Church & Dwight Co., Inc. // SEC Filing

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 10-K
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934

FOR THE FISCAL YEAR ENDED DECEMBER 31, 2002 COMMISSION FILE NUMBER 1-10585

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CHURCH & DWIGHT CO., INC.
(Exact name of registrant as specified in its charter)

I.R.S. EMPLOYER IDENTIFICATION
INCORPORATED IN DELAWARE NO. 13-4996950

469 NORTH HARRISON STREET, PRINCETON, NEW JERSEY 08543-5297
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code: (609) 683-5900

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SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT:

NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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Common Stock, $1 par value New York Stock Exchange
Preferred Stock Purchase Rights New York Stock Exchange

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT: None

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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 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
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. | |

Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Act).

Yes |X| No | |

The aggregate market value of the voting and non-voting common equity held by
non-affiliates as of June 28, 2002 (the last business day of the registrant's
most recently completed second fiscal quarter) was approximately $1,203 million.
For purposes of determining this number, 1,388,993 shares of Common Stock held
by affiliates were excluded. For purposes of making this calculation only, the
registrant included all directors, certain executive officers and beneficial
owners of more than ten percent of the Common Stock of the Company as
affiliates. The aggregate market value is based on the closing price of such
stock on the New York Stock Exchange on June 28, 2002.

As of March 21, 2003, 40,009,034 shares of Common Stock were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Certain provisions of the registrant's definitive proxy statement to be filed
not later than April 30, 2003 pursuant to Regulation 14A are incorporated by
reference in Items 10 through 13 of Item III of this Annual Report on Form 10-K.

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CAUTIONARY NOTE ON FORWARD LOOKING INFORMATION

This Annual Report contains forward-looking statements relating to, among
other things, short- and long-term financial objectives, sales growth, cash flow
and cost improvement programs. These statements represent the intentions, plans,
expectations and beliefs of the Company, and are subject to risk, uncertainties
and other factors, many of which are outside the Company's control and could
cause actual results to differ materially from such forward-looking statements.
The uncertainties include assumptions as to market growth and consumer demand
(including the effect of political and economic events on consumer demand), raw
material and energy prices, the financial condition of major customers, and the
Company's determination and ability to exercise its option to acquire the
remaining 50% interest in Armkel LLC. With regard to the new product
introductions referred to in this report, there is particular uncertainty
relating to trade, competitive and consumer reactions. Other factors, which
could materially affect the results, include the outcome of contingencies,
including litigation, pending regulatory proceedings, environmental remediation
and the acquisition or divestiture of assets.

The Company undertakes no obligation to publicly update any
forward-looking statements, whether as a result of new information, future
events or otherwise. You are advised, however, to consult any further
disclosures we make on related subjects in our filings with the U.S. Securities
and Exchange Commission. This discussion is provided as permitted by the Private
Securities Litigation Reform Act of 1995.

TABLE OF CONTENTS

PART I

ITEM PAGE

1. Business -1-
2. Properties -12-
3. Legal Proceedings -13-
4. Submission of Matters to a Vote of Security Holders -13-

PART II

5. Market for the Registrant's Common Equity and Related Stockholder Matters -13-
6. Selected Financial Data -14-
7. Management's Discussion and Analysis of Financial Condition and Results of Operations -14-
7A. Quantitative and Qualitative Disclosures about Market Risk -14-
8. Financial Statements and Supplementary Data -14-
9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure -14-

PART III

10. Directors and Executive Officers of the Registrant -14-
11. Executive Compensation -14-
12. Security Ownership of Certain Beneficial Owners and Management and
Related Stockholder Matters -14-
13. Certain Relationships and Related Transactions -14-
14. Controls and Procedures -14-

PART IV

15. Exhibits, Financial Statement Schedules and Reports on Form 8-K -15-

PART I

ITEM 1. BUSINESS.

GENERAL; RECENT DEVELOPMENTS

The Company, founded in 1846, develops, manufactures and markets a broad
range of consumer and specialty products under its well-recognized ARM & HAMMER
brand name and other familiar brand names such as ARRID, BRILLO and XTRA. The
Company is the world's leading producer of sodium bicarbonate, popularly known
as baking soda. Baking soda is a versatile chemical which cleans, deodorizes,
leavens and buffers. The Company's Consumer Products include Deodorizing and
Household Cleaning Products, such as baking soda and cat litter; Laundry
Products, such as detergent and fabric softeners; and Personal Care Products,
such as antiperspirants and toothpaste. The Company's Specialty Products
include, in addition to sodium bicarbonate, sodium sesquicarbonate, ammonium
bicarbonate, and a rumen bypass fat product, which are used in a variety of
industrial, animal nutrition, and food products. In 2002, Consumer Products
represented approximately 83% and Specialty Products represented approximately
17% of the Company's sales. Approximately 92% of the Company's sales revenues
were derived from sales in the United States.

In January 2002, the Company acquired Biovance Technologies, Inc., a small
Oskaloosa, Iowa based producer of specialty animal feed ingredients which
complement the Company's existing range of animal nutrition products. The
purchase price paid in 2002 was approximately $7.8 million (exclusive of cash
acquired) and included the assumption of debt. An additional earn-out payment of
$3.4 million was paid in February 2003 based upon Biovance's 2002 operating
performance. A final earn-out payment (not to exceed $8.6 million) will be
required next year based upon Biovance's 2003 operating performance.

During 2002, the Company completed the integration of the XTRA and NICE'N
FLUFFY laundry brands that were obtained in the acquisition of USA Detergents,
Inc. in 2001. The integration began in the fourth quarter of 2000, prior to the
acquisition, with the consolidation of sales organizations, continued after the
acquisition through the integration of manufacturing and distribution and
concluded with the standardization of formulations and packaging in 2002.

Also during 2002, the Company continued the integration of the consumer
products business purchased in 2001 from Carter Wallace by the Company and
Armkel, LLC, a 50/50 joint venture with Kelso & Company. The integration began
in the fourth quarter of 2001 with the consolidation of sales organizations,
continued through the integration of manufacturing and distribution and was
materially completed with the shut down of the former Carter-Wallace facility in
Cranbury, New Jersey in the third quarter of 2002.

The Company financed the acquisition of USA Detergents, the acquisition of
the antiperspirant and pet care businesses from Carter-Wallace and its
investment in Armkel with a $510 million credit facility originally issued in
2001. In January 2003, the Company entered into a receivables purchase agreement
with PNC Bank in order to refinance $60 million of this credit facility. This
was done to reduce expenses associated with the credit facility and to lower the
Company's financing costs by accessing the commercial paper market. These
financing transactions are described in detail under the heading "Liquidity and
Capital Resources" in Exhibit 99.1 to this Annual Report on Form 10-K.

The Company maintains a web site at www.churchdwight.com and makes
available free of charge on this web site the Company's annual reports on Form
10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and amendments
to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the
Securities Exchange Act of 1934, as amended, as soon as reasonably practicable
after the Company electronically files these materials with, or furnishes it to,
the Securities and Exchange Commission. The information presented in the
Company's web site is not a part of this report.

FINANCIAL INFORMATION ABOUT SEGMENTS

The Company's business is organized into two segments, Consumer Products
and Specialty Products. Neither of these segments is seasonal. Information
concerning the net sales, operating income and identifiable assets of each of
the segments is set forth in Note 17 to the consolidated financial statements
included in Exhibit 99.1 to this Form 10-K which is incorporated herein by
reference. All sales percentages, presented in the following Consumer Products
and Specialty Products paragraphs, are exclusive of unconsolidated affiliates.

CONSUMER PRODUCTS

PRINCIPAL PRODUCTS

The Company's founders first marketed baking soda in 1846 for use in home
baking. Today, this product is known for a wide variety of uses in the home,
including as a refrigerator and freezer deodorizer, scratchless cleaner and
deodorizer for kitchen surfaces and cooking appliances, bath additive,
dentifrice, cat litter deodorizer, and swimming pool pH stabilizer. The Company
specializes in baking soda-based products, as well as other products which use
the same raw materials or technology or are sold in the same markets. The
following table sets forth the principal products of the Company's Consumer
Products division.

TYPE OF PRODUCT KEY BRAND NAMES

Deodorizing and Cleaning ARM & HAMMER Pure Baking Soda
ARM & HAMMER Fridge-n-Freezer

ARM & HAMMER Carpet & Room Deodorizer
ARM & HAMMER VACUUM-FREE Foam Carpet Deodorizer

ARM & HAMMER Cat Litter Deodorizer
ARM & HAMMER SUPER SCOOP Clumping Cat Litter
ARM & HAMMER SUPER CLAY Cat Litter
ARM & HAMMER CRYSTAL BLEND Cat Litter

LAMBERT KAY Pet Care Products

BRILLO Soap Pads
BRILLO SCRUB'N TOSS Disposable Cleaning Pads
SCRUB FREE Bathroom Cleaners
CLEAN SHOWER Daily Shower Cleaner
CAMEO Aluminum & Stainless Steel Cleaner
SNO BOL Toilet Bowl Cleaner
PARSONS' Ammonia

Laundry ARM & HAMMER FABRICARE Powder Laundry Detergent
ARM & HAMMER Liquid Laundry Detergent
XTRA Liquid Laundry Detergent
XTRA Powder Laundry Detergent
NICE'N FLUFFY Liquid Fabric Softener
ARM & HAMMER FRESH'N SOFT Fabric Softener Sheets
ARM & HAMMER FRESH'N SOFT Liquid Fabric Softener
DELICARE Fine Fabric Wash
ARM & HAMMER Super Washing Soda

Personal Care ARM & HAMMER DENTAL CARE Toothpaste, Gum and Powder
ARM & HAMMER PEROXICARE Toothpaste
ARM & HAMMER ADVANCE WHITE Toothpaste, Gum
ARM & HAMMER ADVANCE BREATH CARE
Toothpaste, Gum, Mouthwash, Breathmints
ARM & HAMMER COMPLETE CARE Toothpaste

ARM & HAMMER ULTRAMAX Deodorant & Antiperspirants
ARRID Antiperspirants
LADY'S CHOICE Antiperspirants

The following table sets forth the principal Consumer Products sold by
Armkel:

TYPE OF PRODUCT KEY BRAND NAME

Personal Care TROJAN Condoms
TROJAN Personal Lubricants
NATURALAMB Condoms
CLASS-ACT Condoms

NAIR Depilatories, lotions, creams and waxes
LINEANCE European Body Essentials, Depilatories Skin Care

FIRST RESPONSE Home Pregnancy and Ovulation Kits

PEARL DROPS Toothpolish and Toothpaste
RIGIDENT Denture Adhesive
CARTERS LITTLE PILLS, Laxative

Armkel is the Company's 50% owned joint venture with Kelso. The Company
exerts significant influence over Armkel through its membership on Armkel's
board and the Company's various agreements with Armkel, but does not control its
financial and operating decisions. As a result, Armkel's operations are not
consolidated on the Company's consolidated financial statements. This
arrangement is described more fully under the heading "Armkel" in the Liquidity
and Capital Resources section of the MD&A contained in Exhibit 99.1 to this
Annual Report on Form 10-K. Armkel has issued publicly traded debt and is
required to file reports with the Securities and Exchange Commission pursuant to
the Securities Exchange Act of 1934. However, those reports are not part of the
Company's Annual Report on this Form 10-K.

Deodorizing and Cleaning Products.

The Company has sold baking soda since 1846. The ARM & HAMMER trademark
was adopted in 1867. ARM & HAMMER Baking Soda remains the leading brand of
baking soda in terms of consumer recognition of the brand name and reputation
for quality and value.

The deodorizing properties of baking soda have led to the development of
several other household products. In 2002, Deodorizing and Cleaning Products
constituted approximately 30% of the Company's consumer sales and approximately
25% of the Company's total sales. The deodorizer products include ARM & HAMMER
Carpet & Room Deodorizer, ARM & HAMMER VACCUM-FREE Foam Carpet Deodorizer, ARM &
HAMMER Deodorizing Air Freshener and ARM & HAMMER Cat Litter Deodorizer. The
Carpet and Room Deodorizer products led the category for carpet deodorizers in
2002.

The Company markets a line of cat litter products such as ARM & HAMMER
SUPER SCOOP Clumping Cat Litter, which is the number two brand in the
fast-growing clumping segment of the cat litter market. All brand "rankings"
contained herein are based on IRI FDTKS, excluding Wal Mart, for the 52 weeks
ending December 22, 2002. A line extension of SUPER SCOOP is ARM & HAMMER
CRYSTAL BLEND, a premium-priced clumping cat litter which uses silica crystals,
baking soda and an anti-microbial ingredient to inhibit growth of bacterial
odors. The Company's pet care products also include LAMBERT KAY Pet Products and
ARM & HAMMER Super Clay cat litter. The Company intends to continue to innovate
and offer new products under the ARM & HAMMER brand in the household and pet
care categories. To this end, in 2003 the Company has launched ARM & HAMMER PET
FRESH Carpet & Room Deodorizer plus Pet Hair Release, a product that combines a
carpet deodorizer with a pet hair release agent that breaks the static charge
that holds hair to the carpet, thereby making vacuuming easier.

The Company also markets a variety of household cleaning products
including, BRILLO Soap Pads and other steel wool products, PARSONS Ammonia,
CAMEO Metal Polish, SNO BOL Cleaners and CLEAN SHOWER Daily Shower Cleaner and
SCRUB FREE Bathroom Cleaner. The Company intends to capitalize on the well
recognized

BRILLO name by extending its line of soap pads and expanding into new
categories. As a result, in 2003, the Company is launching BRILLO SCRUB'N TOSS
Disposable Cleaning Pads, a new, multi-use, disposable cleaning pad product.

Product introductions usually involve heavy marketing costs in the year of
launch, and the eventual success of the new product and line extensions
described in this Annual Report on Form 10-K will not be known for some time.

Laundry Products.

The Company's largest consumer business, measured by sales volume, is in
the laundry detergent market. In 2002, Laundry Products constituted
approximately 46% of the Company's consumer sales and approximately 38% of the
Company's total sales.

The Company markets its ARM & HAMMER Brand Laundry Detergents, in both
powder and liquid forms, as value products, priced at a discount from products
identified by the Company as market leaders. The Company markets its XTRA
laundry detergent in both powder and liquid at a slightly lower price than ARM &
HAMMER Brand Laundry Detergents. The marketing of distinct brands at several
price points is intended to increase market share. Although the powder laundry
detergent segment continued its long-term decline throughout 2002, the ARM &
HAMMER FABRICARE powder gained market share and maintained its position as the
leading powder detergent value brand.

The Company's Laundry Products include fabric softeners that prevent
static cling and soften and freshen clothes. In 2002, ARM & HAMMER FRESH 'N SOFT
Fabric Softener Sheets enjoyed an increase in dollar market share. In order to
build on this success, the Company has recently launched ARM & HAMMER FRESH 'N
SOFT Liquid Fabric Softener. The Company also offers another liquid fabric
softener, NICE'N FLUFFY, at a slightly lower price in an attempt to increase
market share by competing at several price points.

Personal Care Products.

The Company has entered the personal care and oral care businesses using
the unique strengths of its ARM & HAMMER trademark and baking soda technology.
These are highly innovative markets, characterized by a continuous flow of new
products and line extensions and intense competition, requiring heavy
advertising and promotion. In 2002, Personal Care Products (excluding Armkel)
constituted approximately 20% of the Company's consumer sales and approximately
17% of the Company's total sales.

Early in 2002, the Company accomplished a major objective by transferring
production of ARRID and LADY'S CHOICE deodorant antiperspirants from the former
Carter-Wallace plant at Cranbury, New Jersey, to the more efficient Company
plant at Lakewood, New Jersey. Early in 2003, the Company launched ARRID Total
Soft Solid antiperspirants targeted primarily to women, and broadened its ARM &
HAMMER ULTRAMAX antiperspirant line by adding a gel primarily targeted at men.

ARM & HAMMER Baking Soda, when used as a dentifrice, whitens and polishes
teeth, removes plaque and leaves the mouth feeling fresh and clean. These
properties have led to the development of a complete line of sodium
bicarbonate-based dentifrice products which are marketed and sold nationally
primarily under the ARM & HAMMER DENTAL CARE brand name. The Company also
markets ARM & HAMMER DENTAL CARE Gum, a baking soda based oral care product that
is available in four flavors.

In the toothpaste category, after two years of leading its category in
growth, driven by the success of ARM & HAMMER ADVANCE WHITE toothpaste, the
Company's share dropped in 2001 and again in 2002 mainly as a result of
competitive new products and aggressive spending by other manufacturers in the
category. To strengthen its toothpaste franchise, the Company introduced ARM &
HAMMER Complete Care, a product that cleans and whitens teeth and freshens
breath, the first ARM & HAMMER all-in-one toothpaste.

The Company's position in the Personal Care product line is bolstered by
Armkel's products. Armkel's domestic business primarily competes in three (3)
major product lines: reproductive health (TROJAN Condoms), skin care (NAIR
Depilatories/Waxes), and feminine health and hygiene (FIRST RESPONSE and ANSWER
Home Pregnancy /Ovulation Test Kits).

Condoms are recognized as highly reliable contraceptives as well as an
effective means of reducing the risk of sexually transmitted diseases (STDs).
The TROJAN condom brand has been in use for more than 80 years. In 2002, the
brand continued its share leadership in the United States behind the success of
such products as EXTENDED

PLEASURE and HER PLEASURE, the evolution of the TROJAN MAN advertising campaign,
and its on-going comprehensive educational programs.

The NAIR line of non-shaving hair removal products is the leading brand in
both dollar and unit sales in the United States, with several consecutive years
of double-digit sales growth behind innovative new products that address
consumer needs for quick, complete and longer-lasting hair removal. In 2003, new
waxes, depilatory creams and cloth strips will be launched to further strengthen
NAIR's leadership position.

Armkel recognizes the need to introduce new products to become a stronger
skin care company. In February 2003, it began shipping LINEANCE European Body
Essentials, a line of upscale hair removal and skin care treatments that offer
consumers the opportunity for a pampering spa experience in their own homes.

In 2002 Armkel's emerging feminine health and hygiene business was led by
FIRST RESPONSE, the number two brand in the Home Pregnancy Test Kit category.
Armkel also markets a second brand, ANSWER, which competes in the price-value
segment of the Home Pregnancy and Ovulation Test Kit market.

International

The Company markets and sells in Canada many of the same consumer products
that are sold in the United States through its wholly-owned Canadian subsidiary
Church & Dwight Ltd./Ltee.

Together with Armkel, the Company's international operations are also
focused on selected priority categories such as Oral Care, Depilatories,
Condoms, Home Pregnancy Test Kits and other regional niche products.

Armkel included continued strong growth for NAIR Waxes and Depilatories,
particularly in Canada and Mexico.

In oral care, Armkel's German distributor launched PERL WEISS Beauty
Pearls, a premium-priced cosmetic whitening toothpolish in a bottle. Armkel also
markets skin care products, including LINEANCE, the leading supermarket brand in
slimming body care in France.

In 2002, Armkel took over distribution of the ARM & HAMMER toothpaste
product line in the United Kingdom. The Company is looking for opportunities to
expand distribution of ARM & HAMMER products sold in several other countries.
Two such initiatives by the Company in 2002 were the introductions of ARM &
HAMMER toothpaste in Mexico, and ARM & HAMMER Baking Soda Shaker into Japan.

COMPETITION

For information regarding Competition, see pages 12 through 14 of Exhibit
99.1 hereto, incorporated herein by reference.

DISTRIBUTION

The Company's consumer products are primarily marketed throughout the
United States and Canada and sold through a broad distribution platform that
includes supermarkets, mass merchandisers, such as Wal-Mart, and drugstores. The
Company employs a sales force based regionally throughout the United States.
This sales force utilizes the services of independent food brokers in each
market. The Company's products are strategically located in Church & Dwight
plant and public warehouses and either picked up by customers or delivered by
independent trucking companies.

SPECIALTY PRODUCTS

PRINCIPAL PRODUCTS

As the world's leading supplier of sodium bicarbonate for both consumer
and industrial applications, the Company considers the Specialty Products
division its arm into the business-to-business arena. Currently, this division
participates in three product areas: Specialty Chemicals, Animal Nutrition and
Specialty Cleaners. The following table sets forth the principal products of the
Company's Specialty Products division.

TYPE OF PRODUCT KEY BRAND NAMES

Specialty Chemicals ARM & HAMMER Performance Grade Sodium
ARM & HAMMER TORTILLA BLEND Leavening Mix
ARMAND PRODUCTS Potassium Carbonate and Potassium Bicarbonate
ARMICARB 100 Fungicide
ARMAGRIP Anti-Slip Floor Treatment
SORB-N-C Pollution Control

Animal Nutrition ARM & HAMMER Feed Grade Sodium Bicarbonate
MEGALAC Rumen Bypass Fat
SQ-810 Natural Sodium Sesquicarbonate
DCAD Plus Feed Grade Potassium Carbonate
BIO-CHLOR and FERMENTEN Rumen Fermentation Enhancers

Specialty Cleaners ARMEX Blast Media
ARMAKLEEN Aqueous Cleaners
AQUAWORKS Aqueous Cleaners
Commercial & Professional Cleaners and Deodorizers

Specialty Chemicals.

The Company's specialty chemicals business primarily consists of the
manufacture, marketing and sale of sodium bicarbonate in a range of grades and
granulations for use in industrial and agricultural markets. In industrial
markets, sodium bicarbonate is used by other manufacturing companies as a
leavening agent for commercial baked goods, as an antacid in pharmaceuticals, as
a carbon dioxide release agent in fire extinguishers, as an alkaline agent in
swimming pool chemicals, and as a filtration agent in kidney dialysis.

The Company and Occidental Petroleum Corporation are equal partners in a
joint venture named Armand Products Company, which produces and markets
potassium carbonate and potassium bicarbonate. Potassium chemicals are sold to,
among others, the glass industry for use in TV and computer monitor screens.

The Company markets and sells ammonium bicarbonate and other specialty
chemicals to food and agricultural markets in Europe through its wholly-owned
British subsidiary Brotherton Specialty Products Ltd.

The Company's 99% owned Brazilian subsidiary, Quimica Geral do Nordeste,
is South America's leading provider of sodium bicarbonate.

Animal Nutrition Products.

A special grade of sodium bicarbonate, as well as sodium sesquicarbonate,
is sold to the animal feed market as a feed additive for use by dairymen as a
buffer, or antacid, for dairy cattle.

The Company markets and sells MEGALAC Rumen Bypass Fat, a nutritional
supplement made from natural oils, which allows cows to maintain energy levels
during the period of high-milk production, resulting in improved milk yields and
minimal weight loss. The product and the trademark MEGALAC are licensed under a
long-term license agreement from a British company, Volac Ltd.

Through its recently acquired Biovance subsidiary, the Company produces
BIO-CHLOR and FERMENTEN, a range of specialty feed ingredients for dairy cows,
which improve feed efficiency and help increase milk production.

Specialty Cleaners.

The Company formed a joint venture in 1999 with the Safety-Kleen
Corporation called the ArmaKleen Company. This joint venture distributes the
Company's proprietary product line of aqueous cleaners along with the Company's
Armex Blast Media line which is designed for the removal of a wide variety of
surface coatings.

During the year, the Company continued to pursue opportunities to build a
specialized industrial cleaning business using our aqueous-based technology. In
early 1999, the Company extended its alliance with Safety-Kleen Corp. to build a
specialty cleaning products business based on our technology and their sales and
distribution organization. The second year of this alliance was affected by
Safety-Kleen's financial difficulties which lead to their Chapter 11 filing and
implementation of a major reorganization during 2000. While the joint venture
has demonstrated more stability in 2002 and continues to hold great promise, the
outcome will not be known for some time.

COMPETITION

For information regarding Competition, see pages 13 and 14 of Exhibit
99.1 hereto; incorporated herein by reference.

DISTRIBUTION

The Company markets sodium bicarbonate and other chemicals to industrial
and agricultural customers throughout the United States and Canada. Distribution
is accomplished through regional sales offices and manufacturer's
representatives augmented by the sales personnel of independent distributors
throughout the country.

RAW MATERIALS AND SOURCES OF SUPPLY

The Company manufactures sodium bicarbonate for both of its consumer and
specialty products businesses at two of its plants located at Green River,
Wyoming and Old Fort, Ohio. The production of sodium bicarbonate requires two
basic raw materials, soda ash and carbon dioxide. The primary source of soda ash
used by the Company is the mineral, trona, which is found in abundance in
southwestern Wyoming, near the Company's Green River plant. The Company has
adequate trona reserves to support the requirements of the sodium bicarbonate
business and may acquire other leases in the future as the need arises.

The Company is party to a partnership agreement with General Chemical
Corporation, which mines and processes trona reserves in Wyoming. Through the
partnership and related supply and services agreements, the Company fulfills a
substantial amount of its soda ash requirements, enabling the Company to achieve
some of the economies of an integrated business capable of producing sodium
bicarbonate and related products from the basic raw material. The Company also
has an agreement for the supply of soda ash from another company. The
partnership agreement and other supply agreements between the Company and
General Chemical are terminable upon two years notice by either company. The
Company believes that alternative sources of supply are available.

The Company obtains its supply of the second basic raw material for the
production of sodium bicarbonate, carbon dioxide, under long-term supply
contracts. The Company believes that its sources of carbon dioxide are adequate.

The Company believes that ample sources of raw materials are available for
all of its other major products. Detergent chemicals are used in a variety of
the Company's products and are available from a number of sources. Bottles,
paper products and clay are available from multiple suppliers although the
Company chooses to source most of these materials from single sources under
long-term supply agreements in order to gain favorable pricing. Alternative
sources of supply are available in case of disruption or termination of the
agreements.

Increases in the prices of certain raw materials could materially impact
the Company's costs and financial results if the Company is unable to pass such
costs along in the form of price increases to its customers.

The main raw material used in the production of potassium carbonate is
liquid potassium hydroxide. Armand Products obtains its supply of liquid
potassium hydroxide under a long term supply arrangement.

PATENTS AND TRADEMARKS

The Company's trademarks (identified throughout this annual report in
capitalized letters), including ARM & HAMMER, are registered with the United
States Patent and Trademark Office and also with the trademark offices of many
foreign countries. The ARM & HAMMER trademark has been used by the Company since
the late 1800's, and is a valuable asset and important to the successful
operation of the Company's business. The Company's other valuable trademarks
include XTRA, BRILLO, ARRID, SNO BOL, PARSONS', SCRUB FREE and CLEAN SHOWER.

United States trademark registrations are for a term of 10 years,
renewable every 10 years so long as the trademarks are used in the regular
course of trade. The Company maintains a portfolio of trademarks representing
substantial goodwill in the businesses using the trademarks.

United States patents are currently granted for a term of 20 years from
the date the patent application is filed. The Company owns a number of patents
and believes that some of them may provide competitive advantages in the
marketplace for particular products.

CUSTOMERS AND ORDER BACKLOG

A group of three Consumer Products customers accounted for approximately
23% of consolidated net sales in 2002, including a single customer, Wal-Mart,
which accounted for approximately 16%. A group of three customers accounted for
approximately 23% of consolidated net sales in 2001 including a single customer,
Wal-Mart, which accounted for approximately 14%. This group accounted for 21% in
2000.

Although not included in the top three customers noted above, Kmart
Corporation historically has represented approximately 3% of our consolidated
net sales. Kmart's bankruptcy followed by its announcement to close an
additional 329 stores in the first half of 2003 could cause a reduction in sales
of approximately 15-20% to Kmart. It is not clear whether, and to what extent,
these lost sales may be made to other retailers.

The time between receipt of orders and shipment is generally short, and,
as a result, backlog is not significant.

RESEARCH & DEVELOPMENT

The Company conducts research and development primarily at its facility in
Princeton, New Jersey. The Company devotes significant resources and attention
to product development, process technology and basic research to develop
differentiated products with new and distinctive features, which provided
increased convenience and/or value to its customers. To increase its innovative
capabilities the Company engages outside contractors for general research and
development in activities beyond its core areas of expertise. During 2002,
$26,877,000 was spent on research activities as compared to $21,803,000 in 2001
and $19,363,000 in 2000.

GOVERNMENTAL REGULATION

Some of the Company's products are subject to regulation under the Food,
Drug and Cosmetic Act, which is administered by the Food and Drug
Administration, the Fair Packaging and Labeling Act and the Insecticide,
Fungicide and Rodenticide Act and the Toxic Substances Control Act, which are
administered by the Environmental Protection Agency. The Company is also subject
to regulation by the Federal Trade Commission in connection with the content of
its labeling, advertising, promotion, trade practices and other matters. The
Company's relationship with certain unionized employees may be overseen by the
National Labor Relations Board.

ENVIRONMENTAL MATTERS

The Company's operations are subject to federal, state and local
regulations governing air emissions, waste and steam discharges, and solid and
hazardous waste management activities. The Company endeavors to take actions
necessary to comply with such regulations. These steps include periodic
environmental audits of each Company facility. The audits, conducted by an
independent engineering concern with expertise in the area of environmental
compliance, include site visits at each location, as well as a review of
documentary information, to determine compliance with such federal, state and
local regulations. The Company believes that its compliance with existing
environmental regulations will not have any material adverse effect with regard
to the Company's capital expenditures, earnings or competitive position. No
material capital expenditures relating to environmental control or remediation
are presently anticipated.

GEOGRAPHIC AREAS

Approximately 92% of net sales of the Company in 2002, 90% in 2001 and 88%
in 2000 were to customers in the United States and approximately 95% of
long-lived assets of the Company in 2002, 92% in 2001 and 88% in 2000 were
located in the United States.

