reason, you shall not personally (and shall not personally cause others to) (i) take any action to solicit or divert any material business or customers away from the Company, (ii) induce customers, potential customers, suppliers, agents or other persons under contract or otherwise associated or doing business with the Company to terminate, reduce or alter any such association or business, or (iii) induce any person employed by the Company to (A) terminate such employment arrangement, (B) accept employment with another person, or (C) interfere with the customers or suppliers or otherwise with the Company in any manner.

~~-6-~~

~~6. Secrecy; Nondisparagement.~~

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document (a) You recognize and acknowledge that the information (such as, but not limited to, financial information), trade secrets, formulae, manufacturing methods, technical data, know-how and secret processes of the Company as acquired and used by the Company are special, valuable and unique assets of the Company. You will not, while employed by the Company or at any time thereafter, disclose any such information, trade secrets, formulae, manufacturing methods, technical data, know-how and secret processes to any person, firm, corporation, association or any other entity for any reason or purpose whatsoever without the prior written consent of the Company, unless such information shall have previously become public knowledge.

(b) You agree that you will not make any disparaging statements about the Company or the directors, officers or employees of the Company; provided that this Section 6(b) shall not apply to truthful testimony as a witness, compliance with other legal obligations, or truthful assertion of or defense against any claim or breach of this Agreement, or to your truthful statements or disclosures to officers or directors of the Company, and shall not require you to make false statements or disclosures. The Company agrees that neither the directors nor the officers of the Company nor any spokesperson for the Company shall make any disparaging statements about you; provided that this Section 6(b) shall not apply to truthful testimony as a witness, compliance with other legal obligations, truthful assertion of or defense against any claim of breach of this Agreement, or truthful statements or disclosures to you, and shall not require false statements or disclosures to be made.

7. Excise Tax Gross-Up. If you become entitled to one or more payments (including, without limitation, the vesting of any non-cash benefit or property), whether pursuant to the terms of this Agreement or any other plan, arrangement, or agreement with the Company (all such amounts, exclusive of additional payments pursuant to this Section 7, being referred to herein as the "Total Payments"), which are or become subject to the tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code") (or any similar tax that may hereafter be imposed) (the "Excise Tax"), the Company shall pay to you at the time specified below an additional amount (the "Gross-Up Payment") such that the net amount retained by you, after reduction for (x) any Excise Tax (including any penalties or interest thereon) on the Total Payments and on the Gross-Up Payment and (y) any federal, state, or local income or employment tax on the Gross-Up Payment, shall be equal to the sum of (a) the Total Payments, and (b) an amount equal to the product of any deductions disallowed for federal, state, or local income tax purposes because of the inclusion of the Gross-Up Payment in your adjusted gross income multiplied by the highest applicable marginal rate of federal, state, or local income taxation, respectively, for the calendar year in which the Gross-Up Payment is to be made.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document not constitute parachute payments, or such excess parachute payments in excess of the base amount within the meaning of Section 280G(b)(3) of the Code represent reasonable compensation for services actually rendered within the meaning of Section 280G(b)(4) of the Code or are otherwise not subject to the Excise Tax; and (ii) the value of any non-cash benefits or any deferred payment or benefit shall be determined by the Independent Advisors in accordance with the principles of Sections 280G(d)(3) and (4) of the Code. If more than one Gross-Up Payment is made (including for this purpose any parachute excise tax gross-up payment pursuant to the terms of any other plan, arrangement, or agreement with the Company), the amount of each Gross-Up Payment shall be computed so as not to duplicate any prior Gross-Up Payment.

~~-7-~~

For purposes of determining the amount of the Gross-Up Payment, you shall be deemed (A) to pay federal income taxes at the highest marginal rate of federal income taxation for the calendar year in which the Gross-Up Payment is to be made; (B) to pay any applicable state and local income taxes at the highest marginal rate of taxation for the calendar year in which the Gross-Up Payment is to be made, net of the maximum reduction in federal income taxes which could be obtained from deduction of such state and local taxes if paid in such year (determined without regard to limitations on deductions based upon the amount of your adjusted gross income); and (C) to have otherwise allowable deductions for federal, state, and local income tax purposes at least equal to those disallowed because of the inclusion of the Gross-Up Payment in your adjusted gross income.

The Gross-Up Payment shall be paid on or before the earlier of (i) the 30th day after it has been determined that the Total Payments (or any portion thereof) are subject to the Excise Tax, or (ii) the date on which the Excise Tax becomes due and payable to the taxing authorities; provided, however, that if the amount of such Gross-Up Payment or portion thereof cannot be finally determined on or before such day, the Company shall pay to you on such day an estimate, as determined by the Independent Advisors, of the minimum amount of such payments and shall pay the remainder of such payments (together with interest at the rate provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined. In the event that the amount of the estimated payments exceeds the amount subsequently determined by the Independent Advisors to have been due, you shall repay to the Company the amount of such excess, plus interest at the rate provided in Section 1274(b)(2)(B) of the Code, within five days following the Company's demand therefor.

In the event that the Excise Tax is subsequently determined, in a final judicial determination or a final administrative settlement to which you are a party (a "Final Determination"), to be less than the amount taken into account hereunder at the time the Gross-Up Payment is made, you shall repay to the Company, at the time that the amount of such reduction in Excise Tax is finally determined (but, if previously paid to the taxing authorities, not prior to the time the amount of such reduction is refunded to you or otherwise realized as a benefit by you), the portion of the Gross-Up Payment that would not have been paid if such Excise Tax as finally determined had been applied in initially calculating the Gross-Up Payment, plus interest on the amount of such repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the event that the

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Excise Tax is determined in a Final Determination to exceed the amount taken into account hereunder at the time the Gross-Up Payment is made (including by reason of any payment the existence or amount of which cannot be determined at the time of the Gross-Up Payment), the Company shall make an additional Gross-Up Payment in respect of such excess (plus any interest and penalties payable with respect to such excess) at the time that the amount of such excess if finally determined. -8-

The Company shall have the right to control all proceedings with the Internal Revenue Service that may arise in connection with the determination and assessment of any Excise Tax and, at its sole option, the Company may pursue or forego any and all administrative appeals, proceedings, hearings, and conferences with any taxing authority in respect of such Excise Tax (including any interest or penalties thereon); provided, however, that the Company's control over any such proceedings shall be limited to issues with respect to which a Gross-Up Payment would be payable hereunder, and you shall be entitled to settle or contest any other issue raised by the Internal Revenue Service or any other taxing authority. You shall cooperate with the Company in any proceedings relating to the determination and assessment of any Excise Tax and shall not take any position or action that would materially increase the amount of any Gross-Up Payment hereunder.

8. Remedies. In the event of a breach or threatened breach by you of the provisions of Section 5 or Section 6 of this Agreement, the Company shall be entitled to seek an injunction restraining you from violating either of said provisions, or any other remedy, including the recovery of damages from you. If you shall breach any of the provisions of Section 5 or Section 6 of this Agreement, nothing herein shall be construed as preventing the Company from withholding any payment or payments required to be made hereunder to you.

9. Assistance in Litigation. You shall, upon reasonable notice, furnish such information and proper assistance to the Company as may reasonably be required by the Company in connection with any litigation in which it or any of its subsidiaries or affiliates is or may become a party.

~~10. Successors.~~

(a) This Agreement is personal to you and, without the prior written consent of the Company, shall not be assignable by you otherwise than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by your legal representatives.

~~(b) This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.~~

(c) The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document aforesaid which assumes and agrees to perform this Agreement by operation of law or otherwise.

11. Notices. All communications hereunder shall be in writing and delivered or mailed by registered mail to the Company at 1345 Avenue of the Americas, New York, New York 10105, Attention: Board of Directors, and to you, at your address set forth above, unless another address has been given to the other party hereto in writing. -9-

12. Interpretation. No provision of this Agreement may be altered or waived except in writing and executed by the other party hereto. This Agreement constitutes the entire contract between the parties hereto and cancels and supersedes all prior agreements, written or oral, relating to your employment with the Company. No party shall be bound in any manner by any warranties, representations or guarantees, except as specifically set forth in this Agreement. This Agreement shall be interpreted under the laws of the State of New York.

13. Arbitration. The parties agree that any dispute or controversy arising under or in connection with this Agreement shall be submitted to and determined by arbitration in New York, New York in accordance with the Commercial Arbitration Rules of the American Arbitration Association and agree to be bound by the decision in any such arbitration provision.

14. Other Benefits. Nothing in this Agreement shall be interpreted as reducing or eliminating any benefits to which you or your beneficiaries are entitled, without regard to this Agreement, under any plan or program of the Company following a termination of employment for any reason.

15. No Duty to Mitigate. In the event of any termination of employment under Section 4 of this Agreement, you shall be under no obligation to seek other employment, and there shall be no offset against any amounts due to you under this Agreement on account of the remuneration attributable to any subsequent employment that you may obtain. Any amounts due under Section 4 are in the nature of severance payments, or liquidated damages, or both, and are not in the nature of a penalty.

16. Fees and Expenses. The Company shall pay fees and expenses reasonably incurred by you as a result of your seeking to obtain or enforce any right or benefit provided by this Agreement, promptly and from time to time,

~~-10-~~

~~at your request as such fees and expenses are incurred unless your actions in such regard are determined to be frivolous or in bad faith.~~

~~Very truly yours,~~

~~CARTER-WALLACE, INC.~~

~~Agreed and consented to as of the date set forth above~~

~~------Thomas G. Gerstmyer~~

~~-11-~~

~~EXHIBIT 10.24(a)~~

~~January 27, 2000~~

~~Mr. Thomas G. Gerstmyer 12 Alexis Court P.O. Box 132 Holmdel, New Jersey 07733~~

~~Dear Tom:~~

Reference is made to the letter agreement, dated as of January 1, 1999, between Carter-Wallace, Inc. (the "Company") and you (the "Agreement") relating to certain compensation arrangements in the event of a pending or threatened Change in Control (as defined in the Agreement). The Board of Directors of the Company has determined that it is appropriate to amend Section 4 of the Agreement to clarify how the pro-rated bonus referred to therein for the year in which termination of employment occurs would be calculated.

~~Accordingly, upon confirmation by you of your agreement thereto, the Agreement shall be amended in the following respects:~~

~~(1) Clause (i) of Section 4(a) of the Agreement shall be amended to read in its entirety as follows:~~

~~(2) Subsection (b) of Section 4 shall be deleted in its entirety and subsections (c), (d), (e), and (f) shall be relettered (b), (c), (d), and (e), respectively.~~

~~Very truly yours,~~

~~CARTER-WALLACE, INC.~~

~~------Chairman of the Board~~

~~Confirmed and agreed this ___ day of January, 2000~~

~~------Thomas G. Gerstmyer~~

~~ANNUAL REPORT FOR THE YEAR ENDED MARCH 31 2000~~

~~EXECUTIVE OFFICES 1345 Avenue of the Americas, New York, N.Y. 10105 212-339-5000~~

~~RESEARCH LABORATORIES Cranbury, New Jersey~~

MANUFACTURING PLANTS Cranbury, New Jersey Colonial Heights, Virginia Decatur, Illinois Santa Ana, California Winsted, Connecticut Montreal, Canada Folkestone, England Milan, Italy Mexico City, Mexico New Plymouth, New Zealand Barcelona, Spain

~~TRANSFER AND DISBURSING AGENT The Bank of New York 101 Barclay Street New York, N.Y. 10286 800-524-4458~~

~~REGISTRAR OF STOCK The Bank of New York 101 Barclay Street New York, N.Y. 10286~~

~~SHAREHOLDER RELATIONS Ruder Finn, Inc. 800-984-1777~~

~~CARTER-WALLACE, INC. ANNUAL REPORT For the year ended March 31, 2000~~

FINANCIAL HIGHLIGHTS 2000 1999 Net sales $747,668,000 $668,872,000 Earnings before taxes 71,036,000 46,244,000 Net earnings 43,332,000 28,209,000 Earnings per share--basic $ .96 $ .62 Earnings per share--diluted $ .94 $ .62 Dividends 10,809,000 9,931,000 Dividends per share $ .24 $ .22 Average shares outstanding 45,019,000 45,180,000 Number of stockholders of record Common 1,913 2,108 Class B common 1,142 1,241

~~[LOGO] The Company markets toiletries, pharmaceuticals, diagnostic specialties, proprietary drugs and pet products~~

~~CONTENTS~~

~~Report to Stockholders 2~~

~~Summary of Selected Financial Data 7~~

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Management's Discussion and Analysis of Results of Operations and Financial Condition 8

~~Description of Business Segments 11~~

~~Consolidated Balance Sheets 12~~

~~Consolidated Statements of Earnings, Retained Earnings and Comprehensive Earnings 14~~

~~Consolidated Statements of Cash Flows 15~~

~~Notes to Consolidated Financial Statements 16~~

~~Independent Auditors' Report 30~~

~~Directors and Officers 31~~

~~Facilities and Corporate Information 32~~

~~REPORT TO STOCKHOLDERS~~

~~In the fiscal year ended March 31, 2000, sales increased to an all-time high. The Company's consolidated sales were $747,668,000 compared to the prior year's sales of $668,872,000, for a gain of 12%.~~

The Company's earnings increased by 55% to $.96 per basic share for the fiscal year ended March 31, 2000 compared to $.62 per basic share in the prior year. On a diluted basis, the Company earned $.94 per share in the current year compared to $.62 per share in the prior year.

~~SALES~~

Sales in the Company's three business segments were Domestic Consumer Products $304,253,000, Domestic Health Care $206,158,000 and International $237,257,000. Domestic Consumer Products were 41%, Domestic Health Care were 27% and International were 32% of total sales. These sales compare to a year ago of $283,228,000, $181,157,000 and $204,487,000, respectively. Lower foreign exchange rates had the effect of decreasing International sales by approximately $10,400,000.

~~DIVIDENDS~~

~~Dividends of $.24 per share were paid in the fiscal year ended March 31, 2000 compared to $.22 per share in the prior year. The Company has paid dividends for 117 consecutive years.~~

~~CARTER PRODUCTS DIVISION~~

The Division achieved another record in sales revenues for the year through innovative new product introductions and the further strengthening of several core franchises. This performance was attained even as the retail industry, particularly food outlets, continued to consolidate. The Division's key brand segments remained prominent in the market and several Carter Products are the preeminent brand in their category.

Factory shipments of Trojan brand condoms reached a record high. Combined market share for all the Division's condom brands continued to rise to over 68% of total condom category sales this year. Both Trojan and Naturalamb brands increased their market position. Leadership advertising, effective promotion, comprehensive educational programs and innovative line extensions continue to improve the brand's leading position in this market. Trojan Supra polyurethane condoms were introduced in July 1999.

Sales volume for the Arrid line of anti-perspirants and deodorants increased year to year even as competition in this category intensified. The Arrid brand successfully introduced new fragrances for the solid and aerosol segments and improved the aerosol product for greater efficacy. Arrid also continued its successful advertising campaign, focusing on the powerful protection of Arrid in stressful situations.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document The Nair line of hair removal products continues to be the number one brand in this category and has increased sales volume in the depilatory and wax segments. Nair 4-minute lotion, the Nair Bikini Kit and Nair Raspberry Razz-ma-tazz lotion were successfully introduced in the latter part of the year, further expanding the presence of Nair in the fast growing hair removal category.

~~Pearl Drops continues to be competitive in the specialty tooth whitening category. This segment faces pressure from mainstream brands that have introduced whitening line extensions.~~

The Division continues to be one of the leading marketers of at-home pregnancy and ovulation test kits. Sales of both the First Response and Answer pregnancy and ovulation test kits performed well. On a combined basis First Response and Answer ovulation test kits are number one in this category.

~~WALLACE LABORATORIES DIVISION~~

~~The Wallace Laboratories Division posted strong sales performance from the continued growth of Astelin Nasal Spray and the introduction of several new cough/cold prescription products.~~

Astelin Nasal Spray, the only prescription antihistamine nasal spray on the market, continued to grow. It is the Division's most promoted product throughout the year, but the heaviest emphasis is during the spring and fall allergy seasons.

Two studies evaluating Astelin Nasal Spray in patients with vasomotor (perennial, nonallergic) rhinitis were completed during fiscal 2000. Both studies demonstrated that Astelin was effective across all the measured symptoms of vasomotor rhinitis, and a filing was made to the Food and Drug Administration (FDA) in November 1999 for this indication. If approved, Astelin Nasal Spray will be the only antihistamine in the United States with claims for both allergic and nonallergic rhinitis.

~~A filing to the FDA for the Astelin pediatric indication was made in June 1999. In May 2000 the Division received approval from the FDA.~~

Astelin Nasal Spray is marketed under a joint venture agreement with ASTA Medica AG. Under this agreement, Carter-Wallace, through the Wallace Laboratories Division, is responsible for all manufacturing, selling, marketing and administrative services for Astelin and is compensated by the joint company for these activities.

The Division's cough/cold product line underwent many changes in fiscal 2000. This includes the reformulation of Rynatan tablets, which was introduced in May 1999 under an agreement with the Warrick Division of Schering-Plough Corporation. In addition, the Division introduced the prescription cough/ cold products Ryna-12 Pediatric Suspension, a twice-a-day liquid antihistamine decongestant, and Tussi-12 tablets for coughs. These products, along with Tussi-12 suspension, a twice-a day liquid prescription cough preparation introduced in December 1998, received major promotional support, primarily during the cough/cold/flu season. As many of these products are appropriate for pediatric patients, the Division strengthened its promotional efforts in the pediatric area during fiscal 2000.

While major promotional emphasis was placed on Astelin Nasal Spray and the cough/cold products, the Soma family of products also received promotional support targeted to appropriate physicians throughout the year.

The Division continues to explore line extensions, new pharmaceutical products and licensing/acquisition opportunities that would broaden or complement existing product lines, as well as co-promotion agreements.

~~WAMPOLE LABORATORIES DIVISION~~

Wampole Laboratories closed out the millennium with the best year in its history. Sales and earnings both grew substantially year over year as the Division continued to increase market share in key segments and realize the full benefit from new products introduced in the prior year.

~~The key to Wampole's growth is its enzyme immunoassay (EIA) business and, once~~

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document again, the Division was successful in placing a record number of automated instrument platforms that utilize Wampole test kits. EIA products to detect infectious disease, particularly C. difficile, and autoimmune disease showed very good growth, aided by a full year of sales for Macra Lp(a), a cardiovascular risk assessment test and MicroTrak Chlamydia.

~~Results also benefited from a full year of sales for MicroTrak direct fluorescence assays and for the Analyst point-of-care chemistry system.~~

Sales of existing point-of-care products were strong, especially in areas of pregnancy testing, following the forced withdrawal of a major competitor from the market. Mono-Plus, a rapid test for infectious mononucleosis performed in the physician's office, continued to demonstrate sales growth well over that of the market. 3

One of the more significant drivers of Wampole's growth was its alliance with Allegiance Healthcare, one of the largest distributors of hospital products in the country. By partnering with Allegiance, the Division is able to effectively penetrate many of the managed care buying groups with which Allegiance has preferred vendor status. This relationship is expected to continue to grow and to contribute to the Division's future success in a rapidly consolidating marketplace.