EMPLOYEES

At December 31, 2002, the Company had 2,256 employees. The Company is
party to a labor contract with the United Industrial Workers of North America at
its London, Ohio plant which contract continues until September 28, 2007. The
Company believes that its relations with both its union and non-union employees
are satisfactory.

CLASSES OF SIMILAR PRODUCTS

The Company's operations constitute two operating segments. The table set
forth below shows the percentage of the Company's net sales contributed by each
group of similar products marketed by the Company during the period from January
1, 2000 through December 31, 2002.

% of Net Sales

2002 2001 2000
---- ---- ----

Consumer Products
Deodorizing and Cleaning 25 25 30
Laundry 38 40 26
Personal Care 17 13 16
International 3 4 5

Specialty Products 17 18 23

The table above reflects consolidated net sales, exclusive of
unconsolidated entities. Segment information that includes unconsolidated
entities is contained in Note 17 of the Company's Consolidated Financial
Statement attached as Exhibit 99.1.

CERTAIN RISKS AND UNCERTAINTIES RELATED TO THE COMPANY'S BUSINESS

The Company's future results and financial condition are dependent upon
its ability to develop, manufacture and market consumer and specialty products
successfully. Inherent in this process are a number of factors that the Company
must successfully manage to achieve favorable future operating results and
financial condition. In addition to the other information contained in this
Annual Report on Form 10-K, the following risks and uncertainties could affect
the Company's future operating results and financial condition:

- - THE COMPANY HAS RECENTLY DEVELOPED AND COMMENCED SALES OF A NUMBER OF NEW
PRODUCTS WHICH, IF THEY DO NOT GAIN WIDESPREAD CUSTOMER ACCEPTANCE OR IF
THEY CANNIBALIZE SALES OF EXISTING PRODUCTS, COULD HARM THE COMPANY'S
EFFORTS TO IMPROVE ITS FINANCIAL PERFORMANCE.

The Company has introduced a number of new consumer products. The
development and introduction of new products involves substantial research,
development and marketing expenditures, which the Company may be unable to
recoup if the new products do not gain widespread market acceptance. In
addition, if the new products merely cannibalize sales of existing products, the
Company's financial performance could be harmed.

- - THE COMPANY MAY DISCONTINUE PRODUCTS OR PRODUCT LINES, WHICH COULD RESULT
IN RETURNS, ASSET WRITE-OFFS AND SHUT DOWN COSTS.

In the past, the Company has discontinued certain products and product
lines, which resulted in returns from customers, asset write-offs, and shut down
costs. The Company may suffer similar adverse consequences in the future to the
extent it discontinues products that do not meet expectations or no longer
satisfy consumer demand. Product returns, write-offs or shut down costs would
reduce cash flow and earnings. Product efficacy or safety concerns could result
in product recalls or declining sales which would reduce cash flow and earnings.

- - THE COMPANY FACES INTENSE COMPETITION IN A MATURE INDUSTRY THAT MAY
REQUIRE IT TO INCREASE EXPENDITURES AND ACCEPT LOWER PROFIT MARGINS TO
PRESERVE OR MAINTAIN ITS MARKET SHARE. UNLESS THE MARKETS IN WHICH THE
COMPANY COMPETES GROW SUBSTANTIALLY, A LOSS OF MARKET SHARE WILL RESULT IN
REDUCED SALES LEVELS AND DECLINING OPERATING RESULTS.

Currently, 92% of our sales are generated in U.S. markets. U.S. markets
for consumer products are mature and characterized by high household
penetration, particularly with respect to the Company's most significant product

categories, including laundry detergents and deodorizers and household cleaning
products. The Company's unit sales growth in domestic markets will depend on
increasing usage by consumers, product innovation and capturing market share
from competitors. The Company may not be able to succeed in implementing its
strategies to increase domestic revenues.

The consumer products industry, particularly the laundry detergent,
personal care and air deodorizer categories, is intensely competitive. To
protect the Company's existing market share or to capture increased market
share, the Company may need to increase expenditures for promotions and
advertising and introduce and establish new products. Increased expenditures may
not prove successful in maintaining or enhancing the Company's market share and
could result in lower sales and profits.

Many of the Company's competitors are substantially larger companies,
including The Procter & Gamble Company, Unilever, Inc., the Clorox Company,
Colgate-Palmolive Company, and S.C. Johnson & Son, Inc., which have greater
financial resources than the Company. They have the capacity to outspend the
Company in an attempt to take market share from the Company.

- - PROVIDING PRICE CONCESSIONS OR TRADE TERMS THAT ARE ACCEPTABLE TO THE
COMPANY'S TRADE CUSTOMERS, OR THE FAILURE TO DO SO, COULD ADVERSELY AFFECT
THE COMPANY'S SALES AND PROFITABILITY. IN ADDITION, REDUCTIONS IN
INVENTORY BY THE COMPANY'S TRADE CUSTOMERS, INCLUDING AS A RESULT OF
CONSOLIDATIONS IN THE RETAIL INDUSTRY, OR A SHIFT IN THE IMPORTANCE OF
CERTAIN CHANNELS OF TRADE COULD ADVERSELY AFFECT ITS SALES.

Consumer products, particularly those that are value-priced like many of
the Company's products, are subject to significant price competition and in
recent years have been characterized by price deflation. From time to time, the
Company may need to reduce the prices for some of its products to respond to
competitive and customer pressures and to maintain market share. Any reduction
in prices to respond to these pressures would harm profit margins. In addition,
if the Company's sales volumes fail to grow sufficiently to offset any reduction
in margins, its results of operations would suffer.

Because of the competitive environment facing retailers, many of the
Company's trade customers, particularly its high-volume retail store customers,
have increasingly sought to obtain pricing concessions or better trade terms.
These concessions or terms could reduce the Company's margins. Further, if the
Company is unable to maintain price or trade terms that are acceptable to its
trade customers, they could reduce product purchases from the Company and
increase product purchases from the Company's competitors, which would harm the
Company's sales and profitability. In addition, from time to time the Company's
retail customers have reduced inventory levels in managing their working capital
requirements. Any reduction in inventory levels by the Company's retail
customers would harm its operating results. In particular, continued
consolidation within the retail industry could potentially reduce inventory
levels maintained by the Company's retail customers, which could adversely
impact its results of operations. The Company's performance is also dependent
upon the general health of the economy and of the retail environment in
particular and could be significantly harmed by changes affecting retailing and
by the financial difficulties of retailers, including the ongoing bankruptcy
proceedings involving Kmart.

Industry wide, consumer products such as those marketed by the Company are
increasingly being sold in club stores and mass merchandisers, while sales of
consumer products by food and drug stores are comprising a smaller proportion of
the total volume of consumer products sold. Sales of the Company's products are
stronger in the food and drug channels of trade and not as strong with the club
stores and mass merchandisers. Although the Company has taken steps to improve
its representation in club stores and mass merchandisers, if the Company is not
successful in doing so, and the current trend continues, the financial condition
and operating results of the Company could suffer.

- - LOSS OF ANY OF THE COMPANY'S PRINCIPAL CUSTOMERS COULD SIGNIFICANTLY
DECREASE ITS SALES AND PROFITABILITY.

Wal-Mart, including its affiliate Sam's Club, was the Company's largest
customer, accounting for 16% of net sales in 2002, 14% of net sales in 2001, and
13% of net sales in 2000. The loss of or a substantial decrease in the volume of
purchases by Wal-Mart or any of the Company's other top customers would harm the
Company's sales and profitability.

- - THE COMPANY MAY MAKE ACQUISITIONS THAT, IF NOT PROPERLY INTEGRATED OR IF
OTHERWISE UNSUCCESSFUL, COULD STRAIN OR DIVERT ITS RESOURCES.

The Company has made several acquisitions in the past few years and may
make additional acquisitions or substantial investments in complementary
businesses or products in the future. Any future acquisitions or investments
would entail, various risks, including the difficulty of assimilating the
operations and personnel of the acquired businesses or products, the potential
disruption of the Company's ongoing business and, generally, the Company's
potential inability to obtain the desired financial and strategic benefits from
the acquisition or investment. These factors could harm the Company's financial
condition and operating results. Any future acquisitions or investments could
result in substantial cash expenditures, the issuance of new equity in the
Company and the incurrence of additional debt and contingent liabilities. In
addition, any potential acquisitions or investments, whether or not they are
ultimately completed, could divert the attention of management and other
resources from other issues that are more critical to the Company's operations.

- - THE CONDOM PRODUCT LINE OF THE COMPANY'S ARMKEL JOINT VENTURE COULD SUFFER
IF THE SPERMICIDE N-9 IS PROVED OR PERCEIVED TO BE HARMFUL.

Armkel's distribution of condoms under the TROJAN and other trademarks is
regulated by the U.S. Food and Drug Administration (FDA). Certain of Armkel's
condoms contain the spermicide nonoxynol-9 (N-9). The World Health Organization
and other interested groups have issued reports suggesting that N-9 should not
be used rectally or for multiple daily acts of vaginal intercourse, given the
ingredient's potential to cause irritation to human membranes. The Company
expects the FDA to issue non-binding draft guidance concerning the labeling of
condoms with N-9, although the timing of such draft guidance is uncertain. The
Company believes that condoms with N-9 provide an acceptable added means of
contraceptive protection and is cooperating with the FDA concerning the
appropriate labeling revisions, if any. However, the Company cannot predict the
outcome of the FDA review. If the FDA or state governments promulgate rules
which prohibit or restrict the use of N-9 in condoms (such as new labeling
requirements), Armkel could incur costs from obsolete products, packaging or raw
materials and sales of condoms could decline, which, in turn, could decrease the
value of the Company's interest in Armkel.

Related to this issue, on February 28, 2003 a purported class action suit,
Lissette Velez v. Church & Dwight Co., Inc., et al., was filed against the
Company and Armkel, and two other condom manufacturers, in the Superior Court of
New Jersey. The lawsuit alleges that condoms lubricated with N-9 are being
marketed in a misleading manner because the makers of such condoms claim they
aid in the prevention of sexually transmitted diseases whereas, according to the
plaintiffs, public health organizations have found that N-9 usage can under some
circumstances increase the risk of transmission of disease. Condoms with N-9
have been marketed for many years as a cleared medical device under applicable
FDA regulations, however, the Company cannot predict the outcome of this
litigation.

- - PRICE INCREASES IN CERTAIN RAW MATERIALS OR ENERGY COSTS COULD ERODE OUR
PROFIT MARGINS, WHICH COULD HARM OUR OPERATING RESULTS.

Increases in the prices of certain raw materials or increases in energy
costs could significantly impact our profit margins. If price increases were to
occur we may not be able to increase the prices of our products to offset these
increases. This could harm the Company's financial condition and operating
results.

ITEM 2. PROPERTIES.

The Company's executive offices and research and development facilities
are owned by the Company and are located on 22 acres of land in Princeton, New
Jersey, with approximately 127,000 square feet of office and laboratory space.
In addition, the Company leases space in two buildings adjacent to this
facility, pursuant to a multi-year lease, which contain approximately 90,000
square feet of office space. The Company also leases regional sales offices in
various locations throughout the United States.

The Company also owns or leases other facilities in the United States.
They are:

LOCATION PRODUCTS MANUFACTURED AREA (SQ. FEET)
- ---------------------------------------------------------------------------------------------------------------
OWNED:

Manufacturing facilities
Green River, Wyoming Sodium bicarbonate and various consumer products 273,000
Old Fort, Ohio Sodium bicarbonate and various consumer products 208,000
Lakewood, New Jersey Various consumer products 250,000
London, Ohio Soap pads and fabric softener sheets 114,000
Harrisonville, Missouri Liquid laundry detergent and fabric softener 360,000
Chicago, Illinois (1) Powder laundry detergent 105,000
Madera, California Rumen bypass fats and related products 50,000
Oskaloosa, Iowa Animal nutrition products 27,000

Warehouse
Green River, Wyoming 101,000
Harrisonville, Missouri 150,000

LEASED:

Manufacturing facility
North Brunswick, New Jersey (2) Liquid laundry detergent and other consumer products 360,000

Warehouse
North Brunswick, New Jersey (3) 525,000
North Brunswick, New Jersey (4) 156,000

1. The facility is situated on a three-acre land parcel whose lease
expires in 2080.
2. Expires in 2004, subject to two five-year extensions at the option
of the Company.
3. Expires in 2010.
4. Expires in 2011.

In Syracuse, New York the Company owns a 16 acre site which include a
group of connected buildings. This facility was closed in 2001 and is now leased
to a third party.

In 2002 the Company sold its facility in Winsted, Connecticut for
$1,250,000.

In Ontario, Canada, the Company owns a 36,000 square foot distribution
center which was used for the purpose of warehousing and distribution of
products sold into Canada. The facility was closed in 2002 and is currently for
sale.

Brotherton Specialty Products Ltd., a wholly-owned United Kingdom
subsidiary, owns and operates a 71,000 square foot manufacturing facility in
Wakefield, England on about 7 acres of land.

The Armand Products partnership, in which the Company has a 50% interest,
owns and operates a potassium carbonate manufacturing plant located in Muscle
Shoals, Alabama. This facility contains approximately 53,000 square feet of
space and has a capacity of 103,000 tons of potassium carbonate per year.

The Company's 99% owned subsidiary, QGN, has its administrative
headquarters in Rio de Janeiro, Brazil in leased office space expiring in 2005.
QGN owns and operates manufacturing facilities in Camaoari, Feira de Santana,
and Itapura in the state of Bahia and Diadema in the state of Sao Paulo.

The Company believes that its manufacturing, distribution and office
facilities are adequate for the conduct of its business at the present time.

ITEM 3. LEGAL PROCEEDINGS.

On January 17, 2002, a petition for appraisal, Cede & Co., Inc. and GAMCO
Investors, Inc. v. MedPointe Healthcare, Inc., Civil Action No. 19354, was filed
in the Court of Chancery of the State of Delaware demanding a determination of
the fair value of shares of MedPointe. The action was brought by purported
former shareholders of Carter-Wallace in connection with the merger on September
28, 2001 of MCC Acquisition Sub Corporation with and into Carter-Wallace. The
merged entity subsequently changed its name to MedPointe. The petitioners seek
an appraisal of the fair value of their shares in accordance with Section 262 of
the Delaware General Corporation Law. The matter was heard on March 10 and 11,
2003, at which time the petitioners purportedly held 2.3million shares of
MedPointe. No decision has yet been rendered by the court.

MedPointe and certain former Carter-Wallace shareholders are party to an
indemnification agreement pursuant to which such shareholders will be required
to indemnify MedPointe from a portion of the damages, if any, suffered by
MedPointe in relation to the exercise of appraisal rights by other former
Carter-Wallace shareholders in the merger. Pursuant to the agreement, the
shareholders have agreed to indemnify MedPointe for 40% of any Appraisal Damages
(defined as the recovery greater than the per share merger price times the
number of shares in the appraisal class) suffered by MedPointe in relation to
the merger; provided that if the total amount of Appraisal Damages exceeds
$33,333,333.33, then the indemnifying stockholders will indemnify MedPointe for
100% of any damages suffered in excess of that amount. Armkel, in turn, is party
to an agreement with MedPointe pursuant to which it has agreed to indemnify
MedPointe and certain related parties against 60% of any Appraisal Damages for
which MedPointe remains liable. The maximum liability to Armkel pursuant to the
indemnification agreements and prior to any indemnification from the Company, as
described in the following, is $12 million. The Company is party to an agreement
with Armkel pursuant to which it has agreed to indemnify Armkel for 17.38% of
any Appraisal Damages for which Armkel becomes liable, up to a maximum of $2.1
million.

The Company believes that the consideration offered in the merger was fair
to the former Carter-Wallace shareholders and have vigorously defended
petitioner's claim. However, the Company cannot predict with certainty the
outcome of the proceedings.

On August 26, 2002, Armkel filed suit against Pfizer in the District Court
of New Jersey to redress infringement of two (2) Armkel patents directed to
pregnancy diagnostic devices. The suit claims that Pfizer's "ept" product
infringes these patents. The Company is seeking a reasonable royalty and
associated damages as compensation for Pfizer's infringement. The Court has
ordered a Settlement Conference for April 11, 2003, and has set dates throughout
2003 for various stages of discovery.

The Company, in the ordinary course of its business, is the subject of, or
party to, various pending or threatened legal actions. The Company believes that
any ultimate liability arising from these actions will not have a material
adverse effect on its financial position or results of operation.

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

Not applicable.

PART II

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

This information appears under the heading "MD&A" on page 14 of Exhibit
99.1 hereto, incorporated by reference.

ITEM 6. SELECTED FINANCIAL DATA.

This information appears under the heading "Eleven Year Financial Summary"
on page 43 of Exhibit 99.1 hereto, incorporated herein by reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS ("MD&A").

This information appears under the heading "MD&A" on pages 1 through 14 of
Exhibit 99.1 hereto, incorporated herein by reference.

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

This information appears under the heading "Market Risk" in the
"Management's Discussion and Analysis" section on pages 7 and 8 of Exhibit 99.1
hereto, incorporated herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

The consolidated financial statements of the Company and its subsidiaries
and supplementary data required by this item appears on pages 15 through 42 of
Exhibit 99.1 hereto, incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

Not applicable.

PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

Information required by this item is incorporated by reference to the
Company's definitive proxy statement which will be filed pursuant to Regulation
14A with the Commission not later than 120 days after the close of the fiscal
year ended December 31, 2002.

ITEM 11. EXECUTIVE COMPENSATION.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

ITEM 14. CONTROLS AND PROCEDURES.

Within the ninety (90) days prior to the date of this report, the Company
carried out an evaluation, under the supervision and with the participation of
the Company's management, including the Company's Chief Executive Officer and
Chief Financial Officer, of the effectiveness of the design and operation of the
Company's disclosure controls and procedures pursuant to Exchange Act Rule
13a-14. Based upon that evaluation, we have concluded that

the Company's disclosure controls and procedures are effective in recording,
processing, summarizing and reporting within the time periods specified in the
SEC's rules and forms material information relating to the Company (including
its consolidated subsidiaries) required to be included in the Company's periodic
SEC filings.

Since the Chief Executive Officer's and Chief Financial Officer's most
recent review of the Company's internal controls systems, there have been no
significant changes in internal controls or in other factors that could
significantly affect these controls.

PART IV

ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K.

(a) 1. FINANCIAL STATEMENTS

The following Consolidated Financial Statements and Independent Auditors'
Report are attached hereto on Exhibit 99.1:

Independent Auditors' Report

Consolidated Statements of Income for each of the three years in the
period ended December 31, 2002

Consolidated Balance Sheets as of December 31, 2002 and 2001

Consolidated Statements of Cash Flow for each of the three years in
the period ended December 31, 2002

Consolidated Statements of Stockholders' Equity for each of the
three years in the period ended December 31, 2002

Notes to Financial Statements

(a) 2. FINANCIAL STATEMENT SCHEDULES

The following Financial Statement Schedules are attached hereto as Exhibit
99.2:

Independent Auditors' Report on Schedule

For each of the three years in the period ended December 31, 2002:

Schedule II - Valuation and Qualifying Accounts

Other schedules are omitted because of the absence of conditions under which
they are required or because the required information is given in the financial
statements or notes thereto.

(a) 3. EXHIBITS

(3) (a) Restated Certificate of Incorporation, dated October 22, 1992.

(b) By-Laws have previously been filed with the Securities and
Exchange Commission on the Company's Form 10-K for the year
ended December 31, 1985, (Commission file no. 1-10585) which
is incorporated herein by reference.

(4) (a) Credit Agreement, dated as of September 28, 2001, by and
between Church & Dwight Co., Inc., the several banks and other
financial institutions or entities from time to time parties
to the Agreement as Lenders, PNC Bank, National Association,
Fleet National Bank, The Bank of Nova Scotia, National City
Bank and The Chase Manhattan Bank, as administrative agent
previously filed with the Securities and Exchange Commission
on the Company's Form 10-K filed on March 18, 2002 (Commission
File No. 1-10585) and incorporated by reference.

(b) Credit Agreement, dated as of May 23, 2001, by and between
Church & Dwight Co., Inc., the several banks and other
financial institutions or entities from time to time parties
to the Agreement as Lenders, Fleet National Bank, National
City Bank, First Union National Bank, PNC Bank, and The Chase
Manhattan Bank, as administrative agent previously filed with
the Securities and Exchange Commission on the Company's Form
8-K filed on June 5, 2001 (Commission file no. 1-10585) and
incorporated by reference.

(c) The Company is party to a Loan Agreement dated May 31, 1991
with the New Jersey Economic Development Authority. The
principal amount of the loan thereunder is less than ten
percent of the Company's consolidated assets. The Company will
furnish a copy of said agreement to the Commission upon
request.

(d) Purchase and Sale Agreement dated January 16, 2003, by and
among Church & Dwight Co., Inc. and Harrison Street Funding
LLC previously filed with the Securities and Exchange
Commission on the Company's Form 8-K filed on January 30, 2003
(Commission File No. 1-10585) and incorporated by reference.

(e) Receivables Purchase Agreement, dated January 16, 2003, by and
among Harrison Street Funding, LLC, Church & Dwight Co., Inc.,
Market Street Funding Corporation and PNC Bank, previously
filed with the Securities and Exchange Commission on the
Company's Form 8-K filed on January 30, 2003 (Commission File
No. 1-10585) and incorporated by reference.

(10) (a) Amended and Restated Limited Liability Company Agreement
of Armkel LLC, dated as of August 27, 2001, by and between
Church & Dwight Co., Inc. and Kelso Protection Venture, LLC, a
Delaware limited liability company ("LLC Agreement") and
Amendment Number 1 to the LLC Agreement, dated as of September
24, 2001 previously filed with the Securities and Exchange
Commission on the Company's Form 8-K filed on October 12, 2001
(Commission file no. 1-10585) and are incorporated by
reference.

(b) Amendment Number 2 to the LLC Agreement, dated as of September
24, 2001 previously filed with the Securities and Exchange
Commission on the Company's Form 10-K filed on March 18, 2002
(Commission File No. 1-10585) and incorporated by reference.

(c) Amended and Restated Product Line Purchase Agreement, dated as
of July 30, 2001 and effective as of May 7, 2001 by and
between Church & Dwight Co., Inc. and Armkel LLC ("PLPA") and
Amendment Number 1 to the PLPA, dated as of September 28, 2001
previously filed with the Securities and Exchange Commission
on the Company's Form 8-K filed on October 12, 2001
(Commission file no. 1-10585) and are incorporated by
reference.

(d) Asset Purchase Agreement, dated May 7, 2001, by and between
Armkel LLC and Carter-Wallace, Inc. for the purchase of
certain consumer brands previously filed with the Securities
and Exchange Commission on the Company's Form 10-K filed on
March 18, 2002 (Commission File No. 1-10585) and incorporated
by reference.

(e) Supply Agreement between Church & Dwight Co., Inc. and ALCAD
Partnership for supply of soda ash. This document is not
attached hereto, but has been separately submitted to the
Securities and Exchange Commission and granted confidential
treatment pursuant to the Company's application under Exchange
Act Rule 24b-2.

(f) Limited Liability Company Operation Agreement of Armus, LLC,
dated as of June 14, 2000, between Church & Dwight Co., Inc.
and USA Detergents, Inc. This document has been previously
filed with the Securities and Exchange Commission on the
Company's Quarterly Report on Form 10-Q, filed on August 14,
2000. Portions of this document have been omitted pursuant to
the Company's confidential treatment request under Exchange
Act Rule 24b-2.

(g) Stock Purchase Agreement dated as of June 14, 2000, among USA
Detergents, Inc., Church & Dwight Co., Inc. and Frederick R.
Adler. This document has been previously filed with the
Securities and Exchange Commission on the Company's Quarterly
Report on Form 10-Q, filed on August 14, 2000.

(h) Employment Agreement, dated February 2, 2001, by and between
Church & Dwight Co., Inc. and Jon L. Finley for the position
of President and COO, previously filed with the Securities and
Exchange Commission on the Company's Form 10-K filed on March
18, 2002 (Commission File No. 1-10585) and incorporated by
reference.

*(i) Supplemental Employment Agreement, dated October 5, 2001, by
and between Church & Dwight Co., Inc. and Jon L. Finley,
previously filed with the Securities and Exchange Commission
on the Company's Form 10-K filed on March 18, 2002 (Commission
File No. 1-10585) and incorporated by reference.

*(j) Employment Agreement, dated January 3, 2002, by and between
Church & Dwight Co., Inc. and Joseph A. Sipia, Jr., previously
filed with the Securities and Exchange Commission on the
Company's Form 10-K filed on March 18, 2002 (Commission File
No. 1-10585) and incorporated by reference.

*(k) Employment Agreement, dated February 26, 2002, by and between
Church & Dwight Co., Inc. and Bradley A. Casper, previously
filed with the Securities and Exchange Commission on the
Company's Form 10-K filed on March 18, 2002 (Commission File
No. 1-10585) and incorporated by reference.

*(l) The Company's 1983 Stock Option Plan, which was approved by
stockholders at the Annual Meeting of Stockholders on May 5,
1983, and was included in the Company's definitive Proxy
Statement dated April 4, 1983, (Commission file no. 1-10585)
which is incorporated herein by reference.

*(m) Restricted Stock Plan for Directors which was approved by
stockholders at the Annual Meeting of Stockholders on May 7,
1987, and was included in the Company's definitive Proxy
Statement dated April 6, 1987, (Commission file no. 1-10585)
which is incorporated herein by reference.

*(n) Church & Dwight Co., Inc. Executive Deferred Compensation
Plan, effective as of June 1, 1997, (Commission file no.
1-10585) which is incorporated herein by reference.

*(o) Deferred Compensation Plan for Directors has previously been
filed with the Securities and Exchange Commission on the
Company's Form 10-K for the year ended December 31, 1987,
(Commission file no. 1-10585) which is incorporated herein by
reference.

*(p) Employment Service Agreement with Senior Management of Church
& Dwight Co., Inc. has previously been filed with the
Securities and Exchange Commission on the Company's Form 10-K
for the year ended December 31, 1990, (Commission file no.
1-10585) which is incorporated herein by reference.

*(q) The Stock Option Plan for Directors which was approved by
stockholders in May 1991, authorized the granting of options
to non-employee directors. The full text of the Church &
Dwight Co., Inc. Stock Option Plan for Directors was contained
in the definitive Proxy Statement filed with the Commission on
April 2, 1991, (Commission file no. 1-10585) which is
incorporated herein by reference.

*(r) A description of the Company's Incentive Compensation Plan has
previously been filed with the Securities and Exchange
Commission on the Company's Form 10-K for the year ended
December 31, 1992, (Commission file no. 1-10585) which is
incorporated herein by reference.

*(s) Church & Dwight Co., Inc. Executive Stock Purchase Plan has
previously been filed with the Securities and Exchange
Commission on the Company's Form 10-K for the year ended
December 31, 1993, (Commission file no. 1-10585) which is
incorporated herein by reference.

*(t) The 1994 Incentive Stock Option Plan has previously been filed
with the Securities and Exchange Commission on the Company's
Form 10-K for the year ended December 31, 1994, (Commission
file no. 1-10585) which is incorporated herein by reference.

*(u) The Compensation Plan for Directors, which was approved by
stockholders at the Annual Meeting of Stockholders on May 9,
1996, and was included in the Company's definitive Proxy
Statement filed with the Commission on April 1, 1996,
(Commission file no. 1-10585) which is incorporated herein
by reference.

*(v) The Church & Dwight Co., Inc. 1998 Stock Option Plan, which
was approved by stockholders at the Annual Meeting of
Stockholders on May 7, 1998, and was amended and restated as
of July 24, 2002.

- - *(w) Armkel, LLC Equity Appreciation Plan, effective
September 29, 2002.

- - *(x) Employment Agreement, dated July 24, 2002, by and between
Church & Dwight Co., Inc. and Andrew B. Steinberg for the
position of Vice President, General Counsel and Secretary.

- - (11) Computation of earnings per share.
- - (21) List of the Company's subsidiaries.
- - (23) Consent of Independent Auditor.
- - (99.1) Financial Statements.
- - (99.2) Financial Statement Schedules.
- - (99.3) Statement regarding the Certification of the CEO of Church &
Dwight Co., Inc. pursuant to 18 U.S.C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
- - (99.4) Statement regarding the Certification of the CFO of Church &
Dwight Co., Inc. pursuant to 18 U.S .C. Section 1350, as adopted
pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

* indicates a management contract or compensatory plan or arrangement
required to be filed as an exhibit to this Form.

- - indicates documents filed herewith.

(b) REPORTS ON FORM 8-K

The Company filed an 8-K on January 30, 2003 to announce that the Company
had entered into a receivable purchase agreement in order to refinance a
portion of its primary credit facility.

The Company filed an 8-K on February 10, 2003 to announce that the Company
had issued a press release relating to earnings for the quarter and year
ended December 31, 2002.

- --------------------------------------------------------------------------------

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, on March 27, 2003.

CHURCH & DWIGHT CO., INC.

By: /s/ Robert A. Davies, III
-------------------------------------
Robert A. Davies, III
Chairman and Chief Executive Officer

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 dates indicated.

/s/ Robert A. Davies, III Chairman and March 27, 2003
- ------------------------- Chief Executive Officer
Robert A. Davies, III

/s/ Zvi Eiref Vice President Finance and March 27, 2003
- -------------------------- Chief Financial Officer
Zvi Eiref (Principal Financial Officer)

/s/ Gary P. Halker Vice President Finance and March 27, 2003
- ------------------------- Treasurer
Gary P. Halker (Principal Accounting Officer)

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 dates indicated.