~~LAMBERT KAY DIVISION~~

Lambert Kay's broad range of pet products, once sold primarily through independent pet stores, is now found in all major pet chains and many major mass market outlets. The recent explosion of the Internet has opened another opportunity for the Division to provide our customers with the products and convenience they want. This year, several pet product Internet Webstores debuted and Lambert Kay products are available on most of them. In addition, Lambert Kay's own Website brings pet owners detailed information on our full range of products and is updated regularly to highlight new products and other facts and useful tips that would be of interest to our customers.

Lassie dog products and Tiny Tiger feline products are the Lambert Kay names displayed on the shelves of mass market and grocery stores. Lambert Kay's products fall into seven broad categories: grooming aids, grooming tools, nutritional supplements, medical products, training aids, chain collars and leads, and toys for dogs and cats.

The Division continued to introduce new products during the year. Two unique pet shampoos were brought to market. Spot Secure shampoo can be used in between applications of the popular new "spot-on" flea and tick products whose protection generally lasts for several weeks. Mr. Spats' no-rinse cat shampoo eases the frequently awkward job of washing a cat. Because no water is needed to activate the cleansing action of the product there is less resistance to the grooming.

In the nutritional category, Shed Relief, a food supplement that helps control excess shedding in dogs and cats, and Theralin Tabs, complete vitamin and mineral supplements for dogs and cats, were introduced. Ten new hardware products were also offered, including the unique Hair Raiser Shedder dead hair remover. Four new pin and brush grooming aids, under the Twinco brand name, were also brought to market. This variety of pin and pin/bristle brushes, are needed to deal effectively with the wide variety of pet coats.

~~Color Guard prong training collars and accessories, in distinctive gold colored steel, were added this year to our current wide selection of metal dog collars and leads.~~

~~INTERNATIONAL DIVISION~~

The International Division achieved substantial growth during the past year, attaining record sales and profits. All subsidiary operations including Canada, Mexico, Australia, England, France, Italy and Spain contributed higher sales during the fiscal year. The Division benefited from higher unit volumes for existing products, product introductions and line extensions, selective selling price increases and the full year impact of several consumer product line acquisitions. These robust results were partially offset by a strengthening U.S. dollar, which had the effect of reducing the Division's sales and profit contribution when restated for U.S. financial reporting.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Consumer products displayed sales gains in a number of product segments and geographic areas. Our depilatory lines performed extremely well, with significant sales gains for Nair in Mexico and Canada and for Taky in Spain. A full line of depilatory products was successfully launched in France under the Nair trademark. Nair continues to be a leading brand in the Middle East. The full year impact of the acquisition of the Barbara Gould line of facial cleansing and skin care products lent strength to our performance in France. Lineance, a line of anticellulite skin care products, continued to maintain a dominant mass market share in France. In Spain, the

4 market share for the Division's Eudermin skin care products increased as a result of product line extensions and expanded distribution. Our Curash line of baby products in Australia, augmented by several new offerings, also achieved considerable growth during the fiscal year.

Oral care sales advanced during the year with the full year effect of the acquisition of Ultrafresh in Australia and New Zealand. Ultrafresh is a leading brand in the mouthwash segment in these countries. Intense competition from a number of major international brands continues to affect the whitening toothpolish category; however Pearl Drops maintained a strong showing in Australia as well as in England, Germany, Switzerland, Holland and Italy. During the year, Pearl Drops was successfully established in Poland. Denture adhesive sales increased in Italy as sales of the Orasiv brand in pharmacies have been complemented by mass-market sales under the Rigident name. The home pregnancy and ovulation market segments continue to be characterized by an increasing number of private label brands and severe price competition; however the Division has maintained a strong presence for its brands in Australia, Canada, Italy, England and Mexico.

At the end of fiscal 2000, the Trojan brand of condoms attained the number one market share in Canada. In just over a year, the brand's market share has grown from 36% at the end of 1998 to the current 41% share. Our brands of topical analgesic products, Antiphlogisine Rub A-535 maintained its leading position in Canada and Dencorub continued to perform well in Australia.

The Division's line of OTC health care and pharmaceutical products maintained strong positions in a number of foreign markets. In Canada, higher sales were achieved for Gravol antinauseant, Ovol antiflatulent and Bentasil throat lozenges. In France, Sterimar, a nasal decongestant, continued to grow and expand its leading market share. OTC health care sales in Italy were very strong, led by Cerulisina, a preparation to remove ear wax, NeoEmocicatrol, a topical coagulant, and Verelait, a lactose-based laxative, a product acquired during the year.

~~In Mexico, pharmaceutical sales advanced to record levels due to the Pangavit line of vitamin supplements, Colfur, an antidiarrheal, and Somalgesic, an analgesic muscle relaxant.~~

Professional diagnostic sales in France posted moderate growth from the introduction of several new products, including tests for assessing lipid metabolism and for diagnosing early stages of toxoplasmosis. A new confirmatory test for detecting a broad range of parasitic antigens strengthened our leadership position in parasitology testing. Our subsidiary in Italy continues to expand its extensive product lines with new tests in both enzyme and radioimmunoassay technologies. The introduction of new infectious diseases screening and confirmatory tests, along with tests for cardiovascular disease and autoimmunity has helped maintain strong sales in Europe. The Isolator microbiology system continues to maintain successful niche markets in Europe and Canada.

~~RESEARCH & DEVELOPMENT~~

~~Expenses for research and development totaled $28,508,000 for the fiscal year ended March 31, 2000, compared to $25,846,000 in the prior fiscal year.~~

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document FDA. A clinical trial in patients with ovarian cancer is in progress. Additional clinical trials in patients with other malignancies, including leukemia and brain cancer, are planned for the coming year.

~~Two multicenter Phase III studies showed that Astelin Nasal Spray is effective for treating vasomotor (perennial, nonallergic) rhinitis. A Supplemental~~

New Drug Application was submitted to the FDA for use in adults with vasomotor rhinitis. If approved, Astelin Nasal Spray would be indicated for both allergic and nonallergic vasomotor rhinitis. Another Supplemental New Drug Application was submitted for Astelin Nasal Spray's use for children under 12 years old and FDA approval was received in May, 2000. The Astelin tablet NDA for allergic rhinitis is pending at the FDA. The Company has not decided whether to seek final approval for this NDA.

The Felbatol (felbamate) Patient Registry, introduced in 1997, continues to provide useful patient data. The Registry will help determine if a monitoring test can be developed that will then allow Felbatol to be used with greater safety for patients with epilepsy. Over one thousand new patients were enrolled in the Registry by the end of fiscal 2000.

~~The Company has an option to license a new chemical entity, fluorofelbamate. In preclinical studies, this entity has four to ten times the antiseizure effectiveness demonstrated by felbamate.~~

~~FACILITIES~~

In order to meet expected demand for Trojan condoms, an expansion of our condom manufacturing facility in Colonial Heights, Virginia was approved in fiscal 1998. The expansion was completed on time in fiscal 2000.

~~* * *~~

We appreciate the ongoing trust and confidence of the consumers and professionals who use our products, and the loyal support of our employees, shareholders and suppliers. We thank them for their interest and confidence in Carter-Wallace.

~~Henry H. Hoyt, Jr., Chairman of the Board and Chief Executive Officer~~

~~Ralph Levine President and Chief Operating Officer~~

~~June 13, 2000~~

~~Carter-Wallace, Inc. and Subsidiaries~~

~~SUMMARY OF SELECTED FINANCIAL DATA~~

~~------~~

(a) Reflects one-time charges against pre-tax earnings of $42,000 ($24,780 after tax or $.54 per share) related to the closure of the Trenton facility, restructuring charges and net adjustments to the provision for loss on Felbatol (felbamate) and the discontinuance of the Organidin (iodinated glycerol) product line.

~~------~~

~~QUARTERLY DATA ON COMMON STOCK~~

~~The high and low selling prices of the Company's common stock, principally traded on the New York Stock Exchange (symbol CAR), for the two most recent fiscal years were as follows:~~

FISCAL YEARS ENDED MARCH 31 ------2000 1999 ------QUARTER ENDED HIGH LOW HIGH LOW ------June 30 $18 1/4 $17 3/16 $18 9/16 $16 13/16 September 30 18 9/16 17 9/16 19 1/2 14 5/8 December 31 18 7/8 17 7/16 19 11/16 14 3/8 March 31 19 9/16 17 7/16 19 5/8 15 1/2

A dividend of $.06 per share was declared in all four quarters of 2000. A dividend of $.04 per share was declared in the first quarter of 1999 and $.06 per share was declared in the second, third and fourth quarters of 1999. 7

~~MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION ------NET SALES AND EARNINGS~~

Net earnings were $43,332,000 in the year ended March 31, 2000 compared to net earnings of $28,209,000 in the prior year. Basic earnings per share were $.96 per share in the current year compared to $.62 per share in the prior year, an increase of 55%. On a diluted basis, earnings per share were $.94 per share compared to $.62 per share in the prior year.

~~Net sales in 2000 were $747,668,000 compared to prior year's sales of $668,872,000, a gain of 12%.~~

Sales of Domestic Consumer Products increased by $21,025,000 or 7.4% almost entirely due to higher unit volume. Selling price increases also had a positive effect on sales in this segment. Domestic condom sales increased versus the prior year by 7.4%. Domestic anti-perspirant and deodorant sales increased by 7.2% in comparison to the prior year. Domestic sales of Nair depilatory increased significantly versus 1999.

Domestic Health Care sales increased $25,001,000 or 13.8% in 2000 due to increased unit volume as well as higher selling prices. The unit volume increase was due to the continued growth of Astelin Nasal Spray and the introduction of

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document several new cough/cold prescription products. Sales of most pharmaceutical products in the Domestic Health Care segment continue to be adversely affected by generic competition.

Sales of International products increased $32,770,000 or 16.0% in 2000 due to higher unit volume and, to a lesser extent, selling price increases. A significant portion of the unit volume increase related to the acquisition of the Barbara Gould line of skin care products in France and product introductions. Lower foreign exchange rates had the effect of decreasing sales in the current year period by approximately $10,400,000.

~~Net sales in 1999 were $668,872,000 compared to prior year's sales of $662,229,000.~~

Sales of Domestic Consumer Products increased $6,547,000 or 2.4% in 1999 almost entirely due to higher unit volume. Domestic condom sales increased 10.8% over the prior year. Domestic anti-perspirant and deodorant sales declined 5.5% in comparison to the prior year.

Domestic Health Care sales decreased $7,804,000 or 4.1% in 1999 due to reduced unit volume. However, sales of Astelin Nasal Spray were higher than in the prior year. Selling price increases had a positive effect on sales in this segment.

Sales of International products increased $7,900,000 or 4.0% in 1999 versus the prior year due to higher unit volume and selling price increases. A portion of the unit volume increase related to acquisitions of consumer products in the United Kingdom and Italy. Lower foreign exchange rates had the effect of decreasing sales in 1999 by approximately $6,700,000.

Interest income increased in 2000 by $646,000 or 14% from the prior year. In 1999 interest income was higher than 1998 by $813,000. The increase in both years was due primarily to a higher level of interest bearing investments.

~~Other income decreased by $3,470,000 versus 1999. In 1999 other income increased by $8,291,000 versus the prior year. See comments in the Astelin section below.~~

~~COSTS AND EXPENSES~~

Cost of goods sold as a percentage of net sales was 36.5% in 2000, 37.9% in 1999 and 36.4% in 1998. The variations from year to year were due primarily to changes in product mix. Throughout this period the Company has taken steps to minimize the effects of higher costs by selective price increases and cost control and reduction measures.

~~Advertising, marketing and other selling expenses in 2000 increased $25,805,000 or 9.9% as a result of higher spending principally in the International and~~

MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION (CONTINUED) ------Domestic Health Care segments. Spending was higher in the International segment due in part to promotional support for the recently acquired Barbara Gould product line and product introductions. Spending was higher in the domestic Health Care segment partly as a result of costs associated with the introduction of a reformulated version of an existing product and product introductions. In 1999, advertising, marketing and other selling expenses increased from the prior year by $988,000 or 0.4% as a result of higher spending in the Domestic Health Care and International segments. Spending was lower in the Domestic Consumer Products segment, primarily media advertising.

Research and development expenses increased in 2000 by $2,662,000 or 10.3% due mostly to increased spending in the Domestic Health Care segment, including higher spending for taurolidine. In 1999, research and development expenses decreased $2,939,000 or 10.2%, primarily as a result of lower spending in the Domestic Consumer Products segment related to non-recurring prior year employee termination costs.

In 2000, general and administrative expenses decreased by $1,383,000 or 1.6% due largely to non-recurring prior year employee termination costs related to organizational changes. General and administrative expenses increased $2,153,000 or 2.6% in 1999 due largely to the aforementioned organizational changes.

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Interest expense increased in 2000 by $122,000 or 2.7%. In 1999, interest expense increased by $184,000 or 4.3% over the prior year. Both of these increases related to higher levels of borrowing.

Other expenses increased in 2000 by $4,580,000 or 58.7% due to higher non-cash charges related to incentive plans, and other miscellaneous expenses. In 1999, other expenses increased by $1,614,000 or 26.1% due to higher non-cash charges related to incentive plans and amortization of intangibles.

~~The consolidated income tax rate in 2000, 1999 and 1998 was 39%.~~

~~TAUROLIDINE~~

~~ASTELIN~~

In July 1998, the Company entered into a joint venture agreement with ASTA Medica AG with an effective date of November, 1997. Under the terms of the agreement the Company is responsible for all manufacturing, selling, marketing and administrative activities for Astelin and Depen, another product licensed from ASTA Medica AG, and receives compensation for these activities from the joint venture. Included in other income is $3,981,000 in 2000, $6,782,000 in 1999 and $645,000 in 1998 related to ASTA Medica's share of joint venture operations.

~~FELBATOL (FELBAMATE)~~

As previously reported, in the years ended March 31, 1995 and 1996 the Company incurred one-time charges to pre-tax earnings totaling $45,980,000 related to use restrictions for Felbatol. Depending on future sales levels, additional inventory write-offs may be required. If for any reason the product at some future date should no longer be available in the market, the Company will incur an additional one-time charge, consisting primarily of inventory write-offs and anticipated returns of product currently in the market, in the range of $15,000,000 on a pre-tax basis. 9

~~MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION (CONTINUED) ------LIQUIDITY AND CAPITAL RESOURCES~~

Funds provided from operations and the Company's short-term investments and cash equivalents are the main source for financing working capital requirements, additions to property, plant and equipment, the payment of dividends and the purchases of treasury stock. External borrowings are incurred as needed to satisfy cash requirements related to seasonal business fluctuations and to finance major facility expansion programs and major acquisitions.

At March 31, 2000, the Company had available various bank credit lines amounting to $180,200,000 consisting of $160,000,000 in domestic credit lines and $20,200,000 in foreign credit lines, of which $1,047,000 of the foreign lines were utilized at March 31, 2000. The domestic lines are made up of a $150,000,000 revolving credit facility expiring on October 1, 2000 and $10,000,000 in an uncommitted credit line.

~~In fiscal 1999, the Company borrowed approximately $15,200,000 to finance International acquisitions.~~

~~Inventory levels increased in both 2000 and 1999 over the previous years due to a planned increase in condom inventory as well as new product introductions and acquisitions.~~

Under stock repurchase programs approved by the Company's Board of Directors, the Company purchased 246,000 shares at a cost of $3,885,000 in the year ended March 31, 1999 and 945,000 shares at a cost of $15,890,000 in the year ended

~~QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT FINANCIAL MARKET RISK~~

~~There has been no material impact on operations from financial market risk exposure during the year ended March 31, 2000.~~

~~YEAR 2000 COMPLIANCE~~

The Company successfully implemented a plan addressing Year 2000 technology compliance for its information technology ("IT") and non-IT systems. The cost of the entire project was approximately $1,500,000 on a pre-tax basis.

~~CAPITAL EXPENDITURES~~

Capital expenditures were $18,056,000 in 2000, $17,271,000 in 1999, and $15,676,000 in 1998. An expansion of the Company's condom manufacturing facility in Colonial Heights, Virginia was approved in fiscal 1998. The expansion was completed on time in fiscal 2000.

DESCRIPTION OF BUSINESS SEGMENTS ------The Company is engaged in the manufacture and sale of a diversified line of products in the Domestic Consumer Products, Domestic Health Care and International business segments described below:

~~DOMESTIC CONSUMER PRODUCTS~~

These products are promoted directly to the consumer by television and other advertising media and are sold to wholesalers and various retailers. They are manufactured and sold by our consumer products divisions and some are sold throughout the rest of the world by various subsidiaries and distributors. Principal products include:

* Arrid Extra Dry and Arrid XX anti-perspirants and deodorants * Lady's Choice anti-perspirants and deodorants * Answer and First Response at-home pregnancy and ovulation test kits; First Response pregnancy planning kit and urinary tract infection kit * Carter's laxative * H-R lubricating jelly * Nair depilatories, waxes and bleach * Pearl Drops whitening toothpolish and whitening toothpaste * Rigident denture adhesive * Trojan, Class Act, Naturalamb and Supra condoms * Boundary dog and cat repellants * Fresh 'n Clean grooming products, stain and odor remover and puppy housebreaking pads * Lassie and Tiny Tiger pet product lines * Linatone food supplement * Twinco chain collars and leads, slicker brushes and combs

DOMESTIC HEALTH CARE Health care products are promoted primarily to physicians, pharmacists, hospitals, laboratories and clinics by a staff of specially trained professional sales representatives and by advertising in professional journals. These products are manufactured and sold by our professional products divisions and some are sold throughout the rest of the world by various subsidiaries and distributors. Principal products include:

* Astelin Nasal Spray for the treatment of symptoms of seasonal allergic rhinitis * Felbatol for the treatment of seizures associated with epilepsy

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document * Organidin NR family of expectorants/antitussives * Ryna line of cough/cold products * Tussi-12 cough/cold product * Soma brand muscle relaxants * Butisol sedative hypnotic * Depen penicillamine for severe rheumatoid arthritis * Doral sedative hypnotic * Lufyllin xanthine bronchodilator * Maltsupex laxative * Vo-SoL topical antibacterial and antifungal agent * Analyst physician office chemistry system * Clearview product line of rapid tests for the determination of pregnancy, group A streptococcus, chlamydia and C. difficile * Wampole and other branded enzyme and fluorescent immunoassay tests to detect a broad range of infectious and autoimmune diseases * Isostat product line to aid in the detection of micro-organisms in blood * MicroTrak line of immunoassay products for the detection of sexually transmitted diseases, primarily chlamydia * Mono-Test, Mono-Latex and Mono-plus for the detection of mononucleosis * Stat-Crit portable instrument for use in measuring blood hematocrit levels

~~------INTERNATIONAL In addition to many of the products listed above, the Company sells the following products exclusively in certain International markets:~~

CONSUMER PRODUCTS * Anne French facial cleansing products * Barbara Gould facial beauty and cleansing products * Bi-Solution acne treatment products * Cerox adhesive tapes and bandages * Confidelle, Discover and Gravix at-home pregnancy test kits * Cossack line of men's grooming products * Curash line of skin care products * Email Diamant toothpastes * Eudermin line of skin care and toiletry products * Femfresh line of feminine hygiene products * GranVista non-prescription eyeglasses * Lineance line of anti-cellulite and associated skin care products * Odontovax line of oral hygiene products * Orasiv denture adhesive * Poupina line of skin care and toiletry products * Taky depilatories and waxes * Ultrafresh mouthwash and breath freshening products