/s/ Robert H. Beeby Director March 27, 2003
- -------------------
Robert H. Beeby

/s/ Robert A. Davies, III Director March 27, 2003
- -------------------------
Robert A. Davies, III

/s/ Rosina B. Dixon, M.D. Director March 27, 2003
- -------------------------
Rosina B. Dixon, M.D.

/s/ J. Richard Leaman, Jr. Director March 27, 2003
- --------------------------
J. Richard Leaman, Jr.

/s/ Robert D. LeBlanc Director March 27, 2003
- ---------------------
Robert D. LeBlanc

/s/ John D. Leggett, III, Ph.D Director March 27, 2003
- ------------------------------
John D. Leggett, III, Ph.D.

/s/ John F. Maypole Director March 27, 2003
- -------------------
John F. Maypole

/s/ Robert A. McCabe Director March 27, 2003
- --------------------
Robert A. McCabe

/s/ Dwight C. Minton Director March 27, 2003
- --------------------
Dwight C. Minton

/s/ Burton B. Staniar Director March 27, 2003
- ---------------------
Burton B. Staniar

/s/ John O. Whitney Director March 27, 2003
- -------------------
John O. Whitney

CERTIFICATIONS

I, Robert A. Davies, III, certify that:

1. I have reviewed this annual report on Form 10-K of Church & Dwight Co.,
Inc.;

2. Based on my knowledge, this annual report does not contain any untrue
statement of a material fact or omit to state a material fact necessary to make
the statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this annual
report;

3. Based on my knowledge, the financial statements, and other financial
information included in this annual report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the period presented in this annual report;

4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-14 and 15d-14) for the registrant and have:

(a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its consolidated
subsidiaries, is made known to us by others within those entities, particularly
during the period in which this annual report is being prepared;

(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within ninety (90) days prior to the filing
date of this annual report (the "Evaluation Date); and

(c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date.

5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the audit
committee of registrant's board of directors (or persons performing the
equivalent functions):

(a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's ability to
record, process, summarize and report financial data and have identified for the
registrant's auditors any material weaknesses in internal controls; and

(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

6. The registrant's other certifying officers and I have indicated in this
annual report whether there were significant changes in internal controls or in
other factors that could significantly affect internal controls subsequent to
the date of our most recent evaluation, including any corrective actions with
regard to significant deficiencies and material weaknesses.

By: /s/ Robert A. Davies, III
----------------------------------------------
Name: Robert A. Davies, III
Title: Chairman and Chief Executive Officer

Dated: March 27, 2003

CERTIFICATIONS

I, Zvi Eiref, certify that:

1. I have reviewed this annual report on Form 10-K of Church & Dwight Co.
Inc.;

(b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within ninety (90) days prior to the filing
date of this annual report (the "Evaluation Date); and

(c) presented in this annual report our conclusions about the
effectiveness of the disclosure controls and procedures based on our evaluation
as of the Evaluation Date.

(b) any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's internal
controls; and

By: /s/ Zvi Eiref
-------------------------------------
Name: Zvi Eiref
Title: Vice President, Finance

Dated: March 27, 2003



                                                                   EXHIBIT 10.15


                                   ARMKEL, LLC

                            EQUITY APPRECIATION PLAN


                                   ARTICLE I

                                    PURPOSE

      The purpose of the Armkel, LLC Equity Appreciation Plan (the "Plan") is to
enhance the profitability and value of the Company for the benefit of its
members by enabling the Company to offer Equity Appreciation Awards to members
of its senior management in order to attract, retain and reward such individuals
and to strengthen the mutuality of interests between such individuals and the
Company's members.


                                   ARTICLE II

                                   DEFINITIONS

      For purposes of this Plan, the following terms shall have the following
meanings:

      2.1   "Appreciation" shall have the meaning given to such term in Section
6.1(a) hereof.

      2.2   "Affiliate" means each of the following: (i) any corporation, or any
trade or business (including, without limitation, a partnership or limited
liability company) which is directly or indirectly controlled 50% or more
(whether by ownership of stock, assets or an equivalent ownership interest or
voting interest) by the Company or one of its Affiliates; and (ii) any other
entity in which the Company or any of its Affiliates has a material equity
interest and which is designated as an "Affiliate" by the Committee.

      2.3   "Armkel, LLC Agreement" means the Amended and Restated Limited
Liability Agreement of Armkel, LLC dated as of August 27, 2001.

      2.4   "Award" or "Equity Appreciation Award" shall mean an award under
this Plan of an Equity Appreciation Right. All Awards shall be confirmed by, and
subject to the terms of, a written agreement executed by the Company and the
Participant.

      2.5   "Board" shall mean the Board of Directors of Armkel, LLC.

      2.6   "Cause" shall mean with respect to a Participant's termination of
Continuing Service, unless otherwise determined by the Committee at the time of
grant of an Award, or, if no rights of the Participant are reduced, as
determined at anytime thereafter: (i) in the case of where there is no
employment agreement or similar agreement (other than a change in control
agreement) in effect between the Company and the Participant at the time of the
grant of the Award (or where there is such an agreement but it does not define
"cause" (or words of similar import)), termination due to a Participant's
dishonesty, fraud, insubordination, willful misconduct, refusal to perform
services (for any reason other than illness or incapacity) or materially
unsatisfactory




performance of his or her duties for the Employer as determined by the Committee
in its sole discretion; or (ii) in the case where there is an employment
agreement or similar agreement (other than a change in control agreement) in
effect between the Company and the Participant at the time of the grant of the
Award that defines "cause" (or words of like import), "cause" as defined under
such agreement.

      2.7   "Church & Dwight" shall mean Church & Dwight Co., Inc.

      2.8   "Committee" shall mean the Committee appointed by the Board to
administer the Plan.

      2.9   "Company" shall mean Armkel, LLC, a Delaware corporation.

      2.10  "Continuing Service" shall mean continuous employment with the
Company or Church & Dwight, any of their respective Affiliates, or a
successor-in-interest to any of them from the Date of Grant of the applicable
Award.

      2.11  "Date of Grant" means the effective date of the grant of an Equity
Appreciation Award by the Committee under this Plan.

      2.12  "Disability" shall mean (i) in the case of where there is no
employment agreement or similar agreement (other than a change in control
agreement) in effect between the Company and the Participant at the time of the
grant of the Award (or where there is such an agreement but it does not define
"disability" (or words of like import) a physical or mental incapacity that
prevents a Participant from performing the individual's responsibilities and
duties with the Employer for 180 aggregate days (including weekends and
holidays) during any consecutive 12-month period; or (ii) in the case where
there is an employment agreement or similar agreement (other than a change in
control agreement) in effect between the Company and the Participant at the time
of the grant of the Award that defines "disability" (or words of like import),
"disability" as defined under such agreement.

      2.13  "Effective Date" shall mean September 29, 2001.

      2.14  "Eligible Employee" shall mean a senior management executive of the
Company who is eligible pursuant to Article V to be granted an Award under this
Plan. The names of the Eligible Employees who have been selected for
participation in the Plan are listed on Schedule I, attached hereto.

      2.15  "Employer" shall mean the Company, Church & Dwight, any of their
respective Affiliates or a successor-in-interest to any of them which then
employs the Participant.

      2.16  "Equity Appreciation Right" shall mean the right pursuant to an
Award granted under Article VI.

      2.17  "Initial Settlement Date" shall have the meaning given to such term
in Section 8.2(b)(i) hereof.


                                       2


      2.18  "Interest" shall mean an "Interest" of the Company as such term is
defined in Section 3.1 of the Armkel, LLC Agreement.

      2.19  "Liquidation Event" shall mean the occurrence of any of the
following events: (i) the sale, disposition or transfer (collectively, a "Sale")
of Interests, after which Kelso & Company no longer holds any Interests or (ii)
a Sale to an unaffiliated third party of all or substantially all of the
Company's assets.

      2.20  "Measurement Value" means, in respect of an Equity Appreciation
Award, the value of an Interest underlying an Award as determined by the
Committee, in good faith, in its discretion. The Initial Measurement Value of an
Interest covered by an Award will be $15.82 (or such higher amount as may be
determined by the Committee on the Date of Grant), subject to adjustment for
splits and similar events in accordance with Section 4.2 hereof. The Final
Measurement Value will be the value of an Interest underlying an Award as
determined by the Committee as of the date of the Liquidation Event; provided,
however, that in no event shall the Final Measurement Value of an Interest
exceed $26.31, subject to adjustment for splits and similar events in accordance
with Section 4.2 hereof.

      2.21  "Participant" shall mean an Eligible Employee of the Company to whom
an Award has been made and is outstanding under this Plan.

      2.22  "Retirement" shall mean a termination of Continuing Service (other
than a termination by the Employer for Cause) by a Participant who has both (i)
attained at least age sixty-five (65) and (ii) been credited with ten (10) or
more years of Continuing Service.

      2.23  "Settlement Date" shall have the meaning given to such term in
Section 8.2(b)(i) hereof.

      2.24  "Transfer" or "Transferred" shall mean anticipate, alienate, attach,
sell, assign, pledge, encumber, charge or otherwise transfer.


                                  ARTICLE III

                                 ADMINISTRATION

      3.1   Plan Administration. The Plan shall be administered and interpreted
by the Committee.

      3.2   Awards. The Committee shall have full authority to grant, pursuant
to the terms of this Plan, Equity Appreciation Awards to Eligible Employees. In
particular, the Committee shall have the authority:

            (a)   to select the Eligible Employees to whom Awards may from time
      to time be granted hereunder;


                                       3


            (b)   to determine whether and to what extent Awards are to be
      granted hereunder to one or more Eligible Employees;

            (c)   to determine the number of Interests underlying individual
      Awards granted under the Plan;

            (d)   to determine, subject to the terms of the Plan, the Initial
      Measurement Value and the Final Measurement Value of all Awards granted
      under the Plan;

            (e)   to determine all other terms and conditions, not inconsistent
      with the terms of this Plan, of any Award granted hereunder to an Eligible
      Employee (including, but not limited to, any restriction or limitation,
      any vesting schedule or acceleration thereof or any forfeiture
      restrictions or waiver thereof, regarding any Award based on such factors,
      if any, as the Committee shall determine, in its sole discretion);

            (f)   to modify, extend or renew an Award, subject to Article IX
      herein;

            (g)   to determine the medium in which Awards shall be settled
      following the Liquidation Event pursuant to Section 8.2 hereof; provided
      that if the Committee determines that the Awards shall be settled by
      issuance of (i) discounted stock options or restricted stock awards with
      respect to shares of Church & Dwight common stock or (ii) any other form
      of Church & Dwight equity or debt, ("C&D Settlement Medium") then such
      determination shall be subject to the approval of Church & Dwight; and

            (h)   to settle all Awards in the event of the termination of the
      Plan pursuant to Section 9.1 hereof.

      3.3   Guidelines. Subject to Article IX hereof, the Committee shall have
the authority to adopt, alter and repeal such administrative rules, guidelines
and practices governing this Plan and perform all acts, including the delegation
of its administrative responsibilities, as it shall, from time to time, deem
advisable; to construe and interpret the terms and provisions of this Plan and
any Award issued under this Plan (and any agreements relating thereto); and to
otherwise supervise the administratiocn of this Plan. The Committee may correct
any defect, supply any omission or reoncile any inconsistency in this Plan or in
any agreement relating thereto in the manner and to the extent it shall deem
necessary to effectuate this Plan.

      3.4   Decisions Final. Any decision, interpretation or other action made
or taken in good faith by or at the direction of the Committee (or any of its
members) arising out of or in connection with this Plan shall be within the
absolute discretion of the Committee, as the case may be, and shall be final,
binding and conclusive on the Company and all employees and Participants and
their respective heirs, executors, administrators, successors and assigns.


                                       4


      3.5   Reliance on Counsel. The Committee may consult with legal counsel,
who may be counsel for the Company or other counsel, with respect to its
obligations or duties hereunder, or with respect to any action or proceeding or
any question of law, and the Committee shall not be liable with respect to any
action taken or omitted by it in good faith pursuant to the advice of such
counsel.


      3.6   Designation of Consultant; Liability.

            (a)   Delegations. The Committee may designate employees of the
      Company and professional advisors to assist it in the administration of
      this Plan and may grant authority to employees to execute agreements or
      other documents on its behalf.

            (b)   Consultants; Liability. The Committee may employ such legal
      counsel, consultants and agents as it may deem desirable for the
      administration of this Plan and may rely upon any opinion received from
      any such counsel or consultant and any computation received from any such
      consultant or agent. Expenses incurred by the Committee in the engagement
      of any such counsel, consultant or agent shall be paid by the Company.
      Neither the Committee, nor any person designated pursuant to Section
      3.6(a) shall be liable for any action or determination made in good faith
      with respect to this Plan. To the maximum extent permitted by applicable
      law, no officer of the Company or member or former member of the Committee
      or of the Board shall be liable for any action or determination made in
      good faith with respect to this Plan or any Award granted under it. To the
      maximum extent permitted by applicable law and the Armkel, LLC Agreement
      and to the extent not covered by insurance, each officer (including,
      without limitation, the Chairman) and member or former member of the
      Committee or of the Board shall be indemnified and held harmless by the
      Company against any cost or expense (including reasonable fees of counsel
      reasonably acceptable to the Company) or liability (including any sum paid
      in settlement of a claim with the approval of the Company), and advanced
      amounts necessary to pay the foregoing at the earliest time and to the
      fullest extent permitted, arising out of any act or omission to act in
      connection with this Plan, except to the extent arising out of such
      officer's, member's or former member's own fraud or bad faith. Such
      indemnification shall be in addition to any rights of indemnification the
      officers, directors or members or former officers, directors or members
      may have under applicable law or under the Armkel, LLC Agreement.
      Notwithstanding anything else herein, this indemnification shall not apply
      to the actions or determinations made by an individual with regard to
      Awards granted to him under this Plan.


                                   ARTICLE IV

                          CHANGES IN CAPITAL STRUCTURE

      4.1   No Restriction on Organizational Changes. The existence of this Plan
and the Awards granted hereunder shall not affect in any way the right or power
of the Board


                                       5


or the members of the Company to make or authorize any adjustment,
recapitalization, reorganization or other change in the Company's capital
structure or its business, any merger or consolidation of the Company, any issue
of bonds, debentures, preferred or prior preference interests ahead of or
affecting Interests, the authorization or issuance of additional Interests, the
dissolution or liquidation of the Company, any sale or transfer of all or part
of its assets or business or any other organizational act or proceeding.

      4.2   Adjustment to Awards. In the event of any change in the capital
structure or business of the Company or by reason of any split or reverse split,
recapitalization, reorganization, merger, consolidation, or exchange of
Interests, distribution with respect to outstanding Interests or interests other
than Interests, reclassification of Interests, any sale or transfer of all or
part of the Company's assets or business, or any similar change affecting the
Company's capital structure or business and the Committee determines an
adjustment is appropriate under this Plan, the Committee shall make such
adjustments to the terms of all then outstanding Awards including, but not
limited to, making an adjustment to the number of Interests subject to each then
outstanding Award and/or to the dollar amount of the Initial Measurement Value
of each such Awards, consistent with such change in such manner as the Committee
may deem equitable to prevent substantial dilution or enlargement of the rights
granted to, or available for, Participants under this Plan or as otherwise
necessary to reflect the change, and any such adjustment determined by the
Committee, in good faith, shall be binding and conclusive on the Company and all
Participants and employees and their respective heirs, executors,
administrators, successors and assigns.


                                   ARTICLE V

                                  ELIGIBILITY

         All senior management executives of the Company are eligible to be
granted Awards under this Plan. Eligibility under this Plan shall be determined
by the Committee in its sole and absolute discretion.


                                   ARTICLE VI

                           EQUITY APPRECIATION AWARDS

      6.1   Terms and Conditions of Equity Appreciation Awards. Each Equity
Appreciation Award shall be referenced at the time of grant to one or more
Interests. Equity Appreciation Awards shall be subject to such other terms and
conditions as shall be determined from time to time by the Committee, not
inconsistent with the provisions of this Plan, including the following:

            (a)   Basic Grant. Each Equity Appreciation Award granted under the
      Plan shall constitute a right to receive in cash (or in such other
      settlement medium chosen by the Committee, subject in case of C&D
      Settlement Medium to the approval of Church & Dwight, in accordance with
      Section 8.2 hereof) the appreciation in the Measurement Value of an
      Interest, as determined on the date


                                       6


      of the Liquidation Event, which appreciation will be equal to the
      difference between the Initial Measurement Value of the Equity
      Appreciation Award and the Final Measurement Value of the Award,
      multiplied by the number of Interests subject to the Award to the extent
      then vested (the "Appreciation"). The Initial Measurement Value shall be
      stated in the individual Award agreement described in Section 6.1(c) below
      and shall be subject to adjustment as provided in Section 4.2 hereof.

            (b)   Number of Interests Subject to Award. The total number of
      Interests that may be subject to Awards under the Plan shall be 800,000.
      Interests that are forfeited or otherwise expire shall not again be
      available for grant pursuant to Awards under the Plan.

            (c)   Equity Appreciation Award Agreement. As promptly as
      practicable after an Eligible Employee is granted an Award, the Company
      and the Participant shall enter into a written agreement setting forth all
      terms and conditions of the Award. The Committee shall also establish or
      cause to be established a bookkeeping account for each Participant and
      shall record or cause to be recorded the number of Interests subject to
      the Equity Appreciation Award granted to such Participant, the Initial
      Measurement Value of the underlying Interests and the Date of Grant.

            (d)   Vesting. Unless the Committee determines otherwise on the Date
      of Grant with respect to an Award, each Equity Appreciation Award shall
      vest on the last day of each calendar month during the thirty-six (36)
      consecutive calendar month period beginning on the Date of Grant, provided
      that such Participant is actively employed by the Company on each such
      monthly vesting date.

            (e)   Settlement of Awards. Awards granted under this Plan shall
      only be eligible for settlement pursuant to Article VIII hereof, to the
      extent each such Award has vested under Section 6.1(d) hereof and the
      Liquidation Event occurs prior to the seventh anniversary of the Plan's
      Effective Date. If the Liquidation Event fails to occur by the seventh
      anniversary of the Plan's Effective Date, the Plan and all then
      outstanding Awards shall automatically terminate and become null and void
      regardless of whether any such Awards have vested in whole or in part.


                                   ARTICLE VII

          NON-TRANSFERABILITY AND TERMINATION OF EMPLOYMENT PROVISIONS

      7.1   Non-transferability. Unless the Committee determines otherwise or
except as otherwise specifically provided by law or herein, no Award may be
Transferred in any manner, and any attempt to Transfer any Award shall be void,
and no such Award shall in any manner be used for the payment of, subject to, or
otherwise encumbered by or hypothecated for the debts, contracts, liabilities,
engagements or torts of any person


                                       7


who shall be entitled to such Award, nor shall it be subject to attachment or
legal process for or against such person.

      7.2   Termination of Employment.

            (a) Unless the Committee determines otherwise on the Date of Grant
      with respect to an Award or as provided for in Section 7.2(c) below, an
      Equity Appreciation Award granted to a Participant under this Plan shall
      automatically terminate and become null and void upon a Participant's
      termination of Continuing Service if such termination occurs prior to the
      Liquidation Event, regardless of whether such Award has vested in whole or
      in part.

            (b) Any part of an Award which is not vested as of the date of the
      Participant's termination of active employment with the Company shall
      automatically terminate upon such termination of active employment
      (whether or not such Participant remains in Continuing Service).

            (c) The Committee shall have the discretion and authority to provide
      special rules that may be applicable to an Award granted under this Plan
      in order to prevent the otherwise automatic forfeiture of such Award
      pursuant to Section 7.2(a) if such Participant terminates Continuing
      Service prior to the Liquidation Event due to death, Retirement or
      Disability.


                                  ARTICLE VIII

                              SETTLEMENT OF AWARDS

      8.1   Effect of Liquidation Event. Upon the occurrence of the Liquidation
Event, all then outstanding Awards shall become immediately eligible for
settlement pursuant to Section 8.2 below to the extent that each such Award has
vested pursuant to Section 6.1(d) hereof.

      8.2   Settlement.

            (a)   General. Following the occurrence of the Liquidation Event,
      each Participant shall be entitled to receive the Appreciation
      attributable to the vested portion of his Award in accordance with this
      Section 8.2 and the un-vested portion of such Awards shall automatically
      terminate and become null and void.

            (b)   Method of Settlement. Upon the date of the Liquidation Event,
      the Committee (subject, in case of C&D Settlement Medium to the approval
      of Church & Dwight) shall determine, in its sole discretion, the method in
      which to settle all of the then outstanding Equity Appreciation Awards, to
      the extent then vested. Subject to Section 8.2(e), the Committee may elect
      to settle each such then outstanding Award pursuant to any of the
      following methods:

           (i)    Settlement in Cash. The Committee may elect to settle each
                      Award in cash, in which case each Participant holding an
                      Award eligible for


                                       8


                      settlement hereunder shall be entitled to receive the
                      dollar value of the Appreciation, paid in three (3) equal
                      annual installment payments, less applicable tax
                      withholding, with the first installment to be paid within
                      ten (10) business days after the Liquidation Event
                      ("Initial Settlement Date") and the second and third
                      installments to be paid on the first and second
                      anniversaries of the Liquidation Event (each, a
                      "Settlement Date") provided the Participant remains in
                      Continuing Service on each Settlement Date. The second and
                      third installment payments shall be adjusted by the
                      Committee to reflect interest earned thereon from the
                      Initial Settlement Date through the Settlement Date on
                      which the installment is paid. The interest shall be
                      calculated at the applicable federal rate in effect on the
                      Initial Settlement Date for short-term loans, compounded
                      semi-annually.

            (ii)  Settlement Through Grant of Discounted Stock Options. For
                      Participants who become employees of Church & Dwight
                      following the Liquidation Event, the Committee may elect
                      to settle each Award through C&D Settlement Medium through
                      grant to each eligible Participant of a discounted
                      non-qualified stock option to purchase shares of Church &
                      Dwight common stock under the Church & Dwight employee
                      stock option plan to purchase the number of shares of
                      Church & Dwight common stock determined, pursuant to the
                      formula set forth below at an exercise price per share
                      which shall be equal to twenty-five percent (25%) of the
                      "fair market value" (as determined below) of an underlying
                      share of Church & Dwight common stock determined as of the
                      date of the grant. Each such option shall be granted to
                      purchase the number of shares of Church & Dwight common
                      stock equal to (x) the dollar amount of the Appreciation
                      subject to settlement divided by (y) seventy-five percent
                      (75%) of the "fair market value" of a share of the
                      underlying stock on the date of grant. For purposes of the
                      foregoing formula, the "fair market value" of a share of
                      Church & Dwight common stock shall be determined in
                      accordance with the Church & Dwight employee stock option
                      plan as of the date the option is granted. Each such
                      option shall be granted on the Initial Settlement Date, as
                      defined above, and shall vest and become exercisable on a
                      cumulative basis, as follows: one-third shall vest and
                      become fully exercisable on the Initial Settlement Date
                      and an additional one-third shall vest and become
                      exercisable on each succeeding Settlement Date provided
                      the Participant is employed by Church & Dwight on each
                      Settlement Date. Each option shall have a ten-year term
                      and shall otherwise be subject to the terms of the Church
                      & Dwight employee stock option plan. Each option shall be
                      memorialized in a written stock option agreement between
                      Church & Dwight and the Participant which shall contain
                      all other


                                       9


                      terms and conditions of the option consistent with the
                      option plan and as determined by the Committee.

            (iii) Settlement Through Grant of Restricted Stock Awards. For
                      Participants who become employees of Church & Dwight
                      following the Liquidation Event, the Committee may elect
                      to settle each Award through the grant to each eligible
                      Participant shares of restricted common stock of Church &
                      Dwight under the Church & Dwight restricted stock plan
                      having an aggregate "fair market value," as determined
                      below, as of the date of grant, equal to the Appreciation
                      of the Award subject to settlement. For purposes of the
                      foregoing formula, the "fair market value" of shares of
                      Church & Dwight common stock shall be determined in
                      accordance with the Church & Dwight restricted stock plan
                      as of the date the restricted stock award is granted. Each
                      such restricted stock award shall be granted on the
                      Initial Settlement Date, as defined above, and shall vest
                      on a cumulative basis, as follows: one-third shall vest on
                      the date of grant, and an additional one-third shall vest
                      on each succeeding Settlement Date provided the
                      Participant is employed by Church & Dwight on each
                      Settlement Date. Each restricted stock award will be
                      memorialized in a written agreement between Church &
                      Dwight and the Participant which shall contain all other
                      terms and conditions of the award consistent with this
                      Plan and as determined by the Committee.

            (iv)  Settlement in any Other Manner. The Committee may elect to
                      settle an Award in a manner other than the settlement
                      options described in clauses (i) - (iii) of this Section
                      8.2(b) so long as the dollar value of the Award is
                      preserved.

            (c)   Requirement of Continuing Service. Unless the Committee
      determines otherwise with respect to a Participant, in order to be
      eligible for full settlement of an Equity Appreciation Award following the
      Liquidation Event, the Participant must be in Continuing Service on each
      Settlement Date. The Committee shall, however, have the discretion and
      authority to provide special settlement rules to be applicable to
      Participants who terminate Continuing Service following the Liquidation
      Event but prior to the Settlement Date or Dates due to death, Retirement,
      Disability or termination by the Employer without Cause.

            (d)   Committee Discretion With Respect to Award Settlement.
      Notwithstanding any contrary provision contained herein, the Committee may
      elect to settle all then outstanding Awards, to the extent vested, as soon
      as practicable following the Liquidation Event.

            (e)   Notwithstanding anything contrary herein and provided there
      has occurred the Liquidation Event prior to the seventh anniversary date
      of this Plan, all settlement of Awards, to the extent not previously
      settled on the Settlement


                                       10


      Date, shall be settled no later than the seventh anniversary of the
      Effective Date. If the Liquidation Event occurs after the fourth
      anniversary of the Effective Date, the Committee shall determine the
      applicable shorter payment or vesting schedule.


                                   ARTICLE IX

                      TERMINATION OR AMENDMENT OF THE PLAN

     9.1    Amendment of Plan. Notwithstanding any other provision of this Plan,
the Board or the Committee may at any time, and from time to time, amend, in
whole or in part, any or all of the provisions of this Plan, or suspend or
terminate it entirely, retroactively or otherwise and settle all then
outstanding vested Awards; provided, however, that, unless otherwise required by
law or specifically provided herein, the rights of a Participant with respect to
Awards granted prior to such amendment, suspension or termination, may not be
adversely effected without the consent of such Participant.

     9.2    Amendment of Award. The Committee may amend the terms of any Award
theretofore granted, prospectively or retroactively, but, subject to Article IV
or as otherwise specifically provided herein, no such amendment or other action
by the Committee shall adversely effect the rights of any Participant without
the Participant's consent.


                                   ARTICLE X

                                 UNFUNDED PLAN

      This Plan is intended to constitute an "unfunded" plan for incentive and
deferred compensation. With respect to any payments as to which a Participant
has a fixed and vested interest but which are not yet made to a Participant by
the Company, nothing contained herein shall give any such Participant any rights
that are greater than those of a general creditor of the Company.


                                   ARTICLE XI

                               GENERAL PROVISIONS

     11.1   Other Plans. Nothing contained in this Plan shall prevent the Board
from adopting other or additional compensation arrangements, subject to
shareholder approval if such approval is required; and such arrangements may be
either generally applicable or applicable only in specific cases.

     11.2   No Right to Employment. Neither this Plan nor the grant of any Award
hereunder shall give any Participant or other employee any right with respect to
continuance of employment by the Company or any Affiliate, nor shall they be a
limitation in any way on the right of the Company or any Affiliate by which an
employee is employed to terminate his employment or Affiliate, as applicable, at
any time.


                                       11


     11.3   Withholding of Taxes. The Company shall have the right to deduct
from any payment to be made to a Participant, payment by the Participant of, any
Federal, state or local taxes required by law to be withheld.

     11.4   Governing Law. This Plan shall be governed and construed in
accordance with the laws of the State of Delaware (regardless of the law that
might otherwise govern under applicable Delaware principles of conflicts of
laws).

     11.5   Construction. Wherever any words are used in this Plan in the
masculine gender they shall be construed as though they were also used in the
feminine gender in all cases where they would so apply, and wherever any words
are used herein in the singular form they shall be construed as though they were
also used in the plural form in all cases where they would so apply.

     11.6   Other Benefits. No Award payment under this Plan shall be deemed
compensation for purposes of computing benefits under any retirement plan of the
Company or its Affiliates nor affect any benefits under any other benefit plan
now or subsequently in effect under which the availability or amount of benefits
is related to the level of compensation.

     11.7   Costs. The Company shall bear all expenses of administering this
Plan.

     11.8   No Right to Same Benefits. The provisions of Awards need not be the
same with respect to each Participant, and such Awards to individual
Participants need not be the same in subsequent years.

     11.9   Death/Disability. The Committee may in its discretion require the
transferee of a Participant's Award to supply the Company with written notice of
the Participant's death or Disability and to supply the Company with a copy of
the will (in the case of the Participant's death) or such other evidence as the
Committee deems necessary to establish the validity of the Transfer of an Award.
The Committee may also require that the transferee agree in writing to be bound
by all of the terms and conditions of this Plan.

     11.10  Severability of Provisions. If any provision of this Plan shall be
held invalid or unenforceable, such invalidity or unenforceability shall not
affect any other provisions hereof, and this Plan shall be construed and
enforced as if such provisions had not been included.

     11.11  Headings and Captions. The headings and captions herein are provided
for reference and convenience only, shall not be considered part of this Plan,
and shall not be employed in the construction of this Plan.


                                  ARTICLE XII

                             EFFECTIVE DATE OF PLAN

      This Plan shall be effective on September 29, 2001.


                                       12



                                  ARTICLE XIII

                                  TERM OF PLAN

      In the event the Liquidation Event has not occurred prior to the seventh
anniversary of the Plan's Effective Date, the Plan and all then outstanding
Awards shall automatically terminate and become null and void regardless of
whether any such Awards have vested in whole or in part.

      In the event the Liquidation Event occurs prior to the seventh anniversary
of the Plan's Effective Date, all then outstanding Awards shall be settled in
accordance with the terms and provisions of the Plan and following settlement of
all such Awards, the Plan shall terminate.


                                  ARTICLE XIV

                                  NAME OF PLAN

      This Plan shall be known as the Armkel, LLC Equity Appreciation Plan.


                            CHURCH & DWIGHT CO., INC.

- --------------------------------------------------------------------------------

                       EMPLOYMENT TERMS FOR ANDY STEINBERG

                                    AGREEMENT
- --------------------------------------------------------------------------------



                     
POSITION                -     Vice President, Corporate Secretary and General Counsel

SALARY                  -     At commencement of employment, base salary of $260,000 per annum
                        -     Sign-on bonus of $15,000 to be paid within the first 30 days of employment

ANNUAL INCENTIVE        -     Minimum: 0% of salary
                        -     Target: 45% of salary
                        -     Maximum: 90% of salary

                        -     For 2002, the annual incentive payable to Executive will be no less than
                              45% of base salary earned in 2002.

LONG-TERM INCENTIVES    -     An initial grant of 15,000 Church & Dwight Co., Inc. ("C&D") stock options
                              at fair market value on the grant date, vesting in their entirety upon
                              conclusion of three years, and exercisable over a ten-year term
                        -     Ongoing option grant amounts will be determined based on CHD's existing
                              Long-term Incentive Plan. Eligible to participate in CHD option grant. It
                              is estimated that you will receive approximately 11,000 options at the
                              then fair market value on the grant date (e.g.$260,000*1.4/$33 = 11,030).

BENEFITS, ETC.          -     Participation in all Company plans and programs (see plan
                              documents-attached) on similar terms and conditions as the Company's o
                              senior executives

TERMINATION             -     Employment is at will
WITHOUT "CAUSE"         -     Base salary to date of termination
BY C&D, OR FOR          -     1.0x Base salary and annual incentive (at target), payable in 12 equal
"GOOD REASON"                 monthly installments
BY EXECUTIVE            -     Payment of deferred compensation
                        -     Continued health and life insurance for 12 months (or the Company will, at
                              its option, pay the after-tax cost of securing similar benefits), subject
                              to full offset upon Executive receiving benefits coverage from subsequent
                              employer
                        -     Immediate vesting of benefits (including Company contributions) in Profit
                              Sharing and Saving Plans
                        -     In case of termination within one year of a Change in Control, or
                              termination within one year of the appointment by CHD of a Chief Executive
                              Officer to replace Bob Davies, which person is not an Executive Officer of
                              CHD as of December 31, 2002, all unvested - immediately vest and become
                              exercisable. These vested options will be exercisable for 30 days after
                              the date of termination.



                                                                             -1-

                            CHURCH & DWIGHT CO., INC.

- --------------------------------------------------------------------------------

                       EMPLOYMENT TERMS FOR ANDY STEINBERG



                     
TERMINATION DUE         -     Base salary to date of death
TO DEATH                -     Pro rata annual incentive for year of termination at target
                        -     Settlement of deferred compensation arrangements
                        -     Immediate vesting of benefits (including Company contributions) in Profit
                              Sharing and Savings Plans
                        -     Options vest and may be exercised pursuant to terms of the grant agreement
                              and applicable plan

TERMINATION DUE         -     Base salary through date of Disability
TO DISABILITY           -     Pro rata annual incentive for year of termination at target
                        -     Retains employee status regarding benefits and deferral until earlier of
                              age 65 or receipt of Deferred Compensation or Profit Sharing (see plan documents)
                        -     If recovers from Disability and not offered previous positions, treated as
                              termination without "Cause"
                        -     If offered previous position and refuses without Good Reason, treated as
                              "Quit"
                        -     Options vest and may be exercised pursuant to the terms of the grant
                              agreement and applicable plan

TERMINATION FOR         -     Base salary through date of termination
CAUSE                   -     Settlement of deferred compensation arrangements
                        -     Vested options exercisable for 30 days
                        -     Forfeiture of unexercised options and other outstanding awards

QUIT WITHOUT GOOD       -     Treated the same as a termination for "Cause"
REASON

EXECUTIVE'S             -     Unlimited non-disclosure of "confidential information", employment terms
OBLIGATIONS                   and employee information
                        -     Non-compete as specified for 24 months if terminated without "Cause", may
                              be waived by Company upon written request by Executive unreasonably
                              withheld by Company
                        -     Non-compete as specified for 24 months if terminated for "Cause"
                        -     Non-solicitation of CHD employees for 24 months
                        -     Non-disparagement (mutual)
                        -     All company materials must be returned prior to final day of employment
                        -     Injunctive relief in addition to other available remedies at law





DISPUTE                 -     Mandatory arbitration
RESOLUTION              -     New Jersey courts/laws
                        -     Executive's legal costs reimbursed unless action determined to be in bad
                              faith or frivolous



                                                                             -2-

                            CHURCH & DWIGHT CO., INC.

- --------------------------------------------------------------------------------

                       EMPLOYMENT TERMS FOR ANDY STEINBERG

                                    AGREEMENT
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------



                     
INDEMNIFICATION         -     As provided in the Company's by-laws
                              -     D&O coverage and total indemnification provided in by-laws for Officers
                                    and Directors

OTHER                   -     Executive to execute written release in form and substance satisfactory to
                              the Company in exchange for all severance payments

                                                          DEFINITIONS
                        ----------------------------------------------------------------------------------

GOOD REASON             -     Decrease in base salary or target annual incentive below 45%
                        -     Any required relocation more than 35 miles from CHD headquarters (or then
                              current work location)
                        -     After a Change in Control has occurred, any demotion in your title or
                              significant adverse change in duties, authorities, response or reporting
                              relationships
                        -     Material breach of this agreement by Company after receipt of written
                              notice from Executive and which remains uncured for 30-day
                        -     Executive must act within 60 days of event giving rise to Good Reason

CHANGE IN CONTROL       -     Any person, group or entity acquires 50% or more of CHD's issued and
                              outstanding voting equity
                        -     Director composition change of 50% or more over any 24-month period
                              (unapproved by 2/3's of "Incumbent Directors")
                        -     Merger, consolidation, sale of all or substantially all assets or other
                              transaction approved by shareholders unless 50% or more ownership
                        -     The terms of employment specified herein shall survive a Change in Control

CAUSE                   -     Termination due to Executive's dishonesty, fraud, willful misconduct, or
                              failure to substantially perform services (for any reason other than illness
                              or incapacity) or breach of Executive's fiduciary responsibilities to the
                              Company

COMPETITION             -     Executive prohibited from employment with any business within a company or
                              corporation which sells any products (i) that represent(in the aggregate) 20%
                              or more of such business' revenues and (ii) that compete with any products
                              sold by the Company or any subsidiary thereof for which Executive was
                              directly employed, and for which Executive would perform substantially
                              similar employment function performed at CHD.

CONFIDENTIAL            -     All information concerning the business of CHD or any subsidiary or
INFORMATION                   division thereof relating to any of their products, product development,
                              trade secrets, customers, suppliers, finances, and business plans and
                              strategies other than information which properly of the public domain

DISABILITY              -     Executive qualifies as disabled under the C&D Long Term Disability or
                              other applicable plan, program or policy



                                                                             -3-


                                                                               .
                                                                               .
                                                                               .
                   CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
                 EXHIBIT 11 - COMPUTATION OF EARNINGS PER SHARE
                     (In thousands except per share amounts)



                                                       2002     2001      2000
                                                     -------   -------   -------

                                                                
BASIC:
      Net Income                                     $66,690   $46,984   $33,559
Weighted average shares outstanding                   39,630    38,879    38,321
Basic earnings per share                               $1.68     $1.21     $0.88

DILUTED:
      Net Income                                     $66,690   $46,984   $33,559

Weighted average shares outstanding                   39,630    38,879    38,321
      Incremental shares under stock option plans      2,179     1,940     1,612
                                                     -------   -------   -------
Adjusted weighted average shares outstanding          41,809    40,819    39,933
                                                     -------   -------   -------
Diluted earnings per share                             $1.60     $1.15     $0.84


                   CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
                 EXHIBIT 21 - LIST OF THE COMPANY'S SUBSIDIARIES

1)    Church & Dwight Ltd./Ltee
      Incorporated in Canada

2)    C & D Chemical Products, Inc.
      Incorporated in the State of Delaware,
      D/B/A Armand Products Company, a Partnership

3)    Brotherton Specialty Products Ltd.
      Incorporated in the United Kingdom

4)    Quimica Geral do Nordeste S.A. (QGN)
      Incorporated in Brazil (99% Interest)

5)    Biovance Technologies, Inc.
      Incorporated in the state of Delaware

      The Company's remaining subsidiaries, if considered in the aggregate as a
single subsidiary, would not constitute a significant subsidiary as of December
31, 2002.


                                                                      EXHIBIT 23

INDEPENDENT AUDITORS' CONSENT

We consent to the incorporation by reference in Registration Statements No.
33-60149, 33-60147, 33-24553, 33-6150 and 33-44881 on Form S-8 of our reports
dated March 10, 2003 (which express an unqualified opinion and include an
explanatory paragraph concerning the Company's change in its method of
accounting for goodwill and intangible assets to conform to Statement of
Financial Accounting Standards No. 142) included in the Annual Report on Form
10-K of Church & Dwight Co., Inc. for the year ended December 31, 2002.

Deloitte & Touche LLP
Parsippany, New Jersey
March 10, 2003

EXHIBIT 99.1

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

Management's Discussion and Analysis of Financial Condition and Results of
Operations (MD&A) discusses the Company's performance for 2002 and compares it
to previous years. This MD&A is an integral part of the Annual Report and should
be read in conjunction with all other sections.

CONSOLIDATED RESULTS
2002 COMPARED TO 2001

Net Sales

Net sales increased by $87.4 million or 9.1% to $1047.1 million, compared
to $959.7 million in the previous year. The majority of this increase was due to
the additional sales in Consumer Products stemming from businesses acquired from
Carter-Wallace in the fourth quarter of 2001 amounting to approximately $73.8
million, and additional sales in the Specialty Products acquisition of Biovance
Products Inc. of approximately $7.1 million at the beginning of 2002. Adjusting
for acquisitions and discontinued product lines, as well as the reversal of
prior year promotion liabilities of approximately $5 million (based on latest
estimates), sales of existing products increased approximately 2%.

In November 2001, the Financial Accounting Standards Board ("FASB")
Emerging Issues Task Force ("EITF") reached a consensus on Issue 01-9 (formerly
EITF issues 00-14 and 00-25), "Accounting for Consideration Given to a Customer
or Reseller of the Vendor's Products." This EITF addressed the recognition,
measurement and income statement classification of consideration from a vendor
to a customer in connection with the customer's purchase or promotion of the
vendor's products. The EITF requires the cost of such items as coupons, slotting
allowances, cooperative advertising arrangements, buydowns, and other allowances
to be accounted for as a reduction of revenues, not as a marketing expense as
the Company did previously. The full year 2001 and 2000 net sales have been
reclassified to conform with this pronouncement. The impact was a reduction of
net sales of approximately $130.3 million in 2002, $121.2 million in 2001, and
$104.5 million in 2000. This consensus did not have an effect on net income. In
accordance with the consensus reached, the Company adopted the required
accounting beginning January 1, 2002.

Operating Costs

The Company's gross margin increased to 29.7% from 29.1% in the prior
year. This improvement reflects a significant improvement in Laundry Products
gross margins of 2.7 points due to the virtually full year benefits of the USA
Detergents acquisition and the prior year promotion liability adjustment of $5
million, partially offset by a reduced gross margin of 3.9 points on Personal
Care resulting from higher promotional spending related to 2002 sales, and
higher manufacturing costs associated with the Cranbury production of Arrid
Antiperspirant earlier in the year. To a lesser extent, gross margin was further
hampered by approximately $4 million of equipment obsolescence charges related
to process improvements at two plants, and downsizing and impairment charges at
two other plants. The start-up costs of the Madera, California animal nutrition
facility also negatively impacted gross margin.

Marketing expenses increased $11.4 million to $86.2 million. This increase
is mainly due to the acquired brands and higher spending in support of
deodorizing products, partially offset by lower spending on existing personal
care products.

Selling, general and administrative expenses increased $8.7 million.
Higher personnel related expenses and transition expenses associated with
acquired products, and a $2.3 million impairment charge related to the tradename
valuation of a recently acquired brand name, were partially offset by the
elimination of Goodwill and certain tradename amortization expense associated
with the Company's adoption of SFAS No. 142.

Other Income and Expenses

The increase in equity in earnings of affiliates is due to the inclusion
of $18.1 million of allocated full year profits from Armkel LLC, which reflected
a disproportionate recapture of $5 million of allocated losses sustained in the
fourth quarter of 2001 (See footnote 6 for further explanation of Armkel's
results). The Company's other equity investments, Armand Products and Armakleen,
were virtually unchanged.

Investment income was slightly lower due to lower interest rates on funds
invested.

Interest expense increased significantly from the prior year as a result
of the Company carrying the debt used to finance the two significant
acquisitions in 2001.

Other expenses consist mostly of foreign exchange losses of approximately
$2 million associated with the Company's Brazilian subsidiary QGN.

Taxation

The effective tax rate for 2002 was 34.0%, compared to 36.4% in the
previous year. The lower rate in 2002 reflects the impact of Armkel's foreign
subsidiaries, whose post-tax results are included in equity in earnings of
affiliates, partially offset by a higher state tax rate.

Net Income and Earnings Per Share

The Company's net income for 2002 was $ 66.7 million, equivalent to
diluted earnings of $1.60 per share, compared to $47.0 million or $1.15 per
share in 2001.

2001 COMPARED TO 2000

Net Sales

Net sales increased by $268.5 million or 38.8% to $959.7 million, compared
to $691.2 million in the previous year. The majority of this increase was due to
growth in the Consumer Products business as part of the USA Detergents
acquisition earlier in 2001, and the addition of the Carter-Wallace acquisition
in the fourth quarter of 2001. Excluding these acquisitions, sales of existing
consumer products were about 3% above the prior year.

Operating Costs

The Company's gross margin decreased to 29.1% from 34.8% in the prior
year. The acquisition of the lower margin USA Detergents brands affected the
Company's overall margin structure and accounted for most of the more than five
point reduction in gross margin since the prior year. However, these brands,
which are sold on an "everyday low price" basis, require lower marketing and
sales support, which largely offsets the effect of the lower gross margin. To a
lesser extent, gross margin was also adversely impacted by lower personal care
brand sales, and start-up costs associated with new brands.

Marketing expenses increased $.7 million to $74.8 million. This increase
was mainly due to the addition of the brands acquired from USA Detergents and
Carter-Wallace mentioned earlier in this report.

Selling, general and administrative expenses increased $19.1 million.
Major factors contributing to this increase included higher personnel costs,
which included a $3.5 million increase in deferred compensation expense, from a
$1.0 million gain in 2000 to a $2.5 million charge in 2001, as well as the
ongoing and transitional costs resulting from the aforementioned acquisitions.
Other factors contributing to this increase included goodwill and intangible
amortization costs related to the USA Detergents acquisition, and a higher bad
debt reserve.

During the third quarter of 2000, as a step in implementing the ARMUS
joint venture, the Company announced that it would close its Syracuse plant in
early 2001, and recorded a pre-tax charge of $21.9 million. In 2001, the Company
recorded a $.7 million recovery of expected costs from the plant closure.

Other Income and Expenses

The decrease in equity in earnings of affiliates was due mostly to the
inclusion of a $10 million net loss in the fourth quarter from the Company's new
affiliate, Armkel LLC.

On September 28, the Company completed the acquisition of the consumer
products business of Carter-Wallace in a partnership with the private equity
group, Kelso & Company. As part of this transaction, the Company purchased
outright the Arrid Antiperspirant business in the United States and Canada and
the Lambert Kay pet care business. Armkel LLC, a 50/50 joint venture with Kelso,
purchased the remainder of Carter-Wallace's domestic and international consumer
products business, including Trojan condoms, Nair depilatories and First
Response pregnancy kits. Armkel reported fourth quarter sales of $95.4 million
and a net loss of $15.6 million. The major reason for this loss was an
accounting charge related to a step-up in the value of opening inventories in
accordance with purchase accounting principles. As these inventories were sold,
the step-up was charged to current operations. The total step-up was
approximately $23.2 million, of which $15.1 million was charged in the fourth
quarter and the balance was charged in 2002. Other factors contributing to the
loss included integration costs, and promotional activity of the predecessor
company prior to the acquisition, which shifted sales and profit to the third
quarter from the fourth quarter of 2001.

Under the agreement with Kelso, the Company is allocated 50% of all losses
up to $10 million, and 100% of such losses above that level. As a result, the
Company recorded a loss of $10 million on its investment in Armkel.

This Armkel loss was partially offset by equity in earnings of affiliates
from the Armand Products Company, and by an increase in profitability from the
ArmaKleen Company. The ArmaKleen Company is a 50/50 joint venture with the
Safety-Kleen Company, the latter of which filed for chapter 11 during the second
quarter of 2000. This caused the ArmaKleen Company to record a $1.4 million
charge, half of which resulted in a reduction in our profitability during 2000.
Should the Safety-Kleen Company be unable to emerge from Chapter 11, the results
of operations and financial position of the ArmaKleen Company would be adversely
affected.

Investment income was relatively unchanged from the prior year.

Interest expense increased approximately $6.7 million as a result of the
debt incurred to finance the USA Detergents acquisition at the end of May, and
the Carter-Wallace acquisition at the end of September.

Minority interest expense is primarily the 35% of the earnings generated
by the ARMUS joint venture through the month of May that accrued to USA
Detergents.

Taxation

The effective tax rate for 2001 was 36.4%, compared to 35.3% in the
previous year. The higher effective rate in 2001 was primarily due to the impact
of a relatively lower level of tax depletion deductions and other tax credits on
higher pre-tax income.

Net Income and Earnings Per Share

The Company's net income for 2001 was $47.0 million, equivalent to diluted
earnings of $1.15 per share, compared to $33.6 million or $.84 per share in
2000.

SEGMENT RESULTS

Current and prior year results by segment are presented based upon
segments as described in Note 17 of the Notes to Consolidated Financial
Statements. Product-based segment results exclude items that are not included in
measuring business performance for management reporting purposes, most notably
certain financing, investing, and plant shutdown charges.

Sales in affiliate companies over which the Company exerts significant
influence, but does not control the financial and operating decisions, are
reported for segment purposes in a manner similar to consolidated subsidiaries.
The effect of this convention is eliminated in the corporate segment and certain
reclassifications of expenses between cost of sales and selling, general and
administrative expenses are also reflected in the corporate segment to adjust
management reporting results to the amounts appearing in the financial
statements. Key segment operating results for the years 2000 through 2002 are as
follows:

CONSUMER SPECIALTY
PRODUCTS PRODUCTS SUBTOTAL CORPORATE TOTAL
-------- -------- -------- --------- -----

NET SALES
2002 $1,246,547 $223,375 $1,469,922 $(422,773) $1,047,149
2001 864,457 219,223 1,083,680 (123,973) 959,707
2000 529,585 211,668 741,253 (50,062) 691,191

OPERATING PROFIT
2002 152,855 28,628 181,483 (76,969) 104,514
2001 66,323 29,285 95,608 (2,087) 93,521
2000 52,753 26,981 79,734 (27,573) 52,161

CONSUMER PRODUCTS

2002 compared to 2001

Combined Consumer Product sales of the Company and its affiliates grew
44.2% to $1246.5 million in 2002 primarily due to the businesses acquired from
Carter-Wallace of approximately $380.0 million at the end of September 2001.
These acquired businesses were the key drivers behind the domestic Personal Care
Products growth in net sales of over 140% to $385.3 million in 2002 from $160.0
million in 2001, and the growth in International net sales in excess of 150% to
$205.0 million in 2002 from $81.3 in 2001. Excluding the acquired businesses,
and adjusting for discontinued product line sales and the adjustment for prior
year promotion liabilities, sales of existing products grew approximately 2%
with higher Deodorizing and Cleaning and Laundry Product sales more than
offsetting lower personal care sales.

Operating profit increased 130% to $152.9 million in 2002 from $66.3
million in 2001 due to the acquired businesses, which included an $8.1 million
charge for the remaining step-up of opening inventory values established as part
of purchase accounting. In addition, operating profit benefited from improved
Laundry Product profit margins of 2.7 points due to the virtually full year
benefits of the USA Detergents acquisition, the prior year promotion adjustment
of $5 million, partially offset by a reduced gross margin of 3.9 points on
existing Personal Care products from higher promotional spending related to 2002
sales, and higher manufacturing costs associated with the Cranbury production of
Arrid Antiperspirant and Nair depilatories earlier in the year. To a lesser
extent operating profit absorbed approximately $4 million of equipment
obsolescence charges related to process improvements at two plants, and
downsizing and impairment charges at two other plants. The Consumer Product
segment also recorded a $2.2 million impairment charge related to the tradename
valuation of a recently acquired brand name.

2001 compared to 2000

Combined Consumer Product sales grew 63.2% to $864.5 million in 2001 from
$529.6 million in 2000. The majority of this increase was due to the USA
Detergents acquisition in May 2001 and the addition of the Carter-Wallace
acquisition in the fourth quarter of 2001. Excluding both acquisitions, sales of
existing consumer products grew approximately 4.5% above the year 2000 level,
with higher sales of deodorizers and cleaners, and laundry products more than
offsetting lower personal care sales.

Operating profit increased 25.6% to $66.3 million in 2001 from $52.8
million due to the acquired businesses, which was net of a $15.1 million initial
charge for the step-up of opening inventory values established as part of
purchase accounting as well as the increased goodwill and intangible
amortization costs related to the USA Detergents acquisition, and the ongoing
and transitional costs resulting from the aforementioned acquisitions.

SPECIALTY PRODUCTS

2002 compared to 2001

Combined Specialty Product sales grew approximately 2% to $223.4 million
in 2002 from $219.2 million in 2001 largely as a result of the acquisition of
Biovance Technologies Inc. of approximately $7.1 million at the

beginning of 2002. These higher sales were partially offset by lower sales of
Armakleen's aqueous cleaning products and discontinued sales of certain
immaterial product lines.

Operating profit declined slightly by approximately 2% reflecting the
start-up costs of the new Madera, California animal nutrition facility, for the
production of Megalac Rumen Bypass Fats and related higher-value Megalac
products for the West Coast dairy feed additives market. Operating profit was
also negatively impacted by higher raw material costs for Megalac related
products. A partial offset to these operating profit decreases was the higher
profit contribution from the addition of the Biovance acquisition.

2001 compared to 2000

Combined Specialty Product sales grew approximately 3.5% to $219.2 million
in 2001 from $211.7 million in 2000. This increase was mostly attributable to
growth in animal nutrition products, particularly Megalac Rumen Bypass Fats, and
higher sales of QGN, the Company's then 85% owned Brazilian subsidiary.

Operating profit

The combination of growth in animal nutrition sales together with lower
raw material costs, particularly for Megalac Rumen Bypass Fats, were the major
reasons for the operating profit growth of 8.5% to $29.3 in 2001 from $27.0 in
2000.

LIQUIDITY AND CAPITAL RESOURCES

The Company had outstanding long-term debt of $352.5 million, and cash
less short-term debt of $60.4 million, for a net debt position of $292.1 million
at December 31, 2002. This compares to $365.7 million at December 31, 2001.

In the fourth quarter of 2001, the Company financed its investment in
Armkel, the acquisition of USA Detergents and the Anti-perspirant and Pet Care
businesses from Carter-Wallace with a $510 million credit facility consisting of
$410 million in 5 and 6 year term loans. The entire amount of the term loans was
drawn at closing and a $100 million revolving credit facility remains fully
un-drawn. The term loans pay interest at 200 and 250 basis points over LIBOR,
depending on the ratio of total debt to EBITDA. Financial covenants include a
leverage ratio and an interest coverage ratio, which if not met, could result in
an event of default and trigger the early termination of the credit facility, if
not remedied within a certain period of time. EBITDA, as defined by the
Company's loan agreement, which includes an add-back of certain acquisition
related costs, was approximately $144 million in 2002. The leverage ratio at
December 31, 2002 per the loan agreement, therefore, was approximately 2.5
versus the agreement's maximum 3.5, and the interest coverage ratio was 6.00
versus the agreement's minimum of 4.25. This credit facility is secured by a
blanket lien on all of the Company's assets. The reconciliation of Net Cash
Provided by Operating Activities to the Company's key liquidity measure,
"EBITDA", per the term loan agreement, is as follows (in millions):

Net Cash Provided by Operating Activities ........ $114.0
Plus:
Interest Expense .............................. 24.0
Current Income Tax Provision .................. 16.6
Distributions from Affiliates ................. 4.7
Other ......................................... 2.2
Less:
Decrease in Working Capital ................... (15.8)
Interest Income ............................... (1.8)
------

EBITDA ........................................... $143.9
======

In 2002, operating cash flow was $114.0 million. Major factors
contributing to the cash flow from operating activities included higher
operating earnings before non-cash charges for depreciation and amortization,
and a significant reduction in working capital, particularly inventories, offset
by the net non-cash impact from the equity in earnings of affiliates. Operating
cash flow was used for additions to property, plant and equipment and to
consummate the acquisition of Biovance. Operating cash together with proceeds
from stock options exercised and a

collected note receivable, were used to make both voluntary and mandatory debt
repayments and to pay cash dividends.

Commitments as of December 31, 2002. The table below summarizes the
Company's material contractual obligations and commitments as of December 31,
2002.

PAYMENTS DUE BY PERIOD
(THOUSANDS OF DOLLARS)

2004 TO 2007 TO AFTER
TOTAL 2003 2006 2008 2008
-------- -------- -------- -------- --------

Principal payments on borrowings:
Long-term debt
Syndicated Financing Loans ...... $358,470 $ 10,770 $103,644 $244,056 $ --
Various Debt from Brazilian Banks 5,888 4,490 1,254 144 --
Industrial Revenue Bonds ................. 4,075 685 2,055 1,335 --
Other commitments:
Operating Leases Obligations ........ $ 52,245 $ 9,503 $ 18,591 $ 10,100 $ 14,051
Letters of Credit (1) ............... 5,692 5,692 -- -- --
Guarantees(2) ....................... 2,969 2,969 -- -- --
Surety/Performance bonds(3) ......... 830 830 -- -- --
Raw Materials ....................... 16,841 16,841 -- -- --
Joint Venture Agreement(4) .......... 111,750 -- -- -- 111,750
-------- -------- -------- -------- --------
Total .................................... $558,760 $ 51,780 $125,544 $255,635 $125,801
======== ======== ======== ======== ========

(1) Letters of credit with several banks guarantee payment for such things as
insurance claims in the event of the Company's insolvency, a year's worth
of lease payments on a warehouse, and 200 days of interest on the
Industrial Revenue Bond borrowing.

(2) Guarantees represent minimum performance based payment obligations in
connection with the Biovance acquisition.

(3) Surety/performance bonds were established for construction of the
Company's headquarters addition in Princeton, NJ and for construction
activities at the Company's North Brunswick, NJ plant.

(4) Reflects the amount payable to Kelso in the event of a sale of Armkel or
as a result of Kelso's exercise of its put option under the Joint Venture
Agreement.

The Company generally relies on operating cash flows supplemented by
borrowings to meet its financing requirements. Our diverse product offerings,
strong brand names and market positions have provided a stable base of cash
flow. Our diverse product line is marketed through multiple distribution
channels, reducing our dependence on any one category or type of customer.
Similar to other basic consumer products, we believe that consumers purchase our
products largely independent of economic cycles. However, the Company's ability
to meet its financial obligations depends on successful financial and operating
performance. The Company cannot guarantee that its business strategy will
succeed or that it will achieve the anticipated financial results. The Company's
financial and operational performance depends upon a number of factors, many of
which are beyond its control. These factors include:

- - Competitive conditions in the categories of the consumer products industry
in which we compete;
- - Operating difficulties, operating costs or pricing pressures we may
experience;
- - Passage of legislation or other regulatory developments that affects us
adversely;
- - Delays in implementing any strategic projects; and
- - Current geo-political events.

The Company cannot give assurance that it will generate sufficient cash
flow from operations or that it will be able to obtain sufficient funding to
satisfy all its obligations, including those noted above. If the Company is
unable to pay its obligations, it will be required to pursue one or more
alternative strategies, such as selling assets, refinancing or restructuring
indebtedness or raising additional equity capital. However, the Company cannot
give assurance that any alternative strategies will be feasible or prove
adequate to satisfy its obligation.

The Company has a total debt-to-capital ratio of approximately 52%. At
December 31, 2002 the Company had $100 million of additional domestic borrowing
capacity available through its revolving credit agreement. Capital expenditures
in 2003 are expected to be moderately lower than the level of the prior year.
Management believes that operating cash flow, coupled with the Company's access
to credit markets, will be sufficient to meet the anticipated cash requirements
for the coming year.