HEALTH CARE * Antiphlogistine Rub A-535 and Dencorub topical analgesics * Atasol analgesic/antipyretic * Bentasil medicated throat lozenges * Cerulisina otic solution * Diovol antacid products * Gravol antinauseant * Jordan toothbrushes * Maltlevol and Pangavit vitamin supplements * Ovol antiflatulent * Sterimar nasal decongestant * Technogenetics line of diagnostic tests for thyroid metabolism, fertility/pregnancy conditions and other hormonal (endocrine) disorders 11

~~Carter-Wallace, Inc. and Subsidiaries~~

~~CONSOLIDATED BALANCE SHEETS AT MARCH 31, 2000 AND 1999~~

~~See accompanying notes to consolidated financial statements.~~

~~See accompanying notes to consolidated financial statements. 13~~

~~Carter-Wallace, Inc. and Subsidiaries~~

~~CONSOLIDATED STATEMENTS OF EARNINGS, RETAINED EARNINGS AND COMPREHENSIVE EARNINGS~~

~~THREE YEARS ENDED MARCH 31, 2000~~

~~See accompanying notes to consolidated financial statements.~~

~~CONSOLIDATED STATEMENTS OF CASH FLOWS~~

~~THREE YEARS ENDED MARCH 31, 2000~~

~~See accompanying notes to consolidated financial statements. 15~~

~~Carter-Wallace, Inc. and Subsidiaries~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES~~

~~Principles of Consolidation~~

~~The consolidated financial statements include the accounts of Carter-Wallace, Inc. and all of its subsidiaries (the "Company"). All significant intercompany transactions have been eliminated.~~

~~Revenue Recognition Policy~~

~~Revenue is recognized when products are shipped.~~

~~Use of Estimates~~

The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and use assumptions that affect certain reported amounts and disclosures. Actual amounts may differ.

~~Cash Equivalents and Short-term Investments~~

Cash equivalents consist of short-term securities with maturities of three months or less when purchased. Investments with a maturity of greater than three months but less than one year are classified as short-term investments. The carrying value of cash equivalents and short-term investments approximated fair value at March 31, 2000 and 1999.

~~Inventories~~

Inventories are valued at the lower of cost or market on the first-in, first-out (FIFO) method, except for certain domestic inventories which are stated at cost on the last-in, first-out (LIFO) method.

~~Property, Plant and Equipment~~

Depreciation is provided over the estimated useful lives of the assets, principally using the straight line method. Machinery, equipment and fixtures are depreciated over a period ranging from five to twenty years. Buildings and improvements are depreciated over a period ranging from twenty to forty years. Leasehold improvements are amortized on a straight line basis over the life of the related asset or the life of the lease, whichever is shorter. Expenditures for renewals and betterments are capitalized. Upon sale or retirement of assets, the appropriate asset and related accumulated depreciation accounts are adjusted and the resultant gain or loss is reflected in earnings. Maintenance and repairs are charged to expense as incurred.

~~Intangible Assets~~

The excess of purchase price of businesses acquired over net assets at date of acquisition is assessed to the product or group of products which constitute the business acquired and amortized over no longer than 40 years for amounts relating to acquisitions subsequent to October 31, 1970. The cost of patents, formulae and contracts is amortized on a straight line basis over their legal or contractual lives. The cost of trademarks is being amortized over no longer than 40 years for amounts relating to acquisitions subsequent to October 31, 1970. Amounts related to intangibles acquired prior to October 31, 1970 are not material.

The Company's policy in assessing the recoverability of intangible assets is to compare the carrying value of the intangible asset with the undiscounted cash flow generated by products related to the intangible asset. In addition, the Company continually evaluates whether adverse developments indicate that an intangible asset may be impaired.

Deferred income taxes are determined using the liability method based on the estimated future tax effects of differences between the financial statement and tax bases of assets and liabilities given the provisions of enacted tax laws.

~~Advertising and Marketing Costs~~

~~Advertising, promotion and other marketing costs are charged to earnings in the period in which they are incurred.~~

~~Earnings Per Common Share~~

Basic earnings per share is based on the average number of common and Class B common shares outstanding during the year: 45,019,000 in 2000, 45,180,000 in 1999 and 46,093,000 in 1998. In computing diluted earnings per share, incremental shares issuable upon the assumed exercise of stock options and the vesting of stock awards have been added to the average shares outstanding. Incremental shares for purposes of calculating diluted earnings per shares amounted to 1,033,200 in 2000, 688,500 in 1999 and 441,200 in 1998.

~~2. INVENTORIES~~

Inventories computed on the last-in, first-out (LIFO) method comprised 14% and 13% of inventories included in current assets at year end 2000 and 1999, respectively. If these inventories had been valued on the FIFO inventory method (which approximates current or replacement cost), total inventories would have been approximately $9,500,000 and $10,100,000 higher than reported at March 31, 2000 and 1999, respectively. Felbatol inventories of $6,387,000 at March 31, 2000 and $8,275,000 at March 31, 1999, not expected to be sold in the next fiscal year, are included in Other Assets.

~~3. TAXES ON INCOME~~

~~The provision for taxes on income was as follows:~~

~~The components of income before taxes were as follows:~~

~~Domestic $49,696,000 $27,478,000 $27,367,000 Foreign 21,340,000 18,766,000 17,388,000 ------Total $71,036,000 $46,244,000 $44,755,000 ======~~

Deferred income taxes are provided for temporary differences between the financial statement and tax bases of the Company's assets and liabilities. The temporary differences gave rise to the following deferred tax assets and

Realization of the Company's deferred tax assets is dependent on generating sufficient taxable income in future years. Although realization is not assured, management believes it is more likely than not that all of the deferred tax assets will be realized, except for the valuation allowance amount. However, the deferred tax assets could be reduced if estimates of future taxable income are lowered. A valuation allowance is provided when it is more likely than not that some portion of the deferred tax assets will not be realized.

~~The effective tax rate of the provision for taxes on income as compared with the U.S. Federal statutory income tax rate was as follows:~~

~~The U.S. Internal Revenue Service completed its examination of the Company's tax returns through fiscal year 1995 resulting in no material impact on the Company.~~

~~4. FOREIGN OPERATIONS~~

Net current assets and net sales of the Company's foreign subsidiaries and branches operating outside of the United States, and the Company's equity in net assets and net earnings of such operations were:

~~The equity adjustment from foreign currency translation is comprised of the following:~~

~~5. NOTES PAYABLE AND LONG-TERM DEBT~~

~~Notes Payable~~

Notes payable consisting of borrowings from banks under available lines of credit were $1,047,000, $2,752,000 and $3,402,000 and the current portion of long-term debt was $4,169,000, $3,103,000 and $8,471,000 at March 31, 2000, 1999 and 1998, respectively. In addition, other short-term notes payable in international operations amounted to $1,495,000, $2,279,000 and $5,981,000 at March 31, 2000, 1999 and 1998, respectively. Additional data related to the amount of short-term borrowings is not presented since it is immaterial.

The Company has available various bank credit lines amounting to $180,200,000 of which $160,000,000 is for domestic borrowings and $20,200,000 is for international borrowings. The availability of the lines of credit is subject to review by the banks involved. Commitment fees are immaterial.

~~Long-Term Debt Long-term debt at March 31 is summarized below:~~

~~Maturities of long-term debt for each of the four fiscal years 2002 through 2005 are $2,604,000, $8,232,000, $13,419,000 and $10,507,000, respectively.~~

~~Interest on the City of Decatur, Illinois Industrial Revenue Bond is 70% of the prime rate through December, 2000, adjustable thereafter.~~

~~With respect to the Italian lira loan payable through December 31, 2004, interest on this loan is the Euro Interbank Offered Rate plus a nominal increment.~~

With respect to the French franc loan payable February 24, 2003, interest is adjustable based on the Paris Interbank Offered Rate plus a nominal increment, adjusted quarterly and was converted to a fixed rate at the inception of the loan.

~~With respect to the French franc loan payable through April 1, 2006, interest on this loan is the Euro Interbank Offered Rate plus a nominal increment.~~

The Italian lira loans due July 1, 2001 are secured by irrevocable letters of credit. Commitment fees are immaterial. Interest on these loans is the Milan Interbank Offered Rate plus a nominal increment, adjusted quarterly.

The Company issued promissory notes, payable no later than September 12, 2000, in connection with the acquisition of the net assets of Youngs Drug Products Corporation and affiliates. Prepayments of all or portions of the notes are required as certain contractual conditions are satisfied.

~~With respect to the French franc loan payable through September 18, 2003, interest on this loan is the Euro Interbank Offered Rate plus a nominal increment.~~

Certain of the Company's long-term debt agreements contain covenants which require the Company to maintain a minimum level of net worth and limit total long-term liabilities to a stated percentage of total capitalization.

~~The fair value of long-term debt, including current maturities, was $60,366,000 at March 31, 2000 and $70,532,000 at March 31, 1999.~~

~~6. COMMON STOCK, CLASS B COMMON STOCK AND CAPITAL IN EXCESS OF PAR VALUE~~

The Company has two classes of common stock with a par value of $1.00 per share. Class B common stock generally has ten votes per share on all matters and votes as a class with common stock which has one vote per share. The transfer of Class B common stock is restricted; however, Class B common stock is at all times convertible into shares of common stock on a share-for-share basis. Common stock and Class B common stock have identical rights with respect to cash dividends and upon liquidation.

~~Activity for the years ended March 31, 2000, 1999 and 1998 was as follows:~~

The cost of treasury stock over or under the market value of the stock on the date of the award or issuance has been applied to capital in excess of par value, as well as any tax benefit on the appreciation of restricted stock awards.