In 2001, operating cash flow was $41.6 million. Major factors contributing
to the cash flow from operating activities included higher operating earnings
before non-cash charges for depreciation and amortization, and the
aforementioned

impact from the loss in earnings of affiliates. Operating cash flow was used to
meet increased working capital needs to support the higher sales stemming from
the two acquisitions during the year, and to fund the related transitional
activities. Operating cash flow with net proceeds from long-term borrowings,
were used to consummate the two acquisitions made that year, and to finance the
Company's investment in Armkel. To a lesser extent available cash was used to
finance additions to property, plant and equipment, to make investments in notes
receivable, and to pay dividends.

Recent Event

On January 16, 2003, the Company entered into a receivables purchase
agreement with an issuer of receivables-backed commercial paper in order to
refinance a portion, $60,000,000, of its primary credit facility. Under this
arrangement, the Company sold, and will sell from time to time, throughout the 3
year term of the agreements, its trade accounts receivable to a wholly-owned
special purpose finance subsidiary, Harrison Street Funding LLC, a Delaware
limited liability company ("Harrison"). Harrison in turn sold, and will sell on
an ongoing basis, to the commercial paper issuer an undivided interest in the
pool of accounts receivable. The transactions were entered into to reduce
certain expenses associated with the credit facility in addition to lowering the
Company's financing costs by accessing the commercial paper market. These
transactions will be reflected as borrowings on the consolidated financial
statements of the Company. Consequently, the receivables assets of Harrison will
be included in the consolidated assets of the Company shown on such financial
statements. However, under these agreements, as was the case under the credit
facility, such assets will not be available to satisfy claims of creditors other
than the commercial paper issuer.

Armkel

The Armkel venture was initially financed with $229 million in equity
contributions, of which approximately $112 million was contributed by the
Company, and an additional $445 million of debt.

Armkel LLC had outstanding long-term debt of $412 million, and cash less
short-term debt of $24 million, for a net debt position of $388 million at
year-end including discontinued operations. In addition, Armkel had unused
revolving credit bank lines of $85 million. Any debt on Armkel's balance sheet
is without recourse to the Company.

Under the terms of its joint venture agreement with Kelso, the Company has
a call option to acquire Kelso's interest in Armkel in three to five years after
the closing, at fair market value as defined in the agreement subject to a floor
and a cap. If the Company does not exercise its call option, then Kelso may
request the Company to purchase its interest. If the Company elects not to
purchase Kelso's interest, then Kelso's and the Company's equity in the joint
venture may be offered to a third party. If such a sale should occur, depending
on the proceeds received, the Company may be required to make a payment to Kelso
up to an amount of approximately $112 million. Kelso also may elect to have the
Company purchase its interest for $112 million. This amount is not payable until
the eighth year from the formation of the venture. Finally, Kelso may require
the Company to purchase its interest upon a change in control as defined in the
joint venture agreement. The venture's Board has equal representation from both
the Company and Kelso.

OTHER ITEMS

MARKET RISK

Concentration of Risk

A group of three Consumer Product customers accounted for approximately
23% of consolidated net sales in 2002, including a single customer Walmart,
which accounted for approximately 16%. A group of three customers accounted for
approximately 23% of consolidated net sales in 2001 adjusted for EITF issue
01-9, including Walmart, which accounted for approximately 14%. This group
accounted for 21% in 2000 and is adjusted for the aforementioned EITF.

Although it is not included in the top three customers noted above, Kmart
Corporation historically has represented approximately 3% of our consolidated
net sales. Kmart's bankruptcy followed by its announcement to close an
additional 329 stores in the first half of 2003 could cause a reduction in sales
to Kmart of approximately 15% to 20%. It is not clear, and to what extent, these
lost sales may be made to other retailers.

As part of the USA Detergents merger agreement, the Company divested USA
Detergents non-laundry business and other non-core assets to former USA
Detergents executives under the new company name of USA Metro, Inc. ("USAM"),
subsequently renamed USA Detergents.

The Company has a concentration of risk with USAM at December 31, 2002 in
the form of trade accounts receivable and an amount due for leased space of
approximately $3.1 million, a 16% equity interest in USAM of $0.4 million and a
note receivable for other assets of $2.0 million-payments start with the
beginning of 2006. This note has a carrying value of approximately $1.4 million
using an effective interest rate of 17%.

Should USAM be unable to meet these obligations, the impact would have an
adverse effect on the Company's Consolidated Statement of Income.

Interest Rate Risk

The Company's primary domestic borrowing facility is made up of a $ 510
million credit agreement of which $358.5 million remained outstanding as of
December 31, 2002; and $100 million of a revolving credit agreement all of which
was un-drawn at December 31, 2002. The weighted average interest rate on these
borrowings at December 31, 2002, excluding deferred financing costs and
commitment fees, was approximately 5.1% including the effect of hedges. The
Company entered into interest rate swap agreements to reduce the impact of
interest rate fluctuations on this debt, as required by the credit agreement.
The swap agreements are contracts to exchange floating rate for fixed interest
rate payments periodically over the life of the agreements without the exchange
of the underlying notional amounts. As of December 31, 2002, the Company entered
into agreements for a notional amount of $235 million, swapping debt with a one-
month LIBOR rate for a fixed rate that averages 5.8 %. As a result, the swap
agreements eliminate the variability of interest expense for that portion of the
Company's debt. On an annualized basis a drop of 10% in interest rates would
result in a $.9 million payment under the swap agreement in excess of what would
have been paid based on the variable rate. Under these circumstances, a little
more than half of this payment would be offset by the amount of reduced interest
expense on the $123.5 million of variable debt not hedged. However, a 10%
increase in interest rates would result in a $.5 million increase in interest
expense on the debt not hedged.

The Company's domestic operations and its Brazilian subsidiary have short
and long- term debts that are floating rate obligations. If the floating rate
were to change by 10% from the December 31, 2002 level, annual interest expense
associated with the floating rate debt would be immaterial.

Foreign Currency

The Company, from time to time, enters into forward exchange contracts to
hedge anticipated but not yet committed sales denominated in the Canadian
dollar, the British pound and the Japanese Yen. The terms of these contracts are
for periods of under 12 months. The purpose of the Company's foreign currency
hedging activities is to protect the Company from the risk that the eventual
dollar net cash inflows from the sale of products to foreign customers will be
adversely affected by changes in exchange rates. The Company did not have any
forward exchange contracts outstanding at December 31, 2002 and December 31,
2001.

The Company is also subject to translation exposure of the Company's
foreign subsidiary's financial statements. A hypothetical 10% change in the
exchange rates for the U.S. Dollar to the Canadian Dollar, the British Pound and
the Brazilian Real from those at December 31,2002 and 2001, would result in an
annual currency translation gain or loss of approximately $.3 million in 2002
and $.4 million in 2001.

Equity Derivatives

The Company has entered into equity derivative contracts of its own stock
in order to minimize the impact on earnings resulting from fluctuations in
market price of shares in the Company's deferred compensation plan. These
contracts, which consist of cash settled call options in the amount of 165,000
shares, hedge approximately 50% of the shares related to the plan and are marked
to market through earnings. As a result, the Company recognized income of
approximately $.4 million in 2002, and expense of $.5 million in 2001.

Related Party Transactions

The Company has achieved substantial synergies by combining certain of its
operations with those of Armkel, particularly in the areas of sales,
manufacturing and distribution, and most service functions. Armkel has retained
its core marketing, research & development, and financial planning capabilities,
and continues to manufacture condoms, but purchases virtually all the support
services it requires for its U.S. domestic business from the Company under a
management services agreement, which has a term of five years with possible
renewal. As a first step, the Company merged the two sales organizations during
the fourth quarter of 2001. In early 2002, the Company began transferring
production of antiperspirants and depilatories from the former Carter-Wallace
plant at Cranbury, NJ, to the Company's plant at Lakewood, NJ, which is a more
efficient producer of antiperspirants and other personal care products. This
process was completed by the third quarter 2002. During this time, the Company
also integrated the planning and purchasing, accounting and management
information systems, and other service functions.

During 2002, the Company invoiced Armkel $22.5 million for primarily
administrative and management oversight services (which is included as a
reduction of selling general and administrative expenses), and purchased $7.1
million of deodorant anti-perspirant inventory produced by Armkel at its cost.
The Company sold Armkel $1.4 million of Arm & Hammer products to be sold in
international markets. Armkel invoiced the Company $1.7 million of transition
administrative services. The Company has an open receivable from Armkel at
December 31, 2002 of approximately $4.8 million that primarily related to
administrative services, partially offset by amounts owed for inventory.

As noted in the Concentration of Risk section of this exhibit, the Company
divested USA Detergents non-laundry business and other non-core assets to former
USA Detergents executives concurrent with the merger agreement. The Company has
a 16% ownership interest in the newly formed company USAM. The Company supplies
USAM with certain laundry and cleaning products it produces to meet the needs of
the markets USAM is in at cost plus a mark-up. In addition, the Company leases
manufacturing and office space to USAM under a separate agreement.

During 2002, the Company sold $23.2 million of laundry and cleaning
products to USAM. Furthermore, the Company billed USAM $.5 million and USAM
billed the Company $.2 million for leased space. For open amounts receivable at
December 31, 2002, see Concentration of Risk section of this exhibit.

Significant Accounting Policies

Our significant accounting policies are more fully described in Note 1 to
our consolidated financial statements. Certain of our accounting policies
require the application of significant judgment by management in selecting the
appropriate assumptions for calculating financial estimates. By their nature,
these judgments are subject to an inherent degree of uncertainty. These
judgments are based on our historical experience, our observance of trends in
the industry, information provided by our customers and information available
from other outside sources, as appropriate. Our significant accounting policies
include:

Promotional and Sales Returns Reserves.

The reserves for consumer and trade promotion liabilities, and sales
returns are established based on our best estimate of the amounts necessary to
settle future and existing claims on products sold as of the balance sheet date.
Promotional reserves are provided for sales incentives made directly to
consumers such as coupons, and sales incentives made to vendors such as
slotting, cooperative advertising, incentive discounts based on volume of sales
and other arrangements. The Company relies on historical experience and
forecasted data to determine the required reserves. For example, the Company
uses historical experience to project coupon redemption rates to determine
reserve requirements. Based on the total face value of coupons dropped over the
past couple of years, a .1% deviation in the actual rate of redemptions versus
the rate accrued for in the financial statements could result in approximately a
$3 million difference in the reserve required. With regard to other promotional
reserves and sales returns, we use forecasted appropriations, customer and sales
organization inputs, and historical trend analysis in arriving at the reserves
required. If the Company's estimates for vendor promotional activities and sales
returns were to differ by 10%, the impact to promotional spending and sales
return accruals would be approximately $4 million. While we believe that our
promotional and sales returns reserves are adequate and that the judgment
applied is appropriate, such amounts estimated to be due and payable could
differ materially from what will actually transpire in the future. During 2002,
the Company reversed prior year promotion liabilities of approximately $5
million based on adjustments to previous estimates.

Impairment of Goodwill, Trademarks and Other Intangible Assets and Property,
Plant and Equipment

Carrying values of goodwill, trademarks and other intangible assets are
reviewed periodically for possible impairment in accordance with SFAS No. 142,
"Goodwill and Other Intangible Assets". The Company's impairment review is based
on a discounted cash flow approach that requires significant judgment with
respect to future volume, revenue and expense growth rates, and the selection of
an appropriate discount rate. With respect to goodwill, impairment occurs when
the carrying value of the reporting unit exceeds the discounted present value of
cash flows for that reporting unit. For trademarks and other intangible assets,
an impairment charge is recorded for the difference between the carrying value
and the net present value of estimated cash flows, which represents the
estimated fair value of the asset. The Company uses its judgment in assessing
whether assets may have become impaired between annual valuations. Indicators
such as unexpected adverse, economic factors, unanticipated technological change
or competitive activities, acts by governments and courts, may signal that an
asset has become impaired.

Property, plant and equipment and other long-lived assets are reviewed
periodically for possible impairment in accordance with SFAS No. 144 "Accounting
for the Impairment or Disposal of Long-Lived Assets". The Company's impairment
review is based on an undiscounted cash flow analysis at the lowest level for
which identifiable cash flows exist. The analysis requires management judgment
with respect to changes in technology, the continued success of product lines,
and future volume, revenue and expense growth rates. The Company conducts annual
reviews for idle and underutilized equipment, and reviews business plans for
possible impairment implications. Impairment occurs when the carrying value of
the asset exceeds the future undiscounted cash flows. When an impairment is
indicated, the estimated future cash flows are then discounted to determine the
estimated fair value of the asset and an impairment charge is recorded for the
difference between the carrying value and the net present value of estimated
future cash flows.

The estimates and assumptions used are consistent with the business plans
and estimates that the Company uses to manage its business operations. The use
of different assumptions would increase or decrease the estimated value of
future cash flows and would have increased or decreased any impairment charge
taken. Future outcomes may also differ. If the Company's products fail to
achieve estimated volume and pricing targets, market conditions unfavorably
change or other significant estimates are not realized, then the Company's
revenue and cost forecasts may not be achieved, and the Company may be required
to recognize additional impairment charges. In 2002, the Company recognized
trademark, equipment obsolescence and plant impairment charges of approximately
$6.2 million.

Inventory Reserves

When appropriate, the Company provides allowances to adjust the carrying
value of its inventory to the lower of cost or market (net realizable value),
including any costs to sell or dispose. The Company identifies any slow moving,
obsolete or excess inventory to determine whether a valuation allowance is
indicated. The determination of whether inventory items are slow moving,
obsolete or in excess of needs requires estimates and assumptions about the
future demand for the Company's products, technological changes, and new product
introductions. The estimates as to the future demand used in the valuation of
inventory are dependent on the ongoing success of its products. In addition, the
Company's allowance for obsolescence may be impacted by the rationalization of
the number of stock keeping units. To minimize this risk, the Company evaluates
its inventory levels and expected usage on a periodic basis and records
adjustments as required. Reserves for inventory obsolescence were $5.3 million
at December 31, 2002, and $6.7 million at December 31, 2001.

Valuation of Pension and Postretirement Benefit Costs

The Company's pension and postretirement benefit costs are developed from
actuarial valuations. Inherent in these valuations are key assumptions provided
by the Company to our actuaries, including the discount rate and expected
long-term rate of return on plan assets. Material changes in the Company's
pension and postretirement benefit costs may occur in the future due to changes
in these assumptions.

The discount rate is subject to change each year, consistent with changes
in applicable high-quality, long-term corporate bond indices. Based on the
expected duration of the benefit payments for our pension plans and

postretirement plans we refer to applicable indices such as the Moody's AA
Corporate Bond Index to select a rate at which we believe the pension benefits
could be effectively settled. Based on the published rates as of December 31,
2002, the Company used a discount rate of 6.75% for both plans, a decline of 50
basis points from the 7.25% rate used in 2001. This had the effect of increasing
the projected benefit obligation for pensions and postretirement benefits by
approximately $1.1 million and $0.7 million, respectively, for the year ended
December 31, 2002.

The expected long-term rate of return on pension plan assets is selected
by taking into account a historical trend based on a 15 year average, the
expected duration of the projected benefit obligation for the plans, the asset
mix of the plans, and known economic and market conditions at the time of
valuation. Based on these factors, the Company's expected long-term rate of
return as of December 31, 2002 is 8.75%, a decline of 50 basis points from the
9.25% rate used at December 31, 2001. A 50 basis point change in the expected
long-term rate of return would result in less than a $0.1 million change in
pension expense for 2003.

On December 31, 2002 the accumulated benefit obligation related to our
pension plans exceeded the fair value of the pension plan assets (such excess is
referred to as an un-funded accumulated benefit obligation). This difference is
attributed to (1) an increase in the accumulated benefit obligation that
resulted from the decrease in the interest rate used to discount the projected
benefit obligation to its present settlement amount from 7.25% to 6.75% and (2)
a decline in the market value of the plan assets at December 31, 2002. As a
result, in accordance with SFAS No. 87, the Company recognized an additional
minimum pension liability of $3.9 million included in benefit obligations, and
recorded a charge, net of tax, to accumulated other comprehensive loss of $2.4
million which decreased stockholders' equity. The charge to stockholders' equity
for the excess of additional pension liability represents a net loss not yet
recognized as pension expense. Based on the aforementioned assumptions, the
income statement impact for 2003 is estimated to be approximately $.4 million
charged to earnings. On a cash basis, a minimum contribution of approximately $1
million will be required in 2003.

Recent Accounting Pronouncements

In August 2001, the FASB issued SFAS No. 143, "Accounting for Asset
Retirement Obligations." SFAS No. 143 addresses financial accounting and
reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. The Company has assessed SFAS
No. 143 and does not anticipate it to have a material impact on the Company's
financial statements. The effective date for the Company is January 1, 2003.

In August 2001, the FASB issued SFAS No. 144, "Accounting for the
Impairment or Disposal of Long-Lived Assets". SFAS No. 144 addresses financial
accounting and reporting for the impairment or disposal of long-lived assets.
This statement supersedes FASB Statement No. 121, "Accounting for the Impairment
of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of" and the
accounting and reporting provisions of APB Opinion No. 30, "Reporting the
Results of Operations-Reporting the Effects of Disposal of a Segment of a
Business, and Extraordinary, Unusual and Infrequently Occurring Events and
Transactions", for the disposal of a business (as previously defined in that
Opinion). This statement also amends ARB No. 51, "Consolidated Financial
Statements", to eliminate the exception to consolidation for a subsidiary for
which control is likely to be temporary. The Company has evaluated the impact of
the SFAS No. 144 and has determined there is no material impact on the Company's
consolidated financial statements (See Significant Accounting Policies contained
elsewhere in this report).

During the second quarter of 2002, the FASB issued SFAS No. 145,
"Rescission of FASB Statements No. 4, 44 and 64, Amendment of FASB Statement No.
13, and Technical Corrections." This Statement rescinds FASB Statement No. 4,
"Reporting Gains and Losses from Extinguishment of Debt", and an amendment of
that Statement, FASB Statement No. 64, "Extinguishment of Debt Made to Satisfy
Sinking-Fund Requirements." This Statement also rescinds FASB Statement No. 44,
"Accounting for Intangible Assets of Motor Carriers." This Statement amends FASB
Statement No. 13, "Accounting for Leases", to eliminate an inconsistency between
the required accounting for sale-leaseback transactions and the required
accounting for certain lease modifications that have economic effects that are
similar to sale-leaseback transactions. This Statement also amends other
existing authoritative pronouncements to make various technical corrections,
clarify meanings or describe their applicability under changed conditions. The
Company will adopt the provisions of this Statement upon its effective date and
does not anticipate it to have a material effect on its financial statements.

In June 2002, the FASB issued SFAS No. 146, "Accounting for Costs
Associated with Exit or Disposal Activities." The standard requires companies to
recognize certain costs associated with exit or disposal activities when they
are incurred rather than at the date of a commitment to an exit or disposal
plan. Examples of costs covered by the standard include lease termination costs
and certain employee severance costs that are associated with a restructuring,
discontinued operation, plant closing, or other exit or disposal activity.
Statement 146 is to be applied prospectively to exit or disposal activities
initiated after December 31, 2002. The Company is currently evaluating the
impact this pronouncement will have on its consolidated financial statements.

In November 2002, the FASB issued Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" ("Interpretation"). This Interpretation
elaborates on the existing disclosure requirements for most guarantees,
including loan guarantees such as standby letters of credit. It also clarifies
that at the time a company issues a guarantee, the company must recognize an
initial liability for the fair market value of the obligations it assumes under
that guarantee and must disclose that information in its interim and annual
financial statements. The initial recognition and measurement provisions of the
Interpretation apply on a prospective basis to guarantees issued or modified
after December 31, 2002. The disclosure provisions are effective for financial
statements of interim or annual periods ending after December 15, 2002.

In December 2002, the FASB issued Statement No 148, "Accounting for
Stock-Based Compensation - Transition and Disclosure (SFAS 148)". SFAS 148
provides alternative methods of transition for a voluntary change to the fair
value based method of accounting for stock-based employee compensation and the
effect of the method used on reported results. SFAS No. 148 is effective for the
year ended December 31, 2002 and for interim financial statements for the first
quarter of 2003. The Company is currently evaluating whether or not to elect the
fair value method of accounting for stock compensation.

In January 2003, the FASB issued Interpretation No. 46, "Consolidation of
Variable Interest Entities (an interpretation of ARB No.51)". This
Interpretation addresses consolidation by business enterprises of certain
variable interest entities, commonly referred to as special purpose entities
(SPEs). The Company has implemented the disclosure provisions of this
Interpretation in these financial statements. The Company will be required to
implement the other provisions of this Interpretation in 2003.

Competitive Environment

The Company operates in highly competitive consumer-product markets, in
which cost efficiency, new product offerings and innovation are critical to
success.

Currently, over 90% of our sales are generated in the United States, where
consumer product markets are mature and characterized by high household
penetration, particularly with respect to our most significant product
categories such as laundry detergents. The consumer products industry,
particularly the detergent, personal care and deodorizing categories, is
intensely competitive. To protect our existing market share or to capture
increased market share, the Company may need to increase expenditures for
promotions and advertising and to introduce and establish new products.

Many of our competitors are large companies, including The Procter &
Gamble Company, Unilever, Inc., The Clorox Company, Colgate-Palmolive Company,
and S.C. Johnson & Son, Inc., which have greater financial resources than the
Company. These companies have the capacity to outspend the Company in an attempt
to gain market share.

Because of the competitive environment facing retailers, the Company faces
pricing pressure from these customers, particularly the high-volume retail store
customers, who have increasingly sought to obtain pricing concessions or better
trade terms. These concessions or terms could reduce the Company's margins.
Furthermore, if the Company is unable to maintain price or trade terms
acceptable to its trade customers, the customers could increase product
purchases from our competitors, which would harm the Company's sales and
profitability.

Consumer products, particularly those that are value-priced, are subject
to significant price competition. From time to time, the Company may need to
reduce the prices for some of its products to respond to competitive and
customer pressures and to maintain market share.

Most of the Company's laundry and household cleaning products are sold as
value brands, which makes their cost position most important. To stay
competitive in this category, the Company acquired USA Detergents outright on
May 25, 2001, after a short-lived joint venture had been formed which combined
both laundry detergent businesses. The acquisition combined Church & Dwight's
ARM & HAMMER Powder and Liquid Laundry Detergents and USA Detergents' XTRA
Powder and Liquid Detergents and NICE 'N FLUFFY Liquid Fabric Softener brands.
This combination increased the Company's laundry product sales to over $400
million a year, making it the third largest entity in the $7 billion U.S.
laundry detergent business. The Company expected the synergies from the
combination to potentially reach an annual rate of $15 million a year once the
integration was completed. In 2002, the Company gained the full-year benefit of
the manufacturing, distribution and back office integration programs completed
in the back half of the previous year. In addition, about mid-year 2002, the
Company implemented a series of packaging and formulation changes designed to
more fully integrate the two product lines. Based on this activity, the Company
significantly increased the contribution from the laundry business in 2002, and
is operating at or above its target synergy levels by year-end.

The Company has entered the oral care and personal care and deodorizing
businesses using the unique strengths of its ARM & HAMMER trademark and baking
soda technology. These are highly innovative markets, characterized by a
continuous flow of new products and line extensions, and requiring heavy
advertising and promotion.

In the toothpaste category, after two years of leading its category in
growth, driven by the success of ARM & HAMMER ADVANCE WHITE toothpaste, the
Company's share dropped in both 2001 and 2002 mainly as a result of competitive
new products and aggressive spending by other manufacturers in the category.

In the personal care category, several new products and line extensions in
oral care were expanded during the final quarter of 2001, in particular ARM &
HAMMER Advance Breath Care, a line of oral deodorization products including
mouthwash, mints and toothpaste. This oral care line of products did not live up
to our expectations in 2002 particularly since key retailers started moving away
from mints and therapeutic gums in the oral care aisle of the store. Unless this
trend can be halted or reversed, this particular line of products could
potentially be de-listed by those retailers. On the other hand, the Company's
re-launch of its deodorant antiperspirant with the introduction of ARM & HAMMER
UltraMax Deodorant Antiperspirant performed well during 2002.

Early in 2002, the Company transferred production of Arrid and Lady's
Choice antiperspirants from the former Carter-Wallace plant at Cranbury, New
Jersey, to the more efficient Company plant at Lakewood, New Jersey. The Company
completed this process, as well as the full integration of the supply chain and
other systems, during the third quarter of 2002.

In the final quarter of 2000, the Company introduced a line extension in
the deodorizing area: ARM & HAMMER Shaker Baking Soda, and in early 2001, ARM &
HAMMER Vacuum Free Foam Carpet Deodorizer, a companion product to ARM & HAMMER
Carpet & Room Deodorizer. The latter of these introductions enabled the Company
to lead the category growth in carpet deodorizers again in 2002. In the final
quarter of 2001, the Company introduced another deodorizing line extension: ARM
& HAMMER Crystal Blend, a scoopable cat litter with silica gel crystals and
baking soda for superior deodorization.

The Company has recently announced several new consumer product
initiatives. Early in 2003, the Company launched Arrid Total Soft Solid
antiperspirants targeted primarily to women, and broadened its ARM & HAMMER
Ultramax antiperspirant line by adding a gel primarily targeted at men. To
strengthen its toothpaste franchise, the Company introduced ARM & HAMMER
Complete Care, the first ARM & HAMMER all-in-one toothpaste. In the laundry
area, the Company launched ARM & HAMMER Fresh 'N Soft Liquid Fabric Softener as
a companion product to the existing fabric softener dryer sheets. These products
should all reach broad national distribution during the second quarter. In
addition, beginning in the second quarter, the Company expects to launch Brillo
Scrub 'N Toss, a disposable cleaning pad, and the Company's first major
extension to the Brillo line. These introductions usually involve heavy
marketing costs in the year of launch, and the eventual success of these new
product and line extensions will not be known for some time.

In the Specialty Products business, competition within the two major
product categories, sodium bicarbonate and potassium carbonate, remained intense
in 2002. Sodium bicarbonate sales have been negatively impacted for several
years by a nahcolite-based sodium bicarbonate manufacturer, which has been
operating at the lower end of the business and has been making an effort to
enter the higher end. This particular competitor has recently sold its

business to another company who has entered the sodium bicarbonate business.
Furthermore, late in 2000, another major competitor, who is an affiliate of an
energy services company entered the sodium bicarbonate market using a new
nahcolite manufacturing technology process. To strengthen its competitive
position, the Company has completed the modernization of its Green River
facility to provide better availability of specialized grades, and has increased
its production capacity at Old Fort. The Company is also increasing its R & D
spending on health care, food processing and other high-end applications of
sodium bicorbonate, as well as alternative products to compete with the lower
end of the market. As for potassium carbonate, the Company expects imports of
video glass and production from foreign suppliers to affect U.S. demand in 2003
as it did in 2002.

During the year, the Company continued to pursue opportunities to build a
specialized industrial cleaning business using our aqueous-based technology. In
early 1999, the Company extended its alliance with Safety-Kleen Corp. to build a
specialty cleaning products business based on our technology and their sales and
distribution organization. The second year of this alliance was impacted by
Safety-Kleen's financial difficulties leading to a Chapter 11 filing in June of
2000, and a major reorganization implemented during the second half of that
year. While this opportunity has demonstrated more stability in 2002 and
continues to hold great promise, the outcome will not be known for some time.

Cautionary Note on Forward-Looking Statements

This annual report contains forward-looking statements relating, among
others, to short- and long-term financial objectives, sales growth, cash flow
and cost improvement programs. These statements represent the intentions, plans,
expectations and beliefs of Church & Dwight, and are subject to risks,
uncertainties and other factors, many of which are outside the Company's control
and could cause actual results to differ materially from such forward-looking
statements. The uncertainties include assumptions as to market growth and
consumer demand (including the effect of political and economic events on
consumer demand), raw material and energy prices, the financial condition of
major customers, and the Company's determination and ability to exercise its
option to acquire the remaining 50% interest in Armkel. With regard to the new
product introductions referred to in this report, there is particular
uncertainty relating to trade, competitive and consumer reactions. Other
factors, which could materially affect the results, include the outcome of
contingencies, including litigation, pending regulatory proceedings,
environmental remediation and the acquisition or divestiture of assets.

The Company undertakes no obligation to publicly update any
forward-looking statements, whether as a result of new information, future
events or otherwise. You are advised, however, to consult any further
disclosures the Company makes on related subjects in its filings with the U.S.
Securities and Exchange Commission. This discussion is provided as permitted by
the Private Securities Litigation Reform Act of 1995.

2002 2001
---- ----
COMMON STOCK PRICE RANGE AND DIVIDENDS LOW HIGH DIVIDEND LOW HIGH DIVIDEND
------ ------ ------- ------ ------ --------

1st Quarter ........................ $25.54 $31.80 $0.075 $19.56 $24.99 $ 0.07
2nd Quarter ........................ 28.05 36.50 0.075 21.73 27.00 0.07
3rd Quarter ........................ 26.43 33.50 0.075 23.54 28.44 0.075
4th Quarter ........................ 28.00 36.00 0.075 24.35 27.18 0.075
------ ------ ------ ------ ------ ------
Full Year .......................... $25.54 $36.50 $ 0.30 $19.56 $28.44 $ 0.29
====== ====== ====== ====== ====== ======

Based on composite trades reported by the New York Stock Exchange.

Approximate number of holders of Church & Dwight's Common Stock as of December
31, 2002: 10,000.

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME

YEAR ENDED DECEMBER 31,
-----------------------
(Dollars in thousands, except per share data) 2002 2001 2000
----------- ----------- -----------

NET SALES .......................................... $ 1,047,149 $ 959,707 $ 691,191
Cost of sales ...................................... 735,928 680,211 450,321
----------- ----------- -----------
GROSS PROFIT ....................................... 311,221 279,496 240,870
Marketing expenses ................................. 86,195 74,803 74,080
Selling, general and administrative expenses ....... 120,512 111,832 92,718
Plant shutdown and other items ..................... -- (660) 21,911
----------- ----------- -----------
INCOME FROM OPERATIONS ............................. 104,514 93,521 52,161
Equity in earnings (loss) of affiliates ............ 21,520 (6,195) 3,011
Investment earnings ................................ 1,793 2,224 2,032
Other income (expense) ............................. (2,618) (269) (187)
Interest expense ................................... (23,974) (11,537) (4,856)
----------- ----------- -----------
INCOME BEFORE MINORITY INTEREST AND TAXES .......... 101,235 77,744 52,161
Minority interest .................................. 143 3,889 287
----------- ----------- -----------
Income before taxes ................................ 101,092 73,855 51,874
Income taxes ....................................... 34,402 26,871 18,315
----------- ----------- -----------
NET INCOME ......................................... $ 66,690 $ 46,984 $ 33,559
=========== =========== ===========
Weighted average shares outstanding (in thousands)--
Basic ......................................... 39,630 38,879 38,321
Weighted average shares outstanding (in thousands)--
Diluted ....................................... 41,809 40,819 39,933
=========== =========== ===========
NET INCOME PER SHARE--BASIC ........................ $ 1.68 $ 1.21 $ .88
NET INCOME PER SHARE--DILUTED ...................... $ 1.60 $ 1.15 $ .84
=========== =========== ===========

See Notes to Consolidated Financial Statements.

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

DECEMBER 31,
------------
(Dollars in thousands, except share data) 2002 2001
--------- ---------

ASSETS

CURRENT ASSETS
Cash and cash equivalents ...................................... $ 76,302 $ 52,446
Accounts receivable, less allowances of $1,546 and $3,666 ...... 100,252 106,291
Inventories .................................................... 82,674 101,214
Deferred income taxes .......................................... 18,154 19,849
Note receivable and current portion of long-term note receivable 870 5,803
Prepaid expenses ............................................... 7,184 7,604
--------- ---------
TOTAL CURRENT ASSETS ........................................... 285,436 293,207
--------- ---------
PROPERTY, PLANT AND EQUIPMENT (NET) ............................ 240,007 231,449
NOTES RECEIVABLE ............................................... 9,708 11,951
EQUITY INVESTMENT IN AFFILIATES ................................ 131,959 115,121
LONG-TERM SUPPLY CONTRACTS ..................................... 6,538 7,695
TRADENAMES AND OTHER INTANGIBLES ............................... 90,036 140,873
GOODWILL ....................................................... 202,388 127,320
OTHER ASSETS ................................................... 22,169 21,469
--------- ---------
TOTAL ASSETS ................................................... $ 988,241 $ 949,085
========= =========

LIABILITIES AND STOCKHOLDERS' EQUITY

CURRENT LIABILITIES
Short-term borrowings .......................................... $ 4,490 $ 3,220
Accounts payable and accrued expenses .......................... 162,907 176,176
Current portion of long-term debt .............................. 11,455 8,360
Income taxes payable ........................................... 12,315 8,260
--------- ---------
TOTAL CURRENT LIABILITIES ...................................... 191,167 196,016
--------- ---------
LONG-TERM DEBT ................................................. 352,488 406,564
DEFERRED INCOME TAXES .......................................... 57,103 27,032
DEFERRED AND OTHER LONG-TERM LIABILITIES ....................... 24,014 19,164
NONPENSION POSTRETIREMENT AND POSTEMPLOYMENT BENEFITS .......... 15,609 15,880
MINORITY INTEREST .............................................. 214 2,126
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred Stock-$1.00 par value
Authorized 2,500,000 shares, none issued .................. -- --
Common Stock-$1.00 par value
Authorized 100,000,000 shares, issued 46,660,988 shares ... 46,661 46,661
Additional paid-in capital ..................................... 39,550 28,414
Retained earnings .............................................. 367,211 312,409
Accumulated other comprehensive (loss) ......................... (16,919) (9,728)
--------- ---------
436,503 377,756
Common stock in treasury, at cost:
6,763,554 shares in 2002 and 7,518,105 shares in 2001 ..... (88,857) (95,453)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY ..................................... 347,646 282,303
========= =========
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ..................... $ 988,241 $ 949,085
========= =========

See Notes to Consolidated Financial Statements.

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOW

YEAR ENDED DECEMBER 31,
-----------------------
(Dollars in thousands) 2002 2001 2000
--------- --------- ---------

CASH FLOW FROM OPERATING ACTIVITIES
NET INCOME ........................................................................ $ 66,690 $ 46,984 $ 33,559
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation, depletion and amortization ..................................... 27,890 27,843 23,454
Disposal and write-down of assets ............................................ 6,193 -- 15,266
(Equity) loss in earnings of affiliates ...................................... (21,520) 6,195 (3,011)
Deferred income taxes ........................................................ 17,817 7,295 (4,067)
Other ........................................................................ 2,319 93 (151)
Change in assets and liabilities: (net of effects of acquisitions and divestitures)
Decrease (increase) in accounts receivable ................................... 5,876 (25,518) (923)
Decrease (increase) in inventories ........................................... 16,771 (14,544) 17,110
(Increase) in prepaid expenses ............................................... (394) (2,161) (618)
(Decrease) increase in accounts payable ...................................... (18,982) (12,232) 20,377
Increase in income taxes payable ............................................. 10,199 5,669 291
Increase in other liabilities ................................................ 1,157 2,021 1,472
--------- --------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES ......................................... 114,016 41,645 102,759
CASH FLOW FROM INVESTING ACTIVITIES
Decrease in short-term investments ................................................ -- 2,990 1,009
Additions to property, plant and equipment ........................................ (38,739) (34,086) (21,825)
Purchase of USA Detergents common stock ........................................... -- (100,707) (10,384)
Acquisition of Biovance stock (net of cash acquired of $365) ...................... (7,756) -- --
Distributions from affiliates ..................................................... 4,670 6,350 4,132
Investment in affiliates, net of cash acquired .................................... (2,731) (108,250) (360)
Purchase of other assets .......................................................... -- (2,568) (2,321)
Proceeds from notes receivable .................................................... 5,803 3,087 3,000
Proceeds from sale of fixed assets ................................................ 1,460 2,530 --
Purchase of new product lines ..................................................... -- (129,105) --
Investment in notes receivable .................................................... -- (16,380) --
Other ............................................................................. (1,077) (1,019) (442)
--------- --------- ---------
NET CASH USED IN INVESTING ACTIVITIES ............................................. (38,370) (377,158) (27,191)
CASH FLOW FROM FINANCING ACTIVITIES
Proceeds (repayments) from short-term borrowing ................................... 2,457 (10,792) (12,166)
(Repayments) of long-term borrowings .............................................. (52,751) (171,114) (37,831)
Proceeds from stock options exercised ............................................. 10,868 9,168 7,465
Purchase of treasury stock ........................................................ -- -- (20,484)
Payment of cash dividends ......................................................... (11,888) (11,275) (10,744)
Deferred financing costs .......................................................... (476) (9,601) --
Proceeds from long-term borrowing ................................................. -- 560,000 --
--------- --------- ---------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES ............................... (51,790) 366,386 (73,760)
NET CHANGE IN CASH AND CASH EQUIVALENTS ........................................... 23,856 30,873 1,808
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR .................................... 52,446 21,573 19,765
--------- --------- ---------
CASH AND CASH EQUIVALENTS AT END OF YEAR .......................................... $ 76,302 $ 52,446 $ 21,573
========= ========= ---------
Cash paid during the year for:
Interest (net of amounts capitalized) ........................................ $ 23,362 $ 9,948 $ 4,838
Income taxes ................................................................. 4,421 15,292 22,404

Acquisitions in which liabilities were assumed are as follows:
Fair value of assets .............................................................. $ 14,889 $ 293,402 $ --
Cash paid for stock and product lines ............................................. (8,121) (229,812) --
--------- --------- ---------
Liabilities assumed ............................................................... $ 6,768 $ 63,590 $ --
========= ========= =========

See Notes to Consolidated Financial Statements.

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 2002, 2001, AND 2000

Number of Share Amounts
--------------------------------- ------------------------

Additional
Common Treasury Common Treasury Paid-In
Stock Stock Stock Stock Capital
--------- -------- --------- --------- ---------

(In thousands)
JANUARY 1, 2000 ........................ 46,661 (7,805) $ 46,661 $ (87,021) $ 18,356
Net Income ............................. -- -- -- -- --
Translation adjustments ................ -- -- -- -- --
Available for sale securities,
net of taxes of $1,923 .............. -- -- -- -- --

Comprehensive Income ...................

Cash dividends ......................... -- -- -- -- --
Stock option plan transactions including
related income tax benefit of $2,245 -- 702 -- 5,629 4,081
Purchase of treasury stock ............. -- (1,185) -- (20,484) --
Other stock issuances .................. -- 5 -- 40 77
Repayment of shareholder loan .......... -- -- -- -- --
------ ------ --------- --------- ---------
DECEMBER 31, 2000 ...................... 46,661 (8,283) 46,661 (101,836) 22,514
Net Income ............................. -- -- -- -- --
Translation adjustments ................ -- -- -- -- --
Available for sale securities,
net of taxes of $1,923 .............. -- -- -- -- --
Interest rate swap agreements,
net of taxes of $823 ................ -- -- -- -- --

Comprehensive Income ...................

Cash dividends ......................... -- -- -- -- --
Stock option plan transactions including
related income tax benefit of $2,913 -- 757 -- 6,311 5,769
Other stock issuances .................. -- 8 -- 72 131
------ ------ --------- --------- ---------
DECEMBER 31, 2001 ...................... 46,661 (7,518) 46,661 (95,453) 28,414
NET INCOME ............................. -- -- -- -- --
TRANSLATION ADJUSTMENTS ................ -- -- -- -- --
MINIMUM PENSION LIABILITY,
NET OF TAXES OF $1,497 .............. -- -- -- -- --
INTEREST RATE SWAP AGREEMENTS,
NET OF TAXES OF $645 ................ -- -- -- -- --

COMPREHENSIVE INCOME

COMPENSATION EXPENSE
RELATING TO STOCK OPTIONS ........... -- -- -- -- 804
CASH DIVIDENDS ......................... -- -- -- -- --
STOCK OPTION PLAN TRANSACTIONS INCLUDING
RELATED INCOME TAX BENEFIT OF $5,923 -- 750 -- 6,556 10,235
OTHER STOCK ISSUANCES .................. -- 4 -- 40 97
------ ------ --------- --------- ---------
DECEMBER 31, 2002 ...................... 46,661 (6,764) $ 46,661 $ (88,857) $ 39,550
====== ====== ========= ========= =========

Amounts
---------------------------------------------------
Accumulated
Other Due
Retained Comprehensive From Comprehensive
Earnings Income (Loss) Shareholder Income
--------- ------------ ----------- ---------

(In thousands)
JANUARY 1, 2000 ........................ $ 253,885 $ (4,599) $ (549)
Net Income ............................. 33,559 -- -- $ 33,559
Translation adjustments ................ -- (1,599) -- (1,599)
Available for sale securities,
net of taxes of $1,923 .............. -- (3,191) -- (3,191)
--------
Comprehensive Income ................... 28,769
========
Cash dividends ......................... (10,744) -- --
Stock option plan transactions including
related income tax benefit of $2,245 -- -- --
Purchase of treasury stock ............. -- -- --
Other stock issuances .................. -- -- --
Repayment of shareholder loan .......... -- -- 549
--------- --------- ---------
DECEMBER 31, 2000 ...................... 276,700 (9,389) 0
Net Income ............................. 46,984 -- -- 46,984
Translation adjustments ................ -- (2,163) -- (2,163)
Available for sale securities,
net of taxes of $1,923 .............. -- 3,191 -- 3,191
Interest rate swap agreements,
net of taxes of $823 ................ -- (1,367) (1,367)
--------
Comprehensive Income ................... 46,645
========
Cash dividends ......................... (11,275) -- --
Stock option plan transactions including
related income tax benefit of $2,913 -- -- --
Other stock issuances .................. -- -- --
--------- --------- ---------
DECEMBER 31, 2001 ...................... 312,409 (9,728) 0
NET INCOME ............................. 66,690 -- -- 66,690
TRANSLATION ADJUSTMENTS ................ -- (3,732) -- (3,732)
MINIMUM PENSION LIABILITY,
NET OF TAXES OF $1,497 .............. -- (2,417) -- (2,417)
INTEREST RATE SWAP AGREEMENTS,
NET OF TAXES OF $645 ................ -- (1,042) (1,042)
--------
COMPREHENSIVE INCOME $ 59,499
========
COMPENSATION EXPENSE
RELATING TO STOCK OPTIONS ........... -- -- --
CASH DIVIDENDS ......................... (11,888) -- --
STOCK OPTION PLAN TRANSACTIONS INCLUDING
RELATED INCOME TAX BENEFIT OF $5,923 -- -- --
OTHER STOCK ISSUANCES .................. -- -- --
--------- --------- ---------
DECEMBER 31, 2002 ...................... $ 367,211 $ (16,919) $ 0
========= ========= =========

See Notes to Consolidated Financial Statements.

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. ACCOUNTING POLICIES

Business

The Company develops, manufactures and markets a broad range of consumer
and specialty products. It sells its products, primarily under the ARM & HAMMER
trademark, to consumers through supermarkets, drug stores and mass
merchandisers; and to industrial customers and distributors. In 2002, Consumer
Products represented approximately 83% and Specialty Products 17% of the
Company's net sales. The Company does approximately 92% of its business in the
United States.

Basis of Presentation

The accompanying consolidated financial statements include the accounts of
the Company and its majority-owned subsidiaries. The Company's 50% interest in
its Armand Products Company joint venture, the ArmaKleen Company joint venture
and Armkel LLC have been accounted for under the equity method of accounting.
During 2002, the Company increased its ownership of QGN, its Brazilian
subsidiary from 85% to approximately 99%. The Brazilian subsidiary has been
consolidated since May 1999 and was previously accounted for under the equity
method. All material intercompany transactions and profits have been eliminated
in consolidation. The Consolidated Financial Statements are presented in
accordance with accounting principles generally accepted in the United State of
America.

Use of Estimates

The preparation of financial statements, in conformity with generally
accepted accounting principles, requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent gains and losses at the date of the financial
statements and reported amounts of revenue and expenses during the reporting
period. Management makes estimates regarding inventory valuation, promotional
and sales returns reserves, the carrying amount of goodwill and other intangible
assets, the realization of deferred tax assets, tax reserves, liabilities
related to pensions and other postretirement benefit obligations and other
matters that affect the reported amounts and other disclosures in the financial
statements. Estimates by their nature are based on judgement and available
information. Therefore, actual results could differ materially from those
estimates, and it is possible such changes could occur in the near term.

Revenue Recognition

Revenue is recognized when the earning process is complete and the risks
and rewards of ownership have transferred to the customer, which is considered
to have occurred upon shipment of the finished product. The Company accounts for
shipping and handling costs as a component of cost of sales. Amounts invoiced to
customers are included in determining net sales.

Promotional and Sales Returns Reserves

The reserves for consumer and trade promotion liabilities, and sales
returns are established based on the Company's best estimate of the amounts
necessary to settle future and existing claims on products sold as of the
balance sheet date. The Company uses historical trend experience and coupon
redemption provider input in arriving at coupon reserve requirements, and
forecasted appropriations, customer and sales organization inputs, and
historical trend analysis in arriving at the reserves required for other
promotional reserves and sales returns. While the Company believes that
promotional reserves are adequate and that the judgement applied is appropriate,
such amounts estimated to be due and payable could differ materially from what
will actually transpire in the future.

Impairment of Long-lived Assets

Long-lived assets are reviewed for impairment whenever events or changes
in circumstances indicate that the carrying amount of the asset may not be
recoverable. In such situations, long-lived assets are considered impaired when
estimated future cash flows (undiscounted and without interest charges)
resulting from the use of the asset and its eventual disposition are less than
the asset's carrying amount. While we believe that our estimates of future cash
flows are reasonable, different assumptions regarding such cash flows could
materially affect our evaluations. When an impairment is indicated, the
estimated future cash flows are then discounted to determine the estimated fair
value of the asset and an impairment charge is recorded for the difference
between the carrying value and the net present value of estimated future cash
flows.

Foreign Currency Translation

Financial statements of foreign subsidiaries are translated into U.S.
dollars in accordance with SFAS No. 52. Gains and losses are recorded in Other
Comprehensive Income. Gains and losses on foreign currency transactions were
recorded in the Consolidated Statement of Income and were not material.

Cash Equivalents

Cash equivalents consist of highly liquid short-term investments, which
mature within three months of purchase.

Inventories

Inventories are valued at the lower of cost or market. Approximately 57%
and 50% of the inventory at December 31, 2002 and 2001, respectively, determined
cost using the last-in, first-out (LIFO) method. The remaining inventory
determined cost using the first-in, first-out (FIFO) method. When appropriate,
the Company provides allowances to adjust the carrying value of its inventory to
the lower of cost or market (net realizable value), including any costs to sell
or dispose. The Company identifies any slow moving, obsolete or excess inventory
to determine whether a valuation allowance is indicated. The determination of
whether inventory items are slow moving, obsolete or in excess of needs requires
estimates and assumptions about the future demand for the Company's products,
technological changes, and new product introductions. The estimates as to the
future demand used in the valuation of inventory are dependent on the ongoing
success of its products. In addition, the Company's allowance for obsolescence
may be impacted by the rationalization of the number of stock keeping units. To
minimize this risk, the Company evaluates its inventory levels and expected
usage on a periodic basis and records adjustments as required. Reserves for
inventory obsolescence were $5.3 million at December 31, 2002, and $6.7 million
at December 31, 2001.

Property, Plant and Equipment

Property, plant and equipment and additions thereto are stated at cost.
Depreciation and amortization are provided by the straight-line method over the
estimated useful lives of the respective assets.

Software

The Company accounts for software in accordance with Statement of Position
(SOP) 98-1 "Accounting for the Costs of Computer Software Developed or Obtained
for Internal Use." The SOP requires companies to capitalize certain costs of
developing computer software. Amortization is provided by the straight-line
method over the estimated useful lives of the software.

Long-Term Supply Contracts

Long-term supply contracts represent advance payments under multi-year
contracts with suppliers of raw materials and finished goods inventory. Such
advance payments are applied over the lives of the contracts using the
straight-line method.

Derivatives

All derivatives are recognized as assets or liabilities at fair value in
the accompanying Consolidated Balance Sheets.

Derivatives designated as hedges are either (1) a hedge of the fair value
of a recognized asset or liability ("fair value" hedge), or (2) a hedge of the
variability of cash flows to be received or paid related to a recognized asset
or liability ("cash flow" hedge).

- Changes in the fair value of derivatives that are designated and
qualify as fair value hedges, along with the gain or loss on the
hedged asset or liability that is attributable to the hedged risk,
are recorded in current period earnings.

- Changes in the fair value of derivatives that are designated and
qualify as cash flow hedges are recorded in Other Comprehensive Loss
until earnings are affected by the variability of cash flows of the
hedged asset or liability. Any ineffectiveness related to these
hedges are recorded directly in earnings. The amount of the
ineffectiveness was not material.

- Changes in the fair value of derivatives not designated or
qualifying as an accounting hedge are recorded directly to earnings.

Goodwill and Other Intangible Assets

The Company accounts for Goodwill and Other Intangible Assets in
accordance with SFAS No. 142. SFAS No. 142 prohibits the amortization of
goodwill and intangible assets with indefinite useful lives. SFAS No. 142
requires these assets be reviewed for impairment at least annually. Intangible
assets with finite lives will continue to be amortized over their estimated
useful lives using the straight-line method. Indefinite lived assets acquired
prior to June 30, 2001 were amortized through December 31, 2001. This would
include the Brillo and related brand acquisition, the investment in QGN, the
bathroom cleaner product lines and the USAD acquisition. Indefinite lived assets
acquired as part of the anti-perspirant and pet care acquisition was not
amortized based upon the provisions of SFAS No. 142.

Selected Operating Expenses

Research & development costs in the amount of $26,877,000 in 2002,
$21,803,000 in 2001 and $19,363,000 in 2000, and marketing costs in the amount
of $86,195,000 in 2002, $74,803,000 in 2001 and $74,080,000 in 2000, were
charged to operations as incurred.

Earnings Per Share

Basic EPS is calculated based on income available to common shareholders
and the weighted-average number of shares outstanding during the reported
period. Diluted EPS includes additional dilution from potential common stock
issuable pursuant to the exercise of stock options outstanding. Antidilutive
stock options, in the amounts of 606,730, 129,000 and 547,000 for 2002, 2001 and
2000, have been excluded.

The following table reflects the components of common shares outstanding
for each of the three years ended December 31, 2002 in accordance with SFAS No.
128:

2002 2001 2000
---- ---- ----

Weighted average common shares outstanding - basic ... 39,630 38,879 38,321
Dilutive effect of stock options ..................... 2,179 1,940 1,612
------ ------ ------
Equivalent average common shares outstanding - diluted 41,809 40,819 39,933

Stock Based Compensation

The Company accounts for costs of stock-based compensation in accordance
with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees," rather than the fair-value based method in Statement of Financial
Accounting Standards No. 123 (SFAS 123), "Accounting for Stock-Based
Compensation." The Company recognized compensation expense (net of tax) of
approximately $497,000 in 2002, and $0 in 2001 and 2000, respectively, in
accordance with APB 25. Had compensation cost been determined based on the fair
values of the stock options at the date of grant in accordance with SFAS 123,
the Company would have recognized compensation expense, net of taxes, of
$4,480,000, $2,670,000 and $2,577,000 for 2002, 2001 and 2000,

respectively. The Company's pro forma net income and pro forma net income per
share for 2002, 2001 and 2000 would have been as follows:

(In thousands, except for per share data) 2002 2001 2000
---------- ---------- ----------

NET INCOME
As reported ............................... $ 66,690 $ 46,984 $ 33,559
Pro forma ................................. 62,707 44,314 30,982
NET INCOME PER SHARE: BASIC
As reported ............................... $ 1.68 $ 1.21 $ 0.88
Pro forma ................................. 1.58 1.14 0.81
NET INCOME PER SHARE: DILUTED
As reported ............................... $ 1.60 $ 1.15 $ 0.84
Pro forma ................................. 1.51 1.09 0.78

Comprehensive Income

Comprehensive income consists of net income, available for sale
securities, foreign currency translation adjustments, changes in the fair value
of certain derivative financial instruments designated and qualifying as cash
flow hedges, and minimum pension liability adjustments, and is presented in the
Consolidated Statements of Changes in Stockholders' Equity and in note 13.

Income Taxes

The Company recognizes deferred income taxes under the liability method;
accordingly, deferred income taxes are provided to reflect the future
consequences of differences between the tax bases of assets and liabilities and
their reported amounts in the financial statements. Management provides
valuation allowances against the deferred tax asset for amounts which are not
considered "more likely than not" to be realized.

Recent Accounting Pronouncements

Reclassification

Certain prior year amounts have been reclassified in order to conform with
the current year presentation.

2. FAIR VALUE OF FINANCIAL INSTRUMENTS AND RISK MANAGEMENT

The following table presents the carrying amounts and estimated fair
values of the Company's financial instruments at December 31, 2002 and 2001.
Financial Accounting Standards No. 107, "Disclosures About Fair Value of
Financial Instruments," defines the fair value of a financial instrument as the
amount at which the instrument could be exchanged in a current transaction
between willing parties.

2002 2001
---- ----

CARRYING FAIR CARRYING FAIR
(In thousands) AMOUNT VALUE AMOUNT VALUE
-------- -------- -------- --------

Financial Assets:
Note receivable and current portion of note receivable $ 870 $ 870 $ 5,803 $ 5,803
Long-term notes receivable ........................... 9,708 9,375 11,951 11,789
Financial Liabilities:
Short-term borrowings ................................ 4,490 4,490 3,220 3,220
Current portion of long-term debt .................... 11,455 11,455 8,360 8,360
Long-term debt ....................................... 352,488 352,488 406,564 406,564
Interest rate swap contracts ......................... 3,899 3,899 2,192 2,192

The following methods and assumptions were used to estimate the fair value
of each class of financial instruments reflected in the Consolidated Balance
Sheets:

Notes Receivable

The cost of notes receivable are initially recorded at their face value
and are then discounted using an interest factor management believes appropriate
for the credit risk involved at the date of acquisition. The market value of the
notes receivable reflects what management believes is the appropriate interest
factor at December 31, 2002, based on similar risks in the market.

Short-term Borrowings

The amounts of unsecured lines of credit equal fair value because of short
maturities and variable interest rates.

Long-term Debt and Current Portion of Long-term Debt

The Company estimates that based upon the Company's financial position and
the variable interest rate, the carrying value approximates fair value.

Interest Rate Swap Contracts

The fair values are estimated amounts the Company would receive or pay to
terminate the agreements at the balance sheet date, taking into account current
interest rates.

Foreign Currency

The Company is subject to exposure from fluctuations in foreign currency
exchange rates, primarily U.S. Dollar/British Pound, U.S. Dollar/Japanese Yen,
U.S. Dollar/Canadian Dollar and U.S. Dollar/Brazilian Real. The Company, from
time to time, enters into forward exchange contracts to hedge anticipated but
not yet committed sales denominated in the Canadian dollar, the British pound
and the Japanese Yen. The terms of these contracts are for periods of under 12
months. The purpose of the Company's foreign currency hedging activities is to
protect the Company from the risk that the eventual dollar net cash inflows from
the sale of products to foreign customers will be adversely affected by changes
in exchange rates. The Company did not have any forward exchange contracts
outstanding at December 31, 2002 and December 31, 2001.

The Company is also subject to translation exposure of the Company's
foreign subsidiary's financial statements.

Interest Rate Risk

The Company's primary domestic borrowing facility is made up of a $ 510
million credit agreement of which $358.5 million remained outstanding as of
December 31, 2002; and $100 million of a revolving credit agreement all of which
was un-drawn at December 31, 2002. The weighted average interest rate on these
borrowings at December 31, 2002, excluding deferred financing costs and
commitment fees, was approximately 5.1% including hedges. The Company entered
into interest rate swap agreements to reduce the impact of interest rate
flucuations on this debt, as required by the credit agreement. The swap
agreements are contracts to exchange floating rate for fixed interest rate
payments periodically over the life of the agreements without the exchange of
the underlying notional amounts. As of December 31, 2002, the Company entered
into agreements for a notional amount of $235 million, swapping debt with a one-
month LIBOR rate for a fixed rate that averages 5.8 %. As a result, the swap
agreements eliminate the variability of interest expense for that portion of the
Company's debt. The Company recognized expense of approximately $4.3 million in
2002 and $1.3 million in 2001 as a result of the swap agreements and will
recognize $3.9 million of expense in 2003.

The Company's domestic operations and its Brazilian subsidiary have short
and long term debts that are floating rate obligations.

Equity Derivatives

The Company has entered into equity derivative contracts on its own stock
in order to minimize the impact on earnings resulting from fluctuations in
market price of shares in the Company's deferred compensation plan. These
contracts in the amount of 165,000 shares hedge approximately 50% of the shares
in the plan and are marked to market through earnings at December 31, 2002. The
Company recognized income of approximately $.4 million in 2002, and expense of
$.5 million in 2001.

3. INVENTORIES

Inventories are summarized as follows:

(In thousands) 2002 2001
-------- --------

Raw materials and supplies ......... $ 30,987 $ 28,869
Work in process .................... 142 651
Finished goods ..................... 51,545 71,694
-------- --------
$ 82,674 $101,214
======== ========

Inventories valued on the LIFO method totaled $47,452,000 and $49,944,000
at December 31, 2002 and 2001, respectively, and would have been approximately
$3,073,000 and $2,759,000 higher, respectively, had they been valued using the
first-in, first-out (FIFO) method.

4. PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment consist of the following:

ESTIMATED LIVES
(In thousands) 2002 2001 (YEARS)
-------- -------- ---------------

Land .................................................... $ 6,079 $ 6,503 N/A
Buildings and improvements .............................. 105,469 92,577 15-40
Machinery and equipment ................................. 267,568 253,749 5-20
Office equipment and other assets ....................... 30,556 25,037 3-10
Software ................................................ 5,945 5,652 5
Mineral rights .......................................... 467 257 based on volume
Construction in progress ................................ 9,920 17,593 N/A
-------- --------
426,004 401,368
Less accumulated depreciation, depletion and amortization 185,997 169,919
-------- --------
Net property, plant and equipment ....................... $240,007 $231,449
======== ========

Depreciation, depletion and amortization of property, plant and equipment
amounted to $22,178,000, $18,968,000 and $18,469,000 in 2002, 2001 and 2000,
respectively. Interest charges in the amount of $603,000, $432,000 and $284,000
were capitalized in connection with construction projects in 2002, 2001 and
2000, respectively.

During the year, the Company wrote-down the value of one of its plants by
approximately $2.1 million, as a result of a reduction of sales volume, which is
included in Cost of Sales in the Company's Consolidated Statement of Income. The
write-down was determined using discounted cash flows. Both the charge and the
remaining carrying value is included in the Consumer segment.