Shares issued from treasury stock for stock awards amounted to 239,100, 28,000 and 36,400 shares at a cost of $3,703,000, $429,000 and $502,000 in 2000, 1999 and 1998, respectively. Shares purchased and added to treasury stock amounted to 27,700, 274,400 and 993,000 shares at a cost of $492,000, $4,381,000 and $16,685,000 in 2000, 1999 and 1998, respectively. In 1999, the Company exchanged 155,500 shares with a value of $2,125,000 previously issued as restricted stock awards for an equivalent number of deferred stock awards.

~~7. RETIREMENT PLANS AND OTHER POSTRETIREMENT BENEFITS (DOLLARS IN THOUSANDS)~~

The Company has several contributory and non-contributory pension plans in which substantially all employees with over one year of service participate. The Company's funding policy is to make annual contributions to these plans in amounts equal to the minimum required by applicable regulations. The plans' assets are invested primarily in common stocks and corporate and government bonds.

The Company also provides certain health care and insurance benefits for retired employees. The cost of the benefits is accrued during the years the employees render service until they attain full eligibility for those benefits.

~~The components of the pension and postretirement benefit expense for the years ended March 31, 2000, 1999 and 1998 were:~~

~~The components of the changes in the benefit obligation were as follows:~~

~~The components of the changes in plan assets were as follows:~~

Fair value of plan assets at beginning of year $263,568 $241,454 -- -- Actual return on plan assets 36,754 36,859 -- -- Employer contributions 1,212 2,257 $ 3,229 $ 1,820 Plan participants' contributions 367 331 -- -- Effect of exchange rate changes 802 (432) -- -- Benefits paid (15,512) (16,901) (3,229) (1,820) ------Fair value of plan assets at end of year $287,191 $263,568 -- -- ======

~~The following is a reconciliation of the funded status of the plans to the Company's balance sheets at March 31:~~

Funded status $ 56,451 $ 33,683 $(50,632) $(57,776) Unrecognized actuarial (gain) (87,187) (43,255) (18,905) (9,805) Unrecognized prior service cost 28,202 10,353 (771) (1,660) Unrecognized transition amounts 265 (1,801) -- -- Minimum liability adjustment (3,206) (5,509) ------Accrued benefit cost $ (5,475) $ (6,529) $(70,308) $(69,241) ======

~~Amounts recognized in the Company's balance sheets at March 31 were as follows:~~

Other assets $ 29,533 $ 24,745 -- -- Accrued expenses (12,582) (14,093) -- -- Long-term liabilities (22,426) (17,181) $(70,308) $(69,241) Intangible assets 3,206 5,509 ------Net amount recognized $ (2,269) $ (1,020) $(70,308) $(69,241) ======

~~Plan amendments made in fiscal 2000 included a change related to credited service and a federally mandated actuarial change related to mortality tables.~~

~~At March 31, the only pension plans with accumulated benefit obligations in excess of plan assets were unfunded non-qualified plans which had no assets. Information on these plans is as follows:~~

~~2000 1999 ------Projected Benefit Obligation $45,782 $39,248 ======Accumulated Benefit Obligation $31,568 $28,303 ======~~

~~The principal assumptions used in determining 2000, 1999 and 1998 actuarial values were:~~

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document Discount rate 6.75 - 8% Rate of increase in compensation levels 4 - 6% Expected long-term rate of return on plan assets 8 -10%

Expense for the employee savings plan under which the Company matches the contributions of participating employees up to a designated level was $1,514,000, $1,478,000 and $1,473,000 in 2000, 1999 and 1998, respectively.

The assumed health care cost trend rate used to measure the accumulated postretirement benefit obligation for those over age 65 is 9 percent for 2000 trending to 5 percent over a four year period. For those under age 65, the trend rate is 6.7 percent for 2000 trending to 5 percent over a four year period. A one percent increase or decrease in the assumed respective annual medical cost trend rate would change the accumulated postretirement benefit obligation by approximately $2,700,000 and the service and interest components of net postretirement benefit expense by approximately $300,000.

~~8. LONG-TERM INCENTIVE PLANS~~

~~1977 Restricted Stock Award Plan~~

The plan as amended provides for awards of not more than 2,750,000 shares of common stock, subject to adjustments for stock splits, stock dividends and other changes in the Company's capitalization, to key employees, to be issued either immediately after the award or at a future date. As a result of the three-for-one stock split in April, 1992 and the issuance of the Class B common stock in 1987, the 2,750,000 shares of common stock provided for in the Plan have been adjusted to 5,593,154 shares. As provided in the Plan and subject to restrictions, shares awarded may not be disposed of by the recipients for a period of five years from the date of the award. Cash dividends on shares awarded are held by the Company for the benefit of the recipients, subject to the same restrictions as the award. Such dividends (without interest) are paid to the recipients upon lapse of the restrictions. The cost of the awards, equal to the fair market value at the date of award, is being charged to operations in equal annual amounts over a five year period commencing at the date of the award.

~~Cumulative awards as of March 31, 2000 amount to 3,466,250 shares. There were no new awards granted in any of the past three fiscal years.~~

The financial statements reflect the transfer of the awarded shares from treasury stock as of the date of their issuance. For shares that have been issued, the market value at the date of the awards was $540,000, $708,000 and $1,118,000 in 2000, 1999 and 1998, respectively. The cost of treasury stock for these awards was $428,000, $429,000 and $502,000 in 2000, 1999 and 1998, respectively.

~~1996 Long-Term Incentive Plan~~

The plan as amended provides for awards of not more than 9,000,000 shares of common stock, subject to adjustment for stock splits, stock dividends and other changes in the Company's capitalization, to key employees, to be issued either immediately after the award or at a future date. The awards consist of restricted and/or deferred stock or options, or a combination thereof. At March 31, 2000, 5,856,329 shares had been granted under the 1996 long-term incentive plan.

~~Stock Options~~

Under the plan, both qualified and non-qualified options may be granted to key executive employees at fair market value at the date of grant. The right to exercise the options, in installments, commences one year from the date of grant and expires ten years after that date. As permitted by Statement of Financial Accounting Standards ("SFAS") No. 123, "Accounting for Stock-Based Compensation", the Company has chosen to continue to account for options granted under the plan using the intrinsic value method. Accordingly, no compensation expense has been recognized for these options. Had the fair value method of accounting, as defined in SFAS No. 123, been applied to the Company's stock options, the Company's net income would have been reduced by approximately $4,510,000 or $.10 per share in 2000, $3,390,000 or $.08 per share in 1999 and $1,940,000 or $.04 per share in 1998. The weighted-average fair market value of

Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document options granted was $7.86, $7.71 and $7.31 in 2000, 1999 and 1998, respectively. For purposes of fair market value disclosures, the fair market value of an option grant was estimated on the date of grant using the Black-Scholes option-pricing model with the following weighted-average assumptions:

~~A summary of the status of stock options granted under the plan as of March 31, 2000, 1999 and 1998 and changes during the years ended on those dates is presented below:~~

~~The following table summarizes information about stock options outstanding at March 31, 2000:~~

~~Stock Awards~~

Restricted and/or deferred stock awards which are awarded subject to restrictions, may not be disposed of by the recipient for a period of four years from the date of the award. Cash dividends on shares awarded are held by the Company for the benefit of the recipients, subject to the same restrictions as the award. Such dividends (without interest) are paid to the recipients upon lapse of the restrictions. The cost of the awards, equal to the fair market value at the date of award, is being charged to operations in equal annual amounts over the four-year vesting period commencing at the date of the award. Amortization related to stock awards made under the 1996 Long Term Incentive Plan amounted to $5,729,000, $2,860,000 and $1,498,000 in 2000, 1999 and 1998, respectively. If a recipient's employment terminates by reason of retirement, death or permanent disability, the award would vest immediately with the unamortized value of the award charged to operations at that time.