Also during the fourth quarter, the Company sold its Lambert Kay Hardware,
Winsted, Connecticut manufacturing facility for a price that approximates book
value. This facility was acquired as part of the Arrid and Lambert Kay purchase
from Carter-Wallace. It was sold as part of the Company's decision in 2001 to
discontinue the hardware portion of the product line.

5. ACQUISITIONS

a. In 1997, the Company acquired a 40% interest in QGN. The investment,
costing approximately $10.4 million, was financed internally and included
goodwill of approximately $3.3 million. The Company exercised its option
to increase its interest to 75% during the second quarter of 1999. The
additional 35% ownership cost approximately $9.1 million and included
goodwill of approximately $4.8 million. During 2001, the Company increased
its ownership position to approximately 85% at a cost of $2.6 million of
which $1.7 million was allocated to Goodwill. During 2002, the Company
increased its ownership to approximately 99% at a cost of $4.3 million, of
which $2.7 million was allocated to Goodwill. Pro forma comparative
results of operations are not presented because they are not materially
different from the Company's reported results of operations.

b. USAD Acquisition and Non-Core Business Divestiture

On May 25, 2001, the Company and USA Detergents, Inc. ("USAD")
closed on its previously announced merger agreement under which the
Company acquired USAD, its partner in the previously announced ARMUS LLC
joint venture, for $7 per share in an all-cash transaction. The
acquisition is accounted for under the purchase method. Results of
operations are included in the accompanying financial statements from May
25, 2001.

The Company and USAD formed the ARMUS joint venture to combine their
laundry products businesses in June 2000. Under its terms, the Company had
management control of the venture and an option to buy USAD's interest in
five years.

The venture became operational on January 1, 2001, and was dissolved
when the Company purchased USAD outright.

As part of the ARMUS venture, the Company had already acquired 2.1
million shares or 15% of USAD's stock for $15 million or $7 a share. The
acquisition agreement extended the same offer price to USAD's remaining
stockholders. The Company estimates the total transaction cost, including
the assumption of debt, and the initial stock purchase, was approximately
$125 million after disposal of unwanted assets. The Company financed the
acquisition with a short term bridge loan, which subsequently was
refinanced as part of the Carter-Wallace acquisition.

The Company divested USAD's non-laundry business, which accounted
for less than 20% of USAD's sales in 2000, and other non-core assets to
former USAD executives.

The following table summarizes the fair values of the assets
acquired and liabilities assumed at the date of acquisition:

(in thousands)

Current assets ....................... $ 14,839
Property, plant and equipment ........ 46,591
Tradenames ........................... 29,930
Goodwill ............................. 82,746
Other long-term assets ............... 2,257
---------
Total assets acquired ................ 176,363
Current liabilities .................. (53,160)
Long-term debt ....................... (5,425)
Other long-term liabilities .......... (6,901)
---------
Net assets acquired .................. $ 110,877
=========

The Goodwill and tradenames were amortized until December 31, 2001,
using the straight-line method over 30 years.

As noted, the Company divested USAD's non-laundry business and other
non-core assets to former USAD executives concurrent with the merger
agreement. The Company has approximately 16% ownership interest in the
newly formed company and contributed $400,000. The new company, USA Metro,
Inc. (USAM), purchased inventory and other assets for a total of
$5,087,000, in the form of two notes receivable. The inventory note of
$3,087,000 was secured by a lien on the inventory. The note was due on
December 31, 2001 and bore interest at 8% for the first ninety days and
10% thereafter and was paid. The note for all the other assets of
$2,000,000 has a maturity of five years and bear interest at 8% for the
first two years, 9% for the third year, 10% for the fourth year and 11%
for the fifth year and is carried at approximately $1,400,000 using an
effective interest rate of 17%.

The agreement specifies that interest only payments for the first
two years may be deferred at the option of the debtor. Commencing with the
start of the third year the principal and accrued interest shall be paid
monthly based upon a five-year amortization. The unpaid principal and
accrued interest as of the maturity date shall be payable in a lump sum on
May 24,2006. In the event the unpaid principal and interest is not paid as
of the maturity date, the interest rate shall increase by 300 basis
points. In the case of default by USAM that is not remedied as provided in
the note, the Company may convert the note to additional ownership in
USAM.

In addition to the aforementioned investment in USAM and the note
receivable, the Company has a trade receivable balance with USAM of
approximately $3.1 million at December 31, 2002.

During 2002, the Company sold $23.2 million of laundry and cleaning
products to USAM. Furthermore, the Company billed USAM $.5 million and
USAM billed the Company $.2 million for leased space.

c. Carter-Wallace Acquisition

On September 28, 2001, the Company acquired the consumer products
business of Carter-Wallace, Inc. in a partnership with the private equity
group, Kelso & Company, for a total negotiated price of approximately $746
million, including the assumption of certain debt plus transaction costs.
Under the terms of its agreements with Carter-Wallace and Kelso, the
Company acquired Carter-Wallace's U.S. anti-perspirant and pet care
businesses outright for a negotiated price of approximately $129 million;
and Armkel, LLC, a 50/50 joint venture between the Company and Kelso,
acquired the rest of Carter-Wallace's domestic and international consumer
products business for a negotiated price of approximately $617 million.
The Company accounts for its interest in Armkel on the equity method. (See
note 6)

The Company made the acquisition to increase its personal care
product lines and to improve the cost structure of these and existing
products.

The following table summarizes the fair values of the assets
acquired and liabilities assumed (related to the anti-perspirant and pet
care businesses acquired directly by the Company) at the date of
acquisition:

(in thousands)

Current assets ....................... $ 41,587
Property, plant and equipment ........ 3,020
Tradenames ........................... 29,702
Goodwill ............................. 65,058
---------
Total assets acquired ................ 139,367
Current liabilities .................. (9,349)
---------
Net assets acquired .................. $ 130,018
=========

The results of operations are included in the accompanying financial
statements from September 28, 2001.

The purchase price allocation is based upon an independent
appraisal. Goodwill and tradenames are not being amortized, based on the
provisions of SFAS 142 "Goodwill and Other Intangible Assets." All the
Goodwill is deductible for tax purposes and is included in the consumer
products segment.

d. Pro forma results - unaudited

The following pro forma 2001 and 2000 income statements reflect the
impact as though the Company purchased USAD, its share of Armkel and the
anti-perspirant and pet care businesses as of the beginning of the period
indicated. Pro forma adjustments include the elimination of intercompany
sales, inventory set-up adjustments, additional interest expense,
depreciation and amortization charges and the related income tax impact.

(Dollars in thousands, except per share data) 2001 2000
----------------------- ----------------------
HISTORICAL PRO FORMA HISTORICAL PRO FORMA
CHD RESULTS CHD RESULTS
--------- --------- --------- ---------

Net Sales ............................................ $959.7 $1,054.7 $691.2 $1,023.6
Income from Operations................................ 93.5 82.8 52.2 51.1
Equity Income ........................................ (6.2) 12.2 3.0 9.8
Net Income ........................................... 47.0 43.5 33.6 21.2
EPS - Basic .......................................... $1.21 $1.12 $0.88 $0.55
EPS - Diluted ........................................ $1.15 $1.07 $0.84 $0.53

e. Early in 2002, the Company acquired Biovance Technologies, Inc., a
small Oskaloosa, Iowa-based producer of specialty feed ingredients, which
complement our existing range of animal nutrition products. The purchase
price paid in 2002 was approximately $7.8 million (net of cash acquired)
and included the assumption of debt. An additional payment of $3.4 million
was made in February 2003 based upon 2002 operating performance and was
charged to goodwill in the accompanying balance sheet. An additional
payment will be required based on 2003 operating performance which cannot
exceed $8.6 million. Pro forma comparative results of operations are not
presented because they are not materially different from the Company's
reported results of operations. Results of operations are included in the
accompanying financial statements from January 1, 2002, the date of the
acquisition.

6. ARMKEL EQUITY INVESTMENT

The following table summarizes financial information for Armkel LLC. Late
in 2002, Armkel entered into an agreement to sell its Italian subsidiary to a
group, comprising local management and private equity investors, for a price of
approximately $22 million. Armkel accounted for the subsidiary as a discontinued
operation. The 2001 results and balance sheet have reclassifications to reflect
this. Armkel closed on the sale at the end of February. The Company accounts for
its 50% interest under the equity method.

(in thousands) 12 MONTHS 3 MONTHS
ENDED ENDED
Income statement data: DEC. 31, 2002 DEC. 31, 2001
------------- -------------

Net sales ..................................... $383,782 $ 77,561
Gross profit .................................. 210,833 27,115
Net income (loss) ............................. 31,214 (15,648)
Equity in affiliate (loss) .................... 18,107 (10,009)

DECEMBER 31,
------------
Balance sheet data: 2002 2001
---- ----

Current assets ................................ $246,307 271,583
Noncurrent assets ............................. 562,207 540,152
Short-term debt ............................... 28,556 3,602
Current liabilities (excluding short-term debt) 110,224 140,568
Long-term debt ................................ 411,634 439,750
Other long-term liabilities ................... 28,420 24,229
Partners' equity .............................. 229,680 203,586

The venture's Board has equal representation from the Company and Kelso.

The Armkel venture was financed with $229 million in equity contributions
from the Company and Kelso and an additional $445 million in debt. Armkel
entered into a syndicated bank credit facility and also issued senior
subordinated notes to finance its investment in the acquisition of
Carter-Wallace. The long-term $305 credit facility consists of $220 million in 6
and 7-year term loans, all of which were drawn at closing and an $85 million
revolving credit facility, which remained fully undrawn at December 31, 2002.
Armkel issued $225 million of 9.5% senior debt notes due in eight years with
interest paid semi-annually, therefore, Armkel had $443 million of total debt
utilized as of December 31, 2002 after $2 million of repayments in 2002. The
weighted average interest rate on the credit facility borrowings at December 31,
2002, excluding deferred financing costs and commitment fees, was approximately
5.0% including hedges. Any debt on Armkel's balance sheet is without recourse to
the Company.

Under the partnership agreement with Kelso, the Company is allocated 50%
of all book and tax profits. If there are losses, the Company is allocated 50%
of all book and tax losses up to $10 million and 100% of such losses above that
level for the period starting September 29, 2001, the date of the acquisition.
As a result, the Company recorded a loss of approximately $10.0 million on its
investment in Armkel in 2001. In 2002, the Company was allocated the first $5
million of Armkel's net income to offset the additional loss it was allocated in
2001. Net income after the first $5 million was allocated 50% to the Company.

Substantial synergies have been achieved by combining certain of its
operations with those of Armkel, particularly in the areas of sales,
manufacturing and distribution, and most service functions. Armkel retained its
core marketing, research & development, and financial planning capabilities, and
continues to manufacture condoms, but purchases virtually all the support
services it requires for its U.S. domestic business from the Company under a
management services agreement, which has a term of five years with possible
renewal. As a first step, the Company merged the two sales organizations during
the fourth quarter of 2001. In early 2002, the Company transferred production of
antiperspirants and depilatories from the former Carter-Wallace plant at
Cranbury, NJ, to the Company's plant at Lakewood, NJ, which is a more efficient
producer of antiperspirants and other personal care products. During early 2002,
the Company completed the integration of the planning and purchasing, accounting
and management information systems, and other service functions.

During 2002, the Company invoiced Armkel $22.5 million for primarily
administrative and management oversight services (which is included as a
reduction of selling, general and administrative expenses), and purchased $7.1
million of deodorant antiperspirant inventory produced by Armkel at its cost.
The Company sold Armkel $1.4 million of ARM & HAMMER products to be sold in
international markets. Armkel invoiced the Company $1.7 million of transition
administrative services. The Company has an open receivable from Armkel at
December 31, 2002 of approximately $4.8 million that primarily related to
administrative services, partially offset by amounts owed for inventory.

Under the terms of its joint venture agreement with Kelso, the Company has
a call option to acquire Kelso's interest in Armkel in three to five years after
the closing, at fair market value as defined in the joint venture agreement
subject to a floor and cap. If the Company does not exercise its call option,
then Kelso may request the Company to purchase its interest. If the Company
elects not to purchase Kelso's interest, then Kelso's and the Company's equity
in the joint venture may be offered to a third party. If a third party sale
should occur, depending on the proceeds received, the Company may be required to
make a payment to Kelso up to an amount of approximately $112 million. Kelso
also may elect to have the Company purchase its interest for $112 million. This
amount is not payable until the eighth year from the formation of the venture.
Finally, Kelso may require the

Company to purchase its interest upon a change in control of the Company as
defined in the joint venture agreement.

Simultaneous with this transaction, Carter-Wallace and its pharmaceutical
business merged into a newly formed company set up by pharmaceutical industry
executives and backed by two well-known private equity firms. While the Company
and Armkel are not affiliated with the pharmaceutical venture, Armkel had agreed
to provide certain transitional services to help this venture with the start-up
of its operations at Carter-Wallace's main Cranbury, New Jersey, facility. This
was completed by the end of 2002.

7. GOODWILL AND OTHER INTANGIBLES

In July 2001, the FASB issued SFAS No. 142, "Goodwill and Other Intangible
Assets," which supersedes APB Opinion No. 17, "Intangible Assets." Under its
changes, SFAS No. 142 establishes new standards for goodwill acquired in a
business combination and eliminates amortization of goodwill and instead sets
forth methods to periodically evaluate goodwill for impairment. The Company
adopted this statement upon its effective date.

The following tables discloses the carrying value of all intangible
assets:

(In thousands) DECEMBER 31, 2002 December 31, 2001
----------------- -----------------
GROSS Gross Amort.
CARRYING IMPAIRMENT ACCUM. Carrying Accum. Period
AMOUNT CHARGE AMORT. NET Amount Amort. Net (years)
------- ------- ------- ------- -------- ------- ------- -------

Amortized intangible assets:
Tradenames ........................... $39,160 $(2,190) $(5,182) $31,788 $ 31,400 $(3,271) $28,129 10-20
Formulas ............................. 6,281 -- (866) 5,415 4,241 (302) 3,939 10-20
Non Compete
Agreement ......................... 1,143 -- (117) 1,026 -- -- -- 10
------- ------- ------- ------- -------- ------- -------
Total ................................ $46,584 $(2,190) $(6,165) $38,229 $ 35,641 $(3,573) $32,068
======= ======= ======= ======= ======== ======= =======
Unamortized intangible assets - Carrying value
Tradenames ........................... $51,807 $108,805
------- --------
Total ................................ $51,807 $108,805
======= ========

Intangible amortization expense amounted to $2.6 million in 2002 and 2001.
The estimated intangible amortization for each of the next five years is
approximately $2.9 million.

The changes in the carrying amount of goodwill for the year ended December
31, 2002 is as follows:

(In thousands) CONSUMER SPECIALTY TOTAL
-------- -------- ---------

Balance December 31, 2001 ................. $116,372 $ 10,948 $ 127,320
Purchase accounting adjustments ........... 66,124 1,916 68,040
Goodwill acquired during 2002 ............. -- 7,879 7,879
Pre-acquisition NOL's recognized .......... -- (643) (643)
Foreign exchange/other .................... 2 (210) (208)
-------- -------- ---------
Balance December 31, 2002 ................. $182,498 $ 19,890 $ 202,388
======== ======== =========

In accordance with SFAS No. 142, the Company completed the impairment test
of the valuation of goodwill and intangibles as of January 1, 2002 and its
annual review as of April 1, 2002 and based upon the results, there was no
impairment. During the year, the Company recorded a $2.2 million impairment
charge included in selling, general and administrative expenses related to one
of its unamortized tradenames due to changes in market conditions since April 1,
2002. This is included in the Company's Consumer segment. Fair value was
determined using discounted cash flows. This tradename, with a carrying value of
approximately $4.8 million, will be subsequently amortized as it has been
determined to have a finite life.

During the year, the Company completed the purchase price allocation of
the USAD acquisition and the purchase price allocation of the Carter-Wallace
acquired brands, which adjusted the valuation of indefinite lived tradenames and
goodwill. The Company in 2001 amortized tradenames and goodwill under rules in
effect prior to the issuance of SFAS No. 142 using the same useful life,
therefore, there was no impact to the 2001 amortization expense recorded by the
Company.

Net income results and per share amounts for the years ended December 31,
2002, 2001 and 2000, respectively, reflecting goodwill and intangible assets
that are no longer being amortized is as follows:

(Dollars in thousands, except per share data) YEAR ENDED DECEMBER 31,
--------------------------------------
2002 2001 2000
---------- ---------- ----------

Reported net income .............................................. $ 66,690 $ 46,984 $ 33,559
Goodwill amortization (net of tax) ............................... -- 2,213 1,255
Discontinued tradename amortization (net of tax) ................. -- 315 --
---------- ---------- ----------
Adjusted net income .............................................. $ 66,690 $ 49,512 $ 34,814
========== ========== ==========
Basic earnings per share
As reported .................................................. $ 1.68 $ 1.21 $ 0.88
Goodwill amortization ........................................ -- 0.06 0.03
Tradename amortization ....................................... -- 0.01 --
---------- ---------- ----------
Adjusted net income .......................................... $ 1.68 $ 1.28 $ 0.91
========== ========== ==========
Diluted earnings per share
As reported .................................................. $ 1.60 $ 1.15 $ 0.84
Goodwill amortization ........................................ -- 0.05 0.03
Tradename amortization ....................................... -- 0.01 --
---------- ---------- ----------
Adjusted net income .......................................... $ 1.60 $ 1.21 $ 0.87
========== ========== ==========

8. ACCOUNTS PAYABLE AND ACCRUED EXPENSES

Accounts payable and accrued expenses consist of the following:

(In thousands) 2002 2001
-------- --------

Trade accounts payable .................... $ 88,068 $ 97,238
Accrued marketing and promotion costs ..... 39,943 50,148
Accrued wages and related costs ........... 13,451 12,645
Accrued pension and profit-sharing ........ 13,217 7,450
Other accrued current liabilities ......... 8,228 8,695
-------- --------
$162,907 $176,176
======== ========

9. SHORT-TERM BORROWINGS AND LONG-TERM DEBT

The Company entered into a syndicated bank loan to finance its investment
in Armkel, the acquisition of USA Detergents and the Anti-perspirant and Pet
Care business from Carter Wallace. The Company extinguished all the short-term
unsecured lines of credit as a result of last year's acquisitions. This
long-term $510 million credit facility consists of $410 million in 5 and 6-year
term loans and a $100 million revolving credit facility, which remained fully
undrawn. The weighted average interest rate on these borrowings at December 31,
2002 and 2001 exclusive of deferred financing costs and commitment fees were
approximately 5.1% and 5.5%, respectively, including the effect of hedges.

In addition, the Company's Brazilian subsidiary has lines of credit which
allow it to borrow in its local currency. This amounts to $7 million, of which
approximately $4 million and $3 million was utilized as of December 31, 2002 and
2001, respectively. The weighted average interest rate on these borrowings at
December 31, 2002 and 2001 was approximately 10.0% and 9.0%, respectively.

Short-term borrowings and debt consist of the following:

(In thousands) 2002 2001
---------- ----------

Syndicated Financing Loan due September 30, 2006 .................... $ 75,280 $ 125,000
Amount due 2003 $ 7,924
Amount due 2004 $ 15,848
Amount due 2005 $ 23,773
Amount due 2006 $ 27,735
Syndicated Financing Loan due September 30, 2007 .................... 283,190 285,000

Amount due 2003 $ 2,846
Amount due 2004 $ 2,846
Amount due 2005 $ 2,846
Amount due 2006 $ 30,596
Thereafter $ 244,056
Various Debt from Brazilian Banks
$4,490 due in 2003, $446 in 2004, $404 in 2005, $404 in 2006 and
$144 due in 2007 ........................................ 5,888 3,384
Industrial Revenue Refunding Bond
Due in installments of $685 from 2003-2007 and $650 in 2008 ......... 4,075 4,760
---------- ----------
Total debt ..................................................... 368,433 418,144
Less: current maturities ....................................... 15,945 11,580
---------- ----------
Net long-term debt ............................................. $ 352,488 $ 406,564
========== ==========

The principal payments required to be made are as follows:

(In thousands)

2003 ........................................... 15,945
2004 ........................................... 19,825
2005 ........................................... 27,708
2006 ........................................... 59,420
2007 and subsequent ............................ 245,535
--------
$368,433
========

The Company entered into interest rate swap agreements, which are
considered derivatives, to reduce the impact of changes in interest rates on its
floating rate debt as required by the credit agreement. The swap agreements are
contracts to exchange floating interest payments for fixed interest payments
periodically over the life of the agreements without the exchange of the
underlying notional amounts. As of December 31, 2002, the Company had swap
agreements in the amount of $235 million, swapping debt with either a one or a
three-month LIBOR rate for a fixed interest rate. These swaps, of which, $115
million expire at various points of time in 2003 and the remaining $120 million
expire also at various points of time in 2004. These swaps were recorded as a
liability in the amount of $3.9 million at December 31, 2002 and a $2.2 million
liability in 2001. These instruments are designated as cash flow hedges as of
December 31, 2002 and any changes in value are recorded in other comprehensive
loss that are expected to be reclassified to earnings over the next 12 months.
As of December 31, 2001, the Company had swap agreements in the amount of $200
million swapping debt with either a one or a three-month libor rate for a fixed
interest rate. These instruments were designated as cash flow hedges as of
December 31, 2001 and any changes in value were recorded in other comprehensive
income.

The Industrial Revenue Refunding Bond carries a variable rate of interest
determined weekly, based upon current market conditions for short-term
tax-exempt financing. The average rate of interest charged in 2002 and in 2001
was 1.3% and 3.9%, respectively.

QGN's long-term debt is at various interest rates that are determined by
several inflationary indexes in Brazil.

The term loans pay interest at 200 and 250 basis points over LIBOR,
depending on the ratio of total debt to EBITDA. Financial covenants include
total debt to EBITDA and interest coverage, which if not met, could result in an
event of default and trigger the early termination of the credit facility, if
not remedied within a certain period of time. All assets of the Company are
pledged as collateral. For a further explanation of EBITDA, see Liquidity and
Capital Resources included in the Company's Management's Discussion and Analysis
of Financial Condition and Results of Operations.

10. INCOME TAXES

The components of income before taxes are as follows:

(in thousands) 2002 2001 2000
--------- --------- ---------

Domestic ............. $ 96,752 $ 68,255 $ 47,675
Foreign .............. 4,340 5,600 4,199
--------- --------- ---------
Total ................ $ 101,092 $ 73,855 $ 51,874
========= ========= =========

The following table summarizes the provision for U.S. federal, state and
foreign income taxes:

(in thousands) 2002 2001 2000
--------- --------- ---------

Current:
U.S. federal .... $ 10,487 $ 16,222 $ 18,734
State ........... 3,450 2,037 2,918
Foreign ......... 2,648 1,317 730
--------- --------- ---------
$ 16,585 $ 19,576 $ 22,382
========= ========= =========
Deferred:
U.S. federal .... $ 17,825 $ 6,033 $ (3,801)
State ........... 1,116 663 (1,047)
Foreign ......... (1,124) 599 781
--------- --------- ---------
$ 17,817 $ 7,295 $ (4,067)
--------- --------- ---------
Total provision ...... $ 34,402 $ 26,871 $ 18,315
========= ========= =========

Deferred tax (assets)/liabilities consist of the following at December 31:

(In thousands) 2002 2001
-------- --------

Current deferred tax assets:
Promotions, principally coupons .......................... $ (5,016) $ (6,121)
Reserves and other liabilities ........................... (3,151) (5,015)
Accounts receivable ...................................... (5,746) (5,708)
Net operating loss ....................................... (1,700) (1,700)
Capitalization of inventory costs ........................ (1,436) (802)
Other .................................................... (1,105) (503)
-------- --------
Total current deferred tax assets ........................ (18,154) (19,849)
-------- --------
Nonpension postretirement and postemployment benefits .... (6,041) (6,120)
Capitalization of items expensed for book purposes ....... (7,344) (5,697)
Reserves and other liabilities ................................ (2,829) (3,175)
Investment valuation difference .......................... (921) (824)
Loss carryfoward of foreign subsidiary (1) ............... (2,750) (4,401)
Foreign exchange translation adjustment .................. (4,625) (3,143)
Valuation allowance ...................................... 4,625 7,544
Depreciation and amortization ............................ 56,043 44,895
Net operating loss carryforward .......................... (5,006) (5,563)
Difference between book and tax loses of equity investment 28,461 3,014
Tax credits ................................................... (1,868) --
Other .................................................... (642) 502
-------- --------
Net noncurrent deferred tax liabilities .................. 57,103 27,032
-------- --------
Net deferred tax liability .................................... $ 38,949 $ 7,183
======== ========

- ----------

(1) The loss carryfoward existed at the date of acquisition. Any recognition
of this benefit will be an adjustment to Goodwill.

The difference between tax expense and the "expected" tax, which would
result from the use of the federal statutory rate is as follows:

(In thousands) 2002 2001 2000
-------- -------- --------

Statutory rate .............................................. 35% 35% 35%
Tax which would result from use of the federal statutory rate $ 35,382 $ 25,849 $ 18,156
Depletion ................................................... (420) (416) (398)
Research & development credit ............................... (600) (300) (350)
State and local income tax, net of federal effect ........... 2,968 1,765 1,216
Varying tax rates of foreign affiliates ..................... (45) (169) (87)
Benefit from foreign sales corporation ...................... (825) -- --
Effect of foreign operations of equity investment ..... (1551) 126 --
Other ....................................................... (507) 16 (222)
-------- -------- --------
(980) 1,022 159
-------- -------- --------
Recorded tax expense ........................................ $ 34,402 $ 26,871 $ 18,315
-------- -------- --------
Effective tax rate .......................................... 34.0% 36.4% 35.3%
======== ======== ========

The net operating loss carryforwards for federal, foreign and state
amounted to $19.2, $10.2 and $26.3 million, respectively. These NOL's expire on
various dates through December 31, 2020.

11. BENEFIT PLANS

The Company has defined benefit pension plans covering certain hourly
employees. Pension benefits to retired employees are based upon their length of
service and a percentage of qualifying compensation during the final years of
employment. The Company's funding policy, is consistent with federal funding
requirements.

The Company maintains unfunded plans, which provide medical benefits for
eligible domestic retirees and their dependents. The Company accounts for these
benefits in accordance with Statement of Financial Accounting Standards No. 106
(SFAS 106), "Employers' Accounting for Postretirement Benefits Other than
Pensions." This standard requires the cost of such benefits to be recognized
during the employee's active working career.

The following table provides information on the status of the plans at
December 31:

NONPENSION
POSTRETIREMENT
PENSION PLANS BENEFIT PLANS
(In thousands) 2002 2001 2002 2001
-------- -------- -------- --------

Change in Benefit Obligation:
Benefit obligation at beginning of year ...... $ 19,514 $ 18,317 $ 11,100 $ 10,217
Service cost ................................. 140 426 446 436
Interest cost ................................ 1,338 1,268 876 734
Plan participants contributions .............. 11 -- -- --
Amount acquired .............................. -- 1,987 -- 54
Actuarial (gain) loss ........................ 2,284 (79) 1,803 (22)
Benefits paid ................................ (1,644) (2,405) (514) (319)
-------- -------- -------- --------
Benefit obligation at end of year ................. $ 21,643 $ 19,514 $ 13,711 $ 11,100
======== ======== ======== ========
Change in Plan Assets:
Fair value of plan assets at beginning of year $ 16,678 $ 18,930 $ -- $ --
Actual return on plan assets (net of expenses) (159) (1,571) -- --
Employer contributions ....................... 66 65 514 319
Plan participants contributions .............. 11 -- -- --
Amount acquired .............................. -- 1,659 -- --
Benefits paid ................................ (1,644) (2,405) (514) (319)
-------- -------- -------- --------
Fair value of plan assets at end of year .......... $ 14,952 $ 16,678 $ -- $ --
======== ======== ======== ========
Reconciliation of the Funded Status:
Funded status ................................ $ (6,691) $ (2,836) $(13,711) $(11,100)
Unrecognized prior service cost (benefit) .... 26 29 (540) (619)
Unrecognized actuarial (gain) loss ........... 4,571 726 (1,195) (3,073)
Loss due to currency fluctuations ............ 71 76 -- --
-------- -------- -------- --------
Net amount recognized at end of year .............. $ (2,023) $ (2,005) $(15,446) $(14,792)
======== ======== ======== ========

Amounts recognized in the statement of financial position consist of:

2002 2001 2002 2001
-------- -------- -------- --------

Prepaid benefit cost ......................... $ -- $ 1,120 $ -- $ --
Accrued benefit liability .................... (5,986) (3,125) (15,446) (14,792)
Accumulated other comprehensive income ....... 3,963 -- -- --
-------- -------- -------- --------
Net amount recognized at end of year .............. $ (2,023) $ (2,005) $(15,446) $(14,792)
======== ======== ======== ========

Weighted-average assumptions as of December 31:
Discount rate ..................................... 6.75% 7.25% 6.75% 7.25%
Rate of compensation increase ..................... 5.00% 5.00% -- --
Expected return on plan assets .................... 8.75% 9.25% -- --

Net Pension and Net Postretirement Benefit Costs consisted of the
following components:

PENSION COSTS POSTRETIREMENT COSTS
------------- --------------------
(In thousands) 2002 2001 2000 2002 2001 2000
------- ------- ------- ------- ------- -------

Components of Net Periodic Benefit Cost:
Service cost .......................... $ 140 $ 426 $ 433 $ 446 $ 436 $ 397
Interest cost ......................... 1,338 1,268 1,090 876 734 682
Expected return on plan assets ........ (1,442) (1,713) (1,843) -- -- --
Amortization of transition obligation . -- -- 3 -- -- --
Amortization of prior service cost .... 3 29 30 (79) (105) (105)
Recognized actuarial (gain) or loss ... 46 (130) (334) (40) (158) (212)
FAS 88 expense ........................ -- -- -- -- (226) --
------- ------- ------- ------- ------- -------
Net periodic benefit cost (income) ... $ 85 $ (120) $ (621)(1) $ 1,203 $ 681 $ 762
======= ======= ======= ======= ======= =======

- ----------

(1) In 2000, the Company offered to Syracuse plant employees a cash balance
benefit in connection with the Syracuse plant shutdown. Accordingly, the
related expense of $2,172 thousand is included in plant shutdown and other
items in the accompanying statement of income. See note 14.

On December 31, 2002 the accumulated benefit obligation related to the
pension plans exceeded the fair value of the pension plan assets (such excess is
referred to as an un-funded accumulated benefit obligation). This difference is
attributed to (1) an increase in the accumulated benefit obligation that
resulted from the decrease in the interest rate used to discount the projected
benefit obligation to its present settlement amount from 7.25% to 6.75% and (2)
a decline in the market value of the plan assets at December 31, 2002. As a
result, in accordance with SFAS No. 87, the Company recognized an additional
minimum pension liability of $3.9 million included in benefit obligations, and
recorded a charge, net of tax, to accummulated other comprehensive loss of $2.4
million which decreased stockholders' equity. The charge to stockholders' equity
for the excess of additional pension liability represents a net loss not yet
recognized as pension expense.

The pension plan assets primarily consist of equity mutual funds, fixed
income funds and a guaranteed investment contract fund. The accumulated
postretirement benefit obligation has been determined by application of the
provisions of the Company's medical plans including established maximums and
sharing of costs, relevant actuarial assumptions and health-care cost trend
rates projected at 10% for 2002 and decreasing to an ultimate rate of 5% in
2012. The Company has a maximum annual benefit based on years of service for
those over 65 years of age.

(In thousands) 2002 2001
----- -----

Effect of 1% increase in health-care cost trend rates on:
Postretirement benefit obligation ....................... $ 892 $ 739
Total of service cost and interest cost component ....... 99 93
Effect of 1% decrease in health-care cost trend rates on:
Postretirement benefit obligation ....................... (796) (657)
Total of service cost and interest cost component ....... (88) (82)

Deferred Compensation Plan

The Company maintains a deferred compensation plan in which certain
management and highly compensated employees are eligible to defer a maximum of
100% of their regular compensation and bonuses and non-employee Board members
are eligible to defer up to 100% of their directors compensation. The
compensation deferred under this plan is credited with earnings or losses based
upon changes in values of investments elected by the plan participant. Each plan
participant is fully vested in all deferred compensation and earnings credited
to his or her account. The deferrals are invested by the Company through a
trust. The trust invests these deferrals based upon the elections made by the
participants, with the exception of Church & Dwight stock. These amounts are
invested in either equity mutual funds or money market accounts. The Company
uses hedging instruments to minimize the cost related to the volatility of
Church & Dwight stock. At December 31, 2002 and 2001, the liability under these
plans amounted to $16.7 million and $13.5 million, respectively and the funded
balances amounted to $11.4 million and $9.7 million, respectively. The amounts
charged (credited) to earnings, including the effect of the hedges, totaled
$2.1million, $2.5 million, and $(1.0) million in 2002, 2001 and 2000,
respectively.

The Company also maintains a defined contribution profit-sharing plan for
salaried and certain hourly employees. Amounts charged to earnings were
$7,058,000, $3,099,000 and $3,628,000 in 2002, 2001 and 2000, respectively.

The Company also has an employee savings plan. The Company matches 50% of
each employee's contribution up to a maximum of 6% of the employee's earnings.
The Company's matching contributions to the savings plan were $2,330,000,
$1,675,000 and $1,342,000 in 2002, 2001 and 2000, respectively.

12. STOCK OPTION PLANS

The Company has options outstanding under three plans. Under the 1983
Stock Option Plan and the 1994 Incentive Stock Option Plan, the Company may
grant options to key management employees. The Stock Option Plan for Directors
authorizes the granting of options to non-employee directors. Options
outstanding under the plans are issued at market value, vest and are exercisable
on the third anniversary of the date of grant, and must be exercised within ten
years of the date of grant. A total of 7,000,000 shares of the Company's common
stock is authorized for issuance for the exercise of stock options.

Stock option transactions for the three years ended December 31, 2002 were
as follows:

NUMBER WEIGHTED AVG.
OF SHARES EXERCISE PRICE
--------- --------------

Outstanding at January 1, 2000 .......... 4,882,794 $12.78
Grants .............................. 783,850 17.23
Exercised ........................... 701,847 10.64
Cancelled ........................... 24,900 16.95
--------- ------
Outstanding at December 31, 2000 ........ 4,939,897 13.69
Grants .............................. 835,576 24.15
Exercised ........................... 756,591 12.11
Cancelled ........................... 112,825 21.98
--------- ------
OUTSTANDING AT DECEMBER 31, 2001 ........ 4,906,057 15.55
GRANTS .............................. 672,330 33.20
EXERCISED ........................... 749,950 14.48
CANCELLED ........................... 26,576 23.76
--------- ------
OUTSTANDING AT DECEMBER 31, 2002 ........ 4,801,861 $18.14

At December 31, 2002, 2001 and 2000, 2,784,930 options, 3,001,131 options
and 2,985,147 options were exercisable, respectively.

The table below summarizes information relating to options outstanding and
exercisable at December 31, 2002.

OPTIONS OUTSTANDING OPTIONS EXERCISABLE
-------------------------------------------- -------------------------
WEIGHTED WEIGHTED WEIGHTED
AVERAGE AVERAGE EXERCISABLE AVERAGE
EXERCISE OPTIONS REMAINING EXERCISE AS OF EXERCISE
PRICES OUTSTANDING CONTRACTUAL LIFE PRICE 12/31/2002 PRICE
------------- ----------- ---------------- -------- ----------- ------

$7.51-$10.00 292,185 2.1 $8.79 292,185 $8.79
$10.01-$12.50 1,162,521 3.0 $10.76 1,162,521 $10.76
$12.51-$15.00 746,150 4.8 $13.68 746,150 $13.68
$15.01-$17.50 756,300 5.8 $16.94 125,000 $16.05
$17.51-$25.00 1,107,224 7.2 $22.59 439,074 $20.73
$25.01-$35.00 737,481 9.3 $32.50 20,000 $27.81
--------- ----- ------ --------- ------
4,801,861 5.6 $18.14 2,784,930 $13.27

The fair-value of options granted in 2002, 2001 and 2000 is $8,866,000,
$6,540,000, and $5,626,000, respectively and the weighted average fair-value per
share of options granted in 2002, 2001 and 2000 is $13.19, $7.83 and $7.18,
respectively.

The fair-value of options granted in 2002, 2001 and 2000 is estimated on
the date the options are granted based on the Black Scholes option-pricing model
with the following weighted-average assumptions:

2002 2001 2000
---- ---- ----

Risk-free interest rate 4.6% 5.1% 6.6%
Expected life ......... 6.5 years 6.5 years 6.0 years
Expected volatility ... 34.8% 25.0% 38.8%
Dividend yield ........ 0.9% 1.2% 1.6%

13. COMPREHENSIVE INCOME

Comprehensive income is defined as net income and other changes in
stockholder's equity from transactions and other events from sources other than
stockholders. The components of changes in other comprehensive income (expense)
are as follows:

ACCUMULATED
OTHER
FOREIGN MINIMUM AVAILABLE INTEREST COMPREHENSIVE
CURRENCY PENSION FOR SALE RATE SWAP INCOME
ADJUSTMENTS LIABILITY SECURITIES AGREEMENTS (LOSS)
----------- --------- ---------- ---------- ------

Balance January 1,2000 .............. $ (4,599) $ -- $ -- $ -- $ (4,599)
Comprehensive Income changes during
the year (net of tax of $1,923) ... (1,599) -- (3,191) -- (4,790)
-------- -------- -------- -------- --------
Balance December 31, 2000 ........... (6,198) -- (3,191) -- (9,389)
Comprehensive Income changes during
the year (net of tax of $1,100) ... (2,163) -- 3,191 (1,367) (339)
-------- -------- -------- -------- --------
BALANCE DECEMBER 31, 2001 ........... (8,361) -- -- (1,367) (9,728)
COMPREHENSIVE INCOME CHANGES DURING
THE YEAR (NET OF TAX OF $2,142) ... (3,732) (2,417) -- (1,042) (7,191)
-------- -------- -------- -------- --------
BALANCE DECEMBER 31, 2002 ........... $(12,093) $ (2,417) $ -- $ (2,409) $(16,919)
======== ======== ======== ======== ========

14. PLANT SHUTDOWN AND OTHER ITEMS

During 2000, the Company recorded a pre-tax charge of $21.9 million
relating to three major elements: a $14.3 million write-down of the Company's
Syracuse N.Y. manufacturing facility, a $2.1 million charge for potential
carrying and site clearance costs, and a $5.5 million severance charge
(including $2.2 million pension

plan amendment) related to both the Syracuse shutdown and the sales force
reorganization. The Company also incurred depreciation and other charges of $1.8
million in 2000 and $1.4 million in 2001 relating to a plant and warehouses that
were shutdown. This brings the total one-time cost to approximately $25 million.
The cash portion of this one-time cost, however, was less than $5 million after
tax.

In 2001, the Company recorded pre-tax income of $.7 million primarily
related to the sale of fixed assets located in the Syracuse plant.

15. COMMON STOCK VOTING RIGHTS AND RIGHTS AGREEMENT

Effective February 19, 1986, the Company's Restated Certificate of
Incorporation was amended to provide that every share of Company common stock is
entitled to four votes per share if it has been beneficially owned continuously
by the same holder (1) for a period of 48 consecutive months preceding the
record date for the Stockholders' Meeting; or (2) since February 19, 1986. All
other shares carry one vote. (Specific provisions for the determination of
beneficial ownership and the voting of rights of the Company's common stock are
contained in the Company's Notice of Annual Meeting of Stockholders and Proxy
Statement-unaudited).

On August 27, 1999, the Board of Directors adopted a Shareholder Rights
Plan (the Plan) that essentially reinstates a Shareholder Rights Plan originally
enacted in 1989, which had terminated. In connection with the adoption of the
Plan, the Board declared a dividend of one preferred share purchase right for
each outstanding share of Company Common Stock. Each right, which is not
presently exerciseable, entitles the holder to purchase one one-hundredth of a
share of Junior Participating Preferred Stock at an exercise price of $200.000.
In the event that any person acquires 20% or more of the outstanding shares of
Common Stock, each holder of a right (other than the acquiring person or group)
will be entitled to receive, upon payment of the exercise price, that number of
shares of Common Stock having a market value equal to two times the exercise
price. In order to retain flexibility and the ability to maximize shareholder
value in the event of unknown future transactions, the Board of Directors
retains the power to redeem the rights for a set amount.

The rights were issued on September 13, 1999, payable to shareholders of
record at the close of business on that date. The rights will expire on
September 13, 2009.

16. COMMITMENTS, CONTINGENCIES AND GUARANTEES

a. Rent expense amounted to $8,901,000 in 2002, $5,048,000 in 2001
and $2,794,000 in 2000. The Company is obligated for minimum annual rentals
under non-cancelable long-term operating leases as follows:

(In thousands)

2003 ......................................... $ 9,503
2004 ......................................... 6,787
2005 ......................................... 5,972
2006 ......................................... 5,832
2007 ......................................... 5,183
2008 and thereafter .......................... 18,968
-------
Total future minimum lease commitments ............ $52,245
=======

b. In December 1981, the Company formed a partnership with a
supplier of raw materials which mines and processes sodium mineral deposits
owned by each of the two companies in Wyoming. The partnership supplies the
Company with the majority of its sodium raw material requirements. This
agreement terminates upon two years' written notice by either company.

c. Certain former shareholders of Carter-Wallace have brought legal
action against the company that purchased the pharmaceutical business of
Carter-Wallace regarding the fairness of the consideration these shareholders
received. Pursuant to various indemnification agreements, Armkel could be liable
for damages up to $12 million, and the Company could be liable directly to
Armkel for an amount up to approximately $2.1 million.

The Company believes that the consideration offered was fair to the former
Carter-Wallace shareholders, and it cannot predict with certainty the outcome of
this litigation.

d. The Company has commitments to acquire approximately $17 million
of raw material and packaging supplies from its vendors. The packaging supplies
are in either a converted or non-converted status. This enables the Company to
respond quickly to changes in customer orders/requirements.

e. In connection with the purchase of Biovance Technologies,Inc, the
Company is obligated for a guaranteed minimum payment of approximately $3.0
million based upon operating performance. The Company met this obligation by
making a $3.4 million payment in February 2003 based upon 2002 results and was
charged to Goodwill. The Company had a recorded liability of $3.0 million at
December 31, 2002.

f. The Company has letters of credit of approximately $5.7 million
with several banks which guarantee payment for such things as insurance claims
in the event of the Company's insolvency, a year's worth of lease payments on a
warehouse, and 200 days of interest on the Industrial Revenue Bond borrowing.

g. Surety/performance bonds were established for construction of the
Company's headquarters addition in Princeton, NJ and for construction activities
at the Company's North Brunswick, NJ plant for approximately $.8 million.

h. On February 28, 2003 a class action suit was filed against the
Company and Armkel, and two unrelated condom manufacturers, in the Superior
Court of New Jersey alleging injuries sustained due to the use of condoms with
N-9. The Company continues to believe that condoms with N-9 provide an
acceptable added means of contraceptive protection, however, the Company cannot
predict the outcome of this litigation.

i. The Company, in the ordinary course of its business, is the
subject of, or a party to, various pending or threatened legal actions. The
Company believes that any ultimate liability arising from these actions will not
have a material adverse effect on its consolidated financial statements.

17. SEGMENTS

Segment Information

The Company has two operating segments: Consumer Products and Specialty
Products. The Consumer Products segment comprises packaged goods primarily sold
to retailers. The Specialty Products segment includes chemicals sold primarily
to industrial and agricultural markets.

Measurement of Segment Results and Assets

The accounting policies of the segments are generally the same as those
described in the summary of significant accounting policies with the exception
of:

a. 100% of Armkel LLC's operating results are consolidated into the
Consumer Products segment results and 100% of Armand Products and ArmaKleen
joint ventures are consolidated into the Specialty Products segment results. In
previous years, 50% of Armand and ArmaKleen was consolidated. Accordingly, all
are not accounted for by the equity method.

b. The corporate segment includes the following:

1. Elimination of the operating results of the Company's
equity investments.

2. The administrative costs of the production planning and
logistics functions which are included in segment SG&A
expenses but are elements of cost of goods sold in the
Company's Consolidated Statement of Income.

3. Corporate assets include excess cash, investments, note
receivable, deferred financing costs and deferred income taxes
not used for segment operating needs.

4. 2001 and 2000 operating profits include the Syracuse
shutdown charge.

5. Corporate depreciation, depletion and amortization relate
to amortization of deferred financing costs.

c. The Specialty Products segment's identifiable assets include
equity of investments in affiliates in the amounts of $15,611,000, $16,880,000
and $19,416,000 for 2002, 2001 and 2000, respectively. The Consumer Products
segment's identifiable assets include equity of investment in affiliate of
$116,348,000 and $98,241,000 in 2002 and 2001, respectively.

The Company evaluates performance based on operating profit. There are no
intersegment sales.

Factors used to Identify Segments

The Company's segments are strategic business units with distinct
differences in product application and customer base. They are managed by
separate sales and marketing organizations.

CONSUMER SPECIALTY
PRODUCTS PRODUCTS SUBTOTAL CORPORATE TOTAL
---------- -------- ---------- --------- ----------

NET SALES
2002 $1,246,547 $223,375 $1,469,922 $(422,773) $1,047,149
2001 864,457 219,223 1,083,680 (123,973) 959,707
2000 529,585 211,668 741,253 (50,062) 691,191

GROSS PROFIT
2002 480,370 65,647 546,017 (234,796) 311,221
2001 264,635 65,145 329,780 (50,284) 279,496
2000 198,021 63,714 261,735 (20,865) 240,870

MARKETING
2002 135,730 3,930 139,660 (53,465) 86,195
2001 81,631 3,341 84,972 (10,169) 74,803
2000 71,295 3,431 74,726 (646) 74,080

SG&A
2002 191,785 33,067 224,852 (104,340) 120,512
2001 116,680 32,470 149,150 (37,318) 111,832
2000 73,974 32,367 106,341 (13,623) 92,718

OPERATING PROFIT
2002 152,855 28,628 181,483 (76,969) 104,514
2001 66,323 29,285 95,608 (2,087) 93,521
2000 52,753 26,981 79,734 (27,573) 52,161

IDENTIFIABLE ASSETS
2002 705,020 162,684 867,704 120,537 988,241
2001 720,066 142,565 862,631 86,454 949,085
2000 282,678 143,112 425,790 29,842 455,632

CAPITAL EXPENDITURES
2002 27,841 10,898 38,739 -- 38,739
2001 21,955 12,131 34,086 -- 34,086
2000 13,744 8,081 21,825 -- 21,825

DEPRECIATION, DEPLETION AND AMORTIZATION
2002 18,406 7,537 25,943 1,947 27,890
2001 19,757 6,768 26,525 1,318 27,843
2000 16,371 7,083 23,454 -- 23,454

Product line net sales data is as follows:

2002 2001 2000
----------- ----------- -----------

Deodorizing and Cleaning Products . $ 255,756 $ 236,549 $ 203,999
Laundry Products .................. 400,476 386,619 176,953
Personal Care Products ............ 385,347 159,966 112,930
International ..................... 204,968 81,323 35,703
----------- ----------- -----------
TOTAL CONSUMER PRODUCTS ........... 1,246,547 864,457 529,585
Specialty Products Division ....... 223,375 219,223 211,668
----------- ----------- -----------

TOTAL INTERNAL NET SALES .......... 1,469,922 1,083,680 741,253
Less: Unconsolidated Affiliates ... (422,773) (123,973) (50,062)
----------- ----------- -----------
TOTAL EXTERNAL NET SALES .......... $ 1,047,149 $ 959,707 $ 691,191
=========== =========== ===========

GEOGRAPHIC INFORMATION

Approximately 92% of the net sales reported in the accompanying financial
statements in 2002, 90% in 2001 and 88% in 2000 were to customers in the United
States, and approximately 95% of long-lived assets in 2002, 92% in 2001 and 88%
in 2000 were located in the U.S.

CUSTOMERS

18. SUBSEQUENT EVENT

19. UNAUDITED QUARTERLY FINANCIAL INFORMATION

The unaudited quarterly results of operations are prepared in conformity
with generally accepted accounting principles and reflect all adjustments that
are, in the opinion of management, necessary for a fair presentation of the
results of operations for the periods presented. Adjustments are of a normal,
recurring nature, except as discussed in the accompanying notes.

FIRST SECOND THIRD FOURTH FULL
(in thousands, except for per share data) QUARTER QUARTER QUARTER QUARTER YEAR
----------- ----------- ----------- ----------- -----------

2002
Net sales ....................................... $ 256,802 $ 258,463 $ 263,786 $ 268,098 $ 1,047,149
Gross profit .................................... 73,250 75,938 81,200 80,833 311,221
Income from operations .......................... 27,227 24,293 28,149 24,845 104,514
Equity in earnings of affiliates ................ 917 11,364 5,453 3,786 21,520
Net income ...................................... 14,923 18,652 17,575 15,540 66,690
Net income per share--basic ..................... $ 0.38 $ 0.47 $ 0.44 $ 0.39 $ 1.68

Net income per share--diluted ................... $ 0.36 $ 0.45 $ 0.42 $ 0.37 $ 1.60

2001
Net sales ....................................... $ 226,780 $ 229,636 $ 238,372 $ 264,919 $ 959,707
Gross profit .................................... 64,351 69,540 71,848 73,757 279,496
Income from operations .......................... 20,952 22,505 25,835 24,229 93,521
Equity in earnings (loss) of affiliates ......... 1,032 1,151 886 (9,264) (6,195)
Net income ...................................... 12,147 13,478 15,246 6,113 46,984
Net income per share--basic ..................... $ 0.32 $ 0.35 $ 0.39 $ 0.16 $ 1.21
Net income per share--diluted ................... $ 0.30 $ 0.33 $ 0.37 $ 0.15 $ 1.15

2000
Net sales ....................................... $ 165,297 $ 175,486 $ 174,302 $ 176,106 $ 691,191
Gross profit .................................... 55,835 62,913 61,995 60,127 240,870
Income (loss) from operations ................... 18,664 19,341 (1,694) 15,850 52,161
Equity in earnings of affiliates ................ 854 324 855 978 3,011
Net income (loss) ............................... 11,732 12,375 (1,236) 10,688 33,559
Net income (loss) per share--basic .............. $ 0.30 $ 0.32 $ (0.03) $ 0.28 $ 0.88
Net income (loss) per share--diluted ............ $ 0.29 $ 0.31 $ (0.03) $ 0.27 $ 0.84

INDEPENDENT AUDITORS' REPORT

To the Stockholders and Board of Directors of
Church & Dwight Co., Inc.
Princeton, New Jersey

We have audited the accompanying consolidated balance sheets of Church &
Dwight Co., Inc., and subsidiaries (the Company) as of December 31, 2002 and
2001, and the related consolidated statements of income, stockholders' equity,
and cash flows for each of the three years in the period ended December 31,
2002. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these 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, such consolidated financial statements present fairly, in
all material respects, the financial position of the Company at December 31,
2002 and 2001, and the results of its operations and its cash flows for each of
the three years in the period ended December 31, 2002 in conformity with
accounting principles generally accepted in the United States of America.

As discussed in notes 1 and 7 to the consolidated financial statements, in
2002 the Company changed its method of accounting for goodwill and other
intangible assets to conform to Statement of Financial Accounting Standards No.
142.

Deloitte & Touche LLP
Parsippany, New Jersey
March 10, 2003

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
ELEVEN-YEAR FINANCIAL REVIEW

(DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)

2002 2001 2000 1999 1998 1997 1996 1995 1994 1993 1992
---- ---- ---- ---- ---- ---- ---- ---- ---- ---- ----

OPERATING RESULTS
Net sales:
Consumer Products ....... $ 864.1 786.9 529.6 482.3 453.2 369.3 331.4 313.6 314.4 328.3 327.4
Specialty Products ...... 183.0 172.8 161.6 153.3 132.5 124.6 119.0 114.4 106.4 104.9 94.7
Total ................... 1,047.1 959.7 691.2 635.6 585.7 493.9 450.4 428.0 420.8 433.2 422.1
Marketing ............... $ 86.2 74.8 74.1 71.4 75.2 58.6 50.1 53.0 52.7 44.2 41.1
Research &
development ........... $ 26.9 21.8 19.4 17.9 16.4 15.8 17.8 18.5 20.6 21.2 17.8
Income from operations .. $ 104.5 93.5 52.2 67.7 42.5 30.6 27.3 8.4 1.5 35.6 37.7
% of sales .............. 10.0% 8.7% 6.6% 9.1% 6.1% 5.2% 5.1% 1.7% .3% 6.9% 7.5%
Net income .............. $ 66.7 47.0 33.6 45.4 30.3 24.5 21.2 10.2 6.1 26.3 29.5
Net income per
share--basic .......... $ 1.68 1.21 .88 1.17 .78 .63 .55 .26 .16 .65 .73
Net income per
share--diluted ........ $ 1.60 1.15 .84 1.11 .76 .61 .54 .26 .16 .64 .71

FINANCIAL POSITION
Total assets ............ $ 988.2 949.1 455.6 476.3 391.4 351.0 308.0 293.2 294.5 281.7 261.0
Total debt .............. 368.4 418.1 34.0 84.4 48.8 39.5 7.5 12.5 32.5 9.6 7.7
Stockholders' equity .... 347.6 282.3 234.7 226.7 194.8 179.3 165.3 153.7 153.9 169.4 159.1
Total debt as a % of
total capitalization .. 52% 60% 13% 27% 20% 18% 4% 8% 17% 5% 5%

OTHER DATA
Average common shares
outstanding-basic
(In thousands) ........ 39,630 38,879 38,321 38,792 38,734 38,922 39,068 39,134 39,412 40,446 40,676
Return on average
stockholders' equity .. 21.2% 18.2% 14.5% 21.5% 16.2% 14.2% 13.3% 6.6% 3.8% 16.0% 19.8%
Return on average
capital ............... 11.5% 11.2% 12.7% 17.0% 13.8% 12.8% 12.7% 6.2% 3.6% 15.3% 19.0%
Cash dividends paid ..... $ 11.9 11.3 10.7 10.1 9.3 9.0 8.6 8.6 8.7 8.5 7.7
Cash dividends paid
per common share ...... $ .30 .29 .28 .26 .24 .23 .22 .22 .22 .21 .19
Stockholders' equity per
common share .......... $ 8.77 7.26 6.12 5.84 5.05 4.62 4.25 3.94 3.94 4.22 3.91
Additions to property,
plant and equipment ... $ 38.7 34.1 21.8 33.1 27.1 9.9 7.1 19.7 28.4 28.8 12.5
Depreciation and
amortization .......... $ 27.9 27.8 23.5 19.3 16.5 14.2 13.6 13.1 11.7 10.6 9.8
Employees at year-end ... 2,256 2,099 1,439 1,324 1,127 1,137 937 941 1,028 1,096 1,092
Statistics per employee:*
(In thousands)
Sales ................. $ 513 568 650 643 615 513 573 526 486 470 462

- ----------

* 2002, 2001, 2000 and 1999 results reflect sales for U.S. operations only.


                            CHURCH & DWIGHT CO., INC.
                  EXHIBIT 99.2 - FINANCIAL STATEMENT SCHEDULES

INDEPENDENT AUDITORS' REPORT

To The Board of Directors and Stockholders of
Church & Dwight Co., Inc.
Princeton, New Jersey

We have audited the consolidated financial statements of Church & Dwight Co.,
Inc. and subsidiaries as of December 31, 2002 and 2001, and for each of the
three years in the period ended December 31, 2002, and have issued our report
thereon dated March 10, 2003 (which expresses an unqualified opinion and
includes an explanatory paragraph concerning the Company's change in its method
of accounting for goodwill and intangible assets to conform to Statement of
Financial Accounting Standards No. 142) such consolidated financial statements
and report are included elsewhere in this Form 10-K. Our audits also included
the consolidated financial statement schedule of Church & Dwight Co., Inc. and
subsidiaries, listed in Item 15. This consolidated financial statement schedule
is the responsibility of the Company's management. Our responsibility is to
express an opinion based on our audits. In our opinion, such consolidated
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.

DELOITTE & TOUCHE LLP
Parsippany, New Jersey
March 10, 2003


                                                                              44

                   CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
                                 (In thousands)



                                                         2002       2001      2000
                                                        ------     ------    ------

                                                                    
ALLOWANCE FOR DOUBTFUL ACCOUNTS:

      Balance at beginning of year                      $3,666     $2,052    $1,552
                                                        ------     ------    ------
      Additions (Reductions):
            Charged to expenses and costs               (1,223)     1,950       700
            Acquisition of subsidiary/product lines       (300)       788        --
                                                        ------     ------    ------
                                                        (1,523)     2,738       700
      Deductions:
            Amounts written off                            597      1,105       190
            Foreign currency translation adjustments        --         19        10
                                                        ------     ------    ------
                                                           597      1,124       200
                                                        ------     ------    ------

      BALANCE AT END OF YEAR                            $1,546     $3,666    $2,052


There was an additional reserve related to non-trade receivables which had no
activity or balance in 2000 and 2001, but had a provision of approximately $1.4
million during 2002.


                                                                              24


                                                                    EXHIBIT 99.3

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

      In connection with the Annual Report of Church & Dwight Co., Inc. (the
"Company") on Form 10-K for the fiscal year ended December 31, 2002 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Robert A. Davies, III, Chairman and Chief Executive Officer of the Company,
certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of The Sarbanes-Oxley Act of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d), as
applicable, of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.

A signed original of this written statement required by Section 906 has been
provided to Church & Dwight Co., Inc. and will be retained by Church & Dwight
Co., Inc. and furnished to the Securities and Exchange Commission or its staff
upon request.

                              By:    /s/ Robert A. Davies, III
                                  ----------------------------------------------
                                     Name:  Robert A. Davies, III
                                     Title: Chairman and Chief Executive Officer

                              Dated:   March 27, 2003


                                                                    EXHIBIT 99.4

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350,
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

      In connection with the Annual Report of Church & Dwight Co., Inc. (the
"Company") on Form 10-K for the fiscal year ended December 31, 2002 as filed
with the Securities and Exchange Commission on the date hereof (the "Report"),
I, Zvi Eiref, Vice President, Finance of the Company, certify, pursuant to 18
U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act Of 2002, that:

1. The Report fully complies with the requirements of Section 13(a) or 15(d), as
applicable, of the Securities Exchange Act of 1934; and

2. The information contained in the Report fairly presents, in all material
respects, the financial condition and result of operations of the Company.

A signed original of this written statement required by Section 906 has been
provided to Church & Dwight Co., Inc. and will be retained by Church & Dwight
Co., Inc. and furnished to the Securities and Exchange Commission or its staff
upon request.


                              By:      /s/ Zvi Eiref
                                  -------------------------------------
                                       Name:    Zvi Eiref
                                       Title:   Vice President, Finance

                              Dated:   March 27, 2003


                                       25