~~Award transactions for the past three years were:~~

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The financial statements reflect the transfer of the awarded shares from treasury stock as of the date of their issuance. Outstanding awards of 1,323,882 shares at March 31, 2000 will be issued at a future date no later than four years from the date of the award. For shares that have been issued, the market value at the date of the awards was $2,911,000 in 2000. The cost of treasury stock for these awards was $3,275,000 in 2000. The differences between the market value at the date of the awards and the cost of the treasury stock were included in capital in excess of par value or retained earnings.
9. ACQUISITIONS
At the beginning of fiscal 1999, the Company acquired the Femfresh line of feminine hygiene products in England for approximately $3,600,000.
In February, 1999, the Company acquired the Barbara Gould line of skin care products in France for approximately $15,100,000. Sales of this product line commenced in the fiscal year beginning April 1, 1999. An additional payment may be required upon achievement of certain sales objectives.
In December, 1997, the Company acquired Sanodent S.r.l. in Italy for approximately $3,800,000. Sanodent manufactures and sells denture adhesives under the Orasiv brand name.
In February, 1998, the Company acquired the Anne French line of skin care products in England for approximately $1,600,000.
These acquisitions are being accounted for by the purchase method and, accordingly, their results of operations are included in the Company's results of operations from the acquisition date. Pro forma results of operations are not presented since the effect would not be material.
10. SHORT-TERM INVESTMENTS
At March 31, 2000 and 1999, short-term investments were intended to be held to maturity and have remaining maturities of less than one year. The amortized cost approximated fair value. The amortized cost of certificates of deposit were $19,649,000 and $12,977,000, respectively, in 2000 and 1999. The amortized cost of commercial paper was $21,501,000 and $13,174,000 in 2000 and 1999. In addition, included in 1999 are Canadian government securities in the amount of $5,719,000.
11. BUSINESS SEGMENTS (DOLLARS IN THOUSANDS)
The Company's reportable business segments are Domestic Consumer Products, Domestic Health Care and International. Information on the Company's Business Segments is presented below.
Domestic Consumer Products primarily include anti-perspirants and deodorants, condoms, at-home pregnancy and ovulation test kits, hair removal products, tooth whitening products and various pet products. These products are promoted directly to the consumer by television and other advertising media and are sold to wholesalers and various retailers. They are manufactured and sold by the Company's consumer products divisions.
Domestic Health Care products primarily include prescription pharmaceuticals as well as professional diagnostic products. These products are promoted to physicians, pharmacists, hospitals, laboratories and clinics by a staff of
Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document specially trained professional sales representatives and by advertising in professional journals. These products are manufactured and sold by the Company's health care products divisions.
International products primarily include consumer products such as anti-perspirants and deodorants, condoms, at-home pregnancy and ovulation test kits, skin care and oral hygiene products, as well as health care products such as over the counter pharmaceuticals and diagnostic products. These products are sold throughout the world by various subsidiaries and distributors. International products include many of the same consumer and health care products which are sold domestically, as well as certain consumer and health care products which are sold exclusively in international markets.
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Some of the Company's domestic divisions sell to a small number of high volume customers, the largest of which accounted for approximately 9.6%, 9.6% and 9.0% of consolidated net sales in 2000, 1999 and 1998, respectively.
MARCH 31 ------2000 1999 1998 ------ Sales Domestic Consumer Products $ 304,253 $283,228 $276,681 Domestic Health Care 206,158 181,157 188,961 International 237,257 204,487 196,587 ------Consolidated $ 747,668 $668,872 $662,229 ======
Operating Profit Domestic Consumer Products $ 58,585 $ 44,807 $ 33,409 Domestic Health Care 48,729 40,282 49,115 International 17,765 14,969 13,664 Domestic net interest expense (1,481) (2,037) (2,044) Other (expense) net of other income (15,037) (12,091) (7,606) General Corporate expenses (37,525) (39,686) (41,783) ------Earnings before taxes on income $ 71,036 $ 46,244 $ 44,755 ======
Identifiable Assets Domestic Consumer Products $ 219,359 $211,776 $210,011 Domestic Health Care 105,885 119,783 122,784 International 187,230 177,759 154,501 Corporate Assets 249,762 212,634 206,317 ------Total Assets $ 762,236 $721,952 $693,613 ======
Depreciation and Amortization Domestic Consumer Products $ 11,778 $ 10,805 $ 10,139 Domestic Health Care 6,161 6,187 6,027 International 5,535 5,339 5,195 ------Total Operating Segments $ 23,474 $ 22,331 $ 21,361 ======
Capital Expenditures Domestic Consumer Products $ 7,984 $ 12,553 $ 8,038 Domestic Health Care 1,246 1,678 4,094 International 8,331 2,838 3,102 ------Total Operating Segments $ 17,561 $ 17,069 $ 15,234 ======
Corporate assets include principally cash and cash equivalents, short-term investments, miscellaneous receivables, deferred taxes and other miscellaneous
Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document assets.
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12. RENTAL EXPENSE AND LEASE COMMITMENTS (DOLLARS IN THOUSANDS)
Rental expense for operating leases with a term greater than one year for 2000, 1999 and 1998 was as follows:
REAL PROPERTY RENTAL REAL SUB-RENTAL NET REAL EQUIPMENT EXPENSE PROPERTY INCOME PROPERTY AND OTHER ------ ~~2000 $ 8,285 $ (2,929) $ 5,356 $ 6,990 1999 8,021 (2,702) 5,319 6,837 1998 8,056 (2,749) 5,307 6,615~~
The real property rental expense for 2000, 1999 and 1998 excludes approximately $1,000, $1,000 and $900, respectively, of rental costs which have been charged to the one-time charges for restructuring of operations and facilities.
Minimum rental commitments, in thousands of dollars, under non-cancellable leases in effect at March 31, 2000 were as follows:
REAL PROPERTY MINIMUM RENTAL REAL SUB-RENTAL NET REAL EQUIPMENT CAPITAL LEASE COMMITMENTS PROPERTY INCOME PROPERTY AND OTHER OBLIGATIONS ------ 2001 $ 9,748 $ (3,235) $ 6,513 $881 $ 547 2002 9,185 (3,462) 5,723 504 445 2003 8,181 (3,462) 4,719 114 285 2004 7,556 (3,462) 4,094 31 212 2005 7,226 (3,462) 3,764 2 199 2006-2012 48,415 (22,718) 25,697 -- 133 ------1,821 Less interest and executory cost (261) ------Present value of minimum lease payments (of which $506 is included in current liabilities) $ 1,560 ======
Included in the real property rental commitments indicated above is approximately $14,600 of future rental costs which were included in the one-time charges for restructuring of operations and facilities. These costs are associated with the subleasing of office space on which the Company holds a long-term lease.
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13. SUPPLEMENTAL FINANCIAL INFORMATION
The following is presented in support of balance sheet captions:
MARCH 31 ------2000 1999 ------(dollars in thousands) Intangible Assets: Excess of purchase price of businesses acquired over the
Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document net assets at date of acquisition $114,738 $121,339 Trademarks 47,889 48,714 Other 28,995 32,525 ------191,622 202,578 Accumulated amortization 66,938 66,189 ------$124,684 $136,389 ======Accounts Payable: Trade $ 45,913 $ 43,388 Other 1,022 696 ------$ 46,935 $ 44,084 ======Accrued Expenses: Salaries and wages $ 31,376 $ 32,920 Advertising and promotion 19,233 21,144 One-time charges 1,373 1,476 Retirement and related plans 13,383 15,411 Other 39,120 36,316 ------$104,485 $107,267 ======Other Long-Term Liabilities: Retirement plans $ 22,426 $ 17,181 One-time charges 8,700 9,867 Other 15,005 11,674 ------$ 46,131 $ 38,722 ======
Income taxes paid were $29,264,000, $21,959,000 and $6,584,000 in 2000, 1999 and 1998, respectively. Interest paid was $4,422,000, $4,527,000 and $4,047,000 in 2000, 1999 and 1998, respectively.
Included in other income is $3,981,000 in 2000, $6,782,000 in 1999 and $645,000 in 1998 related to ASTA Medica's share of joint venture operations.
14. LITIGATION INCLUDING ENVIRONMENTAL MATTER
Environmental Matter
The Company faces potential liability involving waste material generated by the Lambert Kay division at its former manufacturing facility in Winsted, Connecticut. In May 1991, the United States Environmental Protection Agency ("EPA") issued special notice letters under the Comprehensive Environmental Response, Compensation and Liability Act to Lambert Kay and about 50 other potentially responsible parties ("PRPs") notifying them of potential liability with respect to waste deposited at the Barkhamsted-New Hartford landfill in Barkhamsted, Connecticut. In September 1991 and in February 1994, the Company and 21 other PRPs, without admitting liability, entered into consent agreements under which the PRPs agreed to perform certain investigation and engineering evaluation work at the site, including the remedial investigation and feasibility study, and to reimburse EPA for certain costs. The estimated cost of this work is about $4.1 million. The Company's share of this cost is estimated to be $157,000, which includes an allowance for insolvency or nonpayment of other PRPs' shares. To date the Company has paid or received credit for about $140,000. In addition, the Company and other settling PRPs have sued certain nonsettlors for their share of these costs and have obtained some settlement recoveries. Based on preliminary information from the site investigation work (which is not completed), the total cost for performing the current and future work
27 at Barkhamsted, including the site investigation work, is estimated to be from $6 to $32 million. In June 1995, the Connecticut legislature authorized the issuance of bonds to pay for approximately $7 million of the future cleanup costs at the site. The issuance of these bonds is expected to reduce by that amount those cleanup costs subject to PRP funding. Based on expected PRP participation in future cleanup work and other factors, the Company anticipates that its share of projected cleanup costs subject to PRP funding (including
Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document costs incurred to date) will be not more than 4 to 5% of total cleanup costs, and that the Company's total expenditure will therefore range from about $250,000 to $1,500,000. Thus, although applicable environmental law provides for joint and several liability for the cost of cleanup work, based on present estimates, the Company believes that the other PRPs will pay substantially all of their allocated percentage shares of cleanup costs.
The Company believes, based upon the information available at this time, that the environmental matter discussed above will not have a material effect on its financial statements.
Litigation
Two federal securities class action suits filed in 1994 by stockholders against the Company and certain of its present and former officers in the United States District Court, Southern District of New York, were consolidated for all purposes. A Consolidated Amended Complaint was filed, followed by a Second Amended Class Action Complaint. The consolidated action purports to be on behalf of all persons who purchased the Company stock in the period from January 20, 1994 through July 31, 1994. The complaint alleges that certain statements made by the Company with respect to the safety and anticipated future sales of its anti-epilepsy drug Felbatol were false and misleading. Both the Consolidated Amended Complaint and the Second Amended Class Action Complaint, which seek damages in an unspecified amount, were dismissed by the District Court for failure to state a claim upon which relief can be granted. The United States Court of Appeals for the Second Circuit affirmed the dismissal on all claims except those based on allegedly false statements in medical journal advertisements. The Company then moved for judgment on the pleadings with respect to those remaining claims, and the motion was granted. Plaintiffs' appeal is pending.
The Company, along with numerous other drug manufacturers, wholesalers and suppliers, was named in a series of class action suits, the first of which was filed in August, 1994 in the California Superior Court, San Francisco County. These suits were brought on behalf of all California independent retail pharmacists who had purchased any brand name prescription drugs since August, 1989. The complaint alleged that the defendants, including the Company, entered into a conspiracy to fix prices for brand-name prescription drugs and gave lower prices to certain favored purchasers, while the alleged favored prices were denied to the plaintiffs. Plaintiffs are seeking injunctive relief and unspecified trebled compensatory damages, restitution of unspecified amounts by which defendants are alleged to be unjustly enriched and litigation costs, interest and attorney's fees. Class certification of the price-fixing conspiracy claims was granted by order dated June 23, 1995, establishing a class of independent retail pharmacists and small chains with ten or fewer California locations. An individual action brought by two mid-size chain pharmacies was subsequently coordinated with the consolidated class action as an "add-on" case asserting virtually identical claims and demands for relief. Plaintiffs in that action have amended their complaint to seek class certification, which has not been granted. There has been no activity in these cases since 1996 because of the pendency of related actions brought under the federal antitrust laws. The Company believes that the claims against it are materially deficient.
The Company is engaged in litigation with Tambrands Inc. in Supreme Court of the State and County of New York arising out of a patent infringement and misappropriation suit previously filed against both companies in the United States District Court, Southern District of New York, by New Horizons Diagnostics Corporation ("NHDC"), et al. The NHDC suit, which was settled and discontinued in July 1996, asserted claims with respect to certain "gold sol" technology (used in the Company's First Response and Answer home pregnancy and ovulation predictor test kits) that the Company had acquired from Tambrands pursuant to a written purchase agreement in March 1990. The Company paid an immaterial amount toward that settlement. In the pending Supreme Court action, Tambrands seeks reimbursement from the Company of an unspecified portion of the amount paid by Tambrands in settlement of the NHDC suit, and for defense costs. The parties are presently engaged in discovery. The Company believes it has good defenses, under the terms of the purchase agreement, to Tambrands' claim.
The Company is subject to other legal actions arising out of its operations. The Company believes, based on the opinion of counsel, that it has good defenses to such actions and should prevail.
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Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document 15. QUARTERLY FINANCIAL DATA (UNAUDITED)
Quarterly net sales, gross margin, net earnings and earnings per share are set forth in the following table (dollars in thousands, except per share amounts).
QUARTER ENDED ------2000 JUNE 30 SEPT. 30 DEC. 31 MARCH 31 TOTAL YEAR Net sales $199,954 $185,147 $192,066 $170,501 $747,668 Gross margin 124,878 116,215 126,313 107,421 474,827 Net earnings 13,161 9,400 13,956 6,815 43,332 Earnings per share--basic .29 .21 .31 .15 .96 Earnings per share--diluted .29 .20 .30 .15 .94
1999 Net sales $169,662 $169,169 $162,241 $167,800 $668,872 Gross margin 106,247 102,402 99,517 107,259 415,425 Net earnings 9,493 5,916 7,839 4,961 28,209 Earnings per share--basic and diluted .21 .13 .17 .11 .62
16. FELBATOL (FELBAMATE)
As previously reported, in the years ended March 31, 1995 and 1996 the Company incurred one-time charges to pre-tax earnings totaling $45,980,000 related to use restrictions for Felbatol. Depending on future sales levels, additional inventory write-offs may be required. If for any reason the product at some future date should no longer be available in the market, the Company will incur an additional one-time charge, consisting primarily of inventory write-offs and anticipated returns of product currently in the market, in the range of $15,000,000 on a pre-tax basis.
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[KPMG LOGO] 345 Park Avenue New York, NY 10154
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders Carter-Wallace, Inc.:
We have audited the accompanying consolidated balance sheets of Carter-Wallace, Inc. and subsidiaries as of March 31, 2000 and 1999, and the related consolidated statements of earnings, retained earnings and comprehensive earnings, and cash flows, for each of the years in the three-year period ended March 31, 2000. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Carter-Wallace, Inc. and subsidiaries as of March 31, 2000 and 1999, and the results of their operations and their cash flows for each of the years in the three-year period ended March 31, 2000, in conformity with accounting principles generally
Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document accepted in the United States of America.
May 10, 2000
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Carter-Wallace, Inc. and Subsidiaries
BOARD OF DIRECTORS
Henry H. Hoyt, Jr. Chairman and Chief Executive Officer
Ralph Levine President and Chief Operating Officer
Paul A. Veteri Executive Vice President and Chief Financial Officer
David M. Baldwin Chairman, David M. Baldwin Realty Company, Inc.
Dr. Richard L. Cruess Professor of Surgery, Center for Medical Education, McGill University Montreal, Quebec, Canada
Suzanne H. Garcia Owner, La Tierra Beneficiaries (real estate development) and Santa Fe Ranch
Scott C. Hoyt Vice President, New Products Carter Products Division of the Company
Herbert M. Rinaldi Of Counsel Carella, Byrne, Bain, Gilfillan, Cecchi, Stewart & Olstein
SCIENTIFIC ADVISORY BOARD
Joseph S. Harun, M.D., Chairman Former Vice President, Medical and Scientific Affairs Carter-Wallace, Inc.
Paul Calabresi, M.D. Professor of Medicine and Chairman Emeritus, Department of Medicine Brown University Director, Brown-Tufts Cancer Center Providence, RI - Boston, MA
Robert E. Canfield, M.D. Irving Professor of Medicine Columbia University, College of Physicians and Surgeons New York, NY
Barton F. Haynes, M.D. Chairman, Department of Medicine Duke University Medical Center Durham, NC
Noel Rose, M.D., Ph.D. Professor of Pathology, Molecular Microbiology and Immunology Director of Immunology Johns Hopkins University, Schools of Medicine and Public Health Baltimore, MD
Morton K. Schwartz, Ph.D. Chairman, Department of Clinical Laboratories Memorial Sloan Kettering Cancer Center New York, NY
Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document EXECUTIVE OFFICERS Henry H. Hoyt, Jr. Chairman of the Board and Chief Executive Officer Ralph Levine President and Chief Operating Officer Paul A. Veteri Executive Vice President and Chief Financial Officer T. Rosie Albright Vice President, Consumer Products, U.S. John Bridgen, Ph.D. Vice President, Diagnostics, U.S. James C. Costin, M.D. Vice President, Medical and Scientific Affairs Donald R. Daoust, Ph.D. Vice President, Quality Control Thomas G. Gerstmyer Vice President, Pharmaceuticals, U.S. Peter J. Griffin Vice President and Controller Adrian J. L. Huns Vice President, International Michael J. Kopec Vice President, Manufacturing Stephen R. Lang Vice President, Secretary and General Counsel Thomas B. Moorhead Vice President, Human Resources C. Richard Stafford Vice President, Corporate Development James L. Wagar Vice President and Treasurer Mark Wertlieb Vice President, Taxes
DIVISIONAL MANAGEMENT
T. Rosie Albright, President, Carter Products John Bridgen, Ph.D., President, Wampole Laboratories Thomas G. Gerstmyer, President, Wallace Laboratories Adrian J. L. Huns, President, International Michael J. Kopec, President, Manufacturing Thomas M. McShane, President, Lambert Kay
PRINCIPAL SUBSIDIARIES
Howard E. Cocker, Managing Director, Carter-Wallace Limited (United Kingdom) Francois Depoil, President, Laboratoires Fumouze S. A. (France) Gregory J. Drohan, President, Carter-Horner Inc. (Canada) Alan W. Nash, Managing Director, Carter-Wallace (Australia) Pty. Limited Jordi Pruja, Managing Director, Icart S.A. (Spain) Stephen W. Riley, President, Carter Wallace, S. A. (Mexico) Lino Santambrogio, Managing Director, S.p.A. Italiana Laboratori Bouty (Italy) 31
32 Printed in U.S.A.
CARTER-WALLACE, INC. 1345 Avenue of the Americas New York, NY 10105
Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document EXHIBIT 21
SUBSIDIARIES OF THE COMPANY
The following is a list of the active subsidiaries of the Company showing the jurisdiction of incorporation and the percentage of voting securities owned by the Company or by wholly-owned subsidiaries of the Company as of March 31, 2000:
JURISDICTION PERCENTAGE OF OF VOTING NAME OF CORPORATION INCORPORATION SECURITIES ------
Barbara Gould S.A. France 100% Carter-Wallace, N.S. Inc. Delaware 100% Carter-Wallace, O.S. Inc. Delaware 100% Carter-Wallace Limited England 100% Carter-Wallace (Australia) Pty, Limited Australia 100% Carter-Wallace, S.A. Mexico 100% Carter-Wallace FSC Corp. Virgin Islands 100% Carter-Horner Inc. Canada 100% Icart, S.A. Spain 100% International Biological Laboratories, Inc. Maryland 95% Laboratoires Fumouze, S.A. France 100% Sante Beaute S.A. France 100% Sofibel S.A.R.L. France 100% S.p.A. Italiana Laboratori Bouty Italy 100% Technogenetics S.r.l. Italy 100% Tripharma S.A.R.L. France 100%
All of the above subsidiaries are included in the consolidated financial statements of the Company.
Copyright © 2012 www.secdatabase.com. All Rights Reserved. Please Consider the Environment Before Printing This Document EXHIBIT 23
INDEPENDENT AUDITORS' CONSENT
The Board of Directors and Stockholders Carter-Wallace, Inc.
We consent to incorporation by reference in the registration statement (No. 333-00499) on Form S-8 of Carter-Wallace, Inc. of our report dated May 10, 2000, relating to the consolidated balance sheets of Carter-Wallace, Inc. and subsidiaries as of March 31, 2000 and 1999, and the related consolidated statements of earnings, retained earnings and comprehensive earnings, and cash flows, for each of the years in the three-year period ended March 31, 2000, and related financial statement schedule which report appears in the March 31, 2000 Annual Report on Form 10-K of Carter-Wallace, Inc.
KPMG LLP
New York, New York June 13, 2000
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5
12-mos Mar-31-2000 Apr-01-1999 Mar-31-2000 62,638,000 41,150,000 126,469,000 8,030,000 106,268,000 374,018,000 323,913,000 174,503,000 762,236,000 168,571,000 59,941,000 0 0 47,205,000 343,833,000 762,236,000 747,668,000 760,644,000 272,841,000 689,608,000 0 0 4,614,000 71,036,000 27,704,000 43,332,000 0 0 0 43,332,000 .96 .94

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