FORM 10-Q 

                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C.  20549

(Mark One)
[X]  QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
     ACT OF 1934
For the quarterly period ended June 30, 1996.
                                       0R

[ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
     EXCHANGE ACT OF 1934

For the transition period from                      to                   .
                               --------------------    ------------------

Commission File Number 1-644
                       -----

                           COLGATE-PALMOLIVE COMPANY                            
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              (Exact name of registrant as specified in its charter)

          DELAWARE                            13-1815595
          --------                            ----------
(State or other jurisdiction of         (I.R.S. Employer Identification No.)
  incorporation or organization)

   300 PARK AVENUE, NEW YORK, NEW YORK                  10022
- --------------------------------------                  -----
(Address of principal executive offices)               (Zip Code)

                                (212) 310-2000         
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(Registrant's telephone number, including area code)

                                  NO CHANGES                                  
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(Former name, former address, and former fiscal year, if changed since last
report).

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.  Yes    X      No          
                                        -------      --------

Indicate the number of shares outstanding of each of the issuers classes of
common stock, as of the latest practical date:

        Class                  Shares Outstanding              Date     
- ---------------------      -------------------------     ---------------
Common, $1.00 par value           146,858,912             July 31, 1996

Total number of sequentially numbered pages in this filing, including exhibits
thereto: 























PART I.      FINANCIAL INFORMATION
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                             COLGATE-PALMOLIVE COMPANY

                    CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                    -------------------------------------------

                   (Dollars in Millions Except Per Share Amounts)
                                    (Unaudited)
- ------------------------------------------------------------------------------------- Three Months Ended Six Months Ended June 30, June 30, -------- -------- 1996 1995 1996 1995 ---- ---- ---- ---- Net sales $2,167.3 $2,090.7 $4,221.0 $4,071.0 Cost of sales 1,106.3 1,110.6 2,156.7 2,121.0 -------- -------- -------- -------- Gross profit 1,061.0 980.1 2,064.3 1,950.0 -------- -------- -------- -------- Selling, general and administrative expenses 780.5 714.5 1,514.3 1,399.7 Interest expense 58.3 57.5 114.7 110.6 Interest income (5.2) (8.8) (14.5) (17.9) --------- -------- -------- -------- Income before income taxes 227.4 216.9 449.8 457.6 Provision for income taxes 78.5 73.7 157.4 157.9 -------- -------- -------- -------- Net income $ 148.9 $ 143.2 $ 292.4 $ 299.7 ======== ======== ======== ======== Earnings per common share: Primary $ .98 $ .95 $ 1.93 $ 2.00 ========= ======== ======== ======== Assuming full dilution $ .92 $ .88 $ 1.80 $ 1.85 ========= ======== ======== ======== Dividends declared per common share* $ - $ - $ .94 $ .82 ========= ======== ======== ========
* Includes two dividend declarations in the six month periods. See Notes to Condensed Consolidated Financial Statements. 2 COLGATE-PALMOLIVE COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS ------------------------------------- (Dollars in Millions) (Unaudited) - -------------------------------------------------------------------------------- ASSETS ------ June 30, December 31, 1996 1995 ---------- ---------- Current Assets: Cash and cash equivalents $ 189.8 $ 208.8 Marketable securities 69.7 47.8 Receivables (net of allowances of $31.2 and $31.9) 1,164.7 1,116.9 Inventories 817.8 774.8 Other current assets 256.8 211.9 --------- ---------- 2,498.8 2,360.2 --------- ---------- Property, Plant and Equipment: Cost 3,766.5 3,599.4 Less: Accumulated depreciation 1,508.6 1,444.2 --------- ---------- 2,257.9 2,155.2 --------- ---------- Goodwill and other intangible assets (net of accumulated amortization of $341.2 and $295.3) 2,753.7 2,741.7 Other assets 381.6 385.2 --------- ---------- $7,892.0 $ 7,642.3 ========= ========== See Notes to Condensed Consolidated Financial Statements. 3 COLGATE-PALMOLIVE COMPANY CONDENSED CONSOLIDATED BALANCE SHEETS ------------------------------------- (Dollars in Millions) (Unaudited) - -------------------------------------------------------------------------------- LIABILITIES AND SHAREHOLDERS' EQUITY ------------------------------------ June 30, December 31, 1996 1995 ---------- ---------- Current Liabilities: Notes and loans payable $ 272.5 $ 204.4 Current portion of long-term debt 90.3 37.0 Accounts payable 771.9 738.7 Accrued income taxes 71.9 76.7 Other accruals 685.1 696.3 -------- -------- 1,891.7 1,753.1 -------- -------- Long-term debt 2,970.6 2,992.0 Deferred income taxes 230.9 237.3 Other liabilities 969.6 980.1 Shareholders' Equity: Preferred Stock 399.9 403.5 Common Stock 183.2 183.2 Additional paid-in capital 1,054.3 1,033.7 Retained earnings 2,536.9 2,392.2 Cumulative foreign currency translation adjustments (531.1) (513.0) -------- -------- 3,643.2 3,499.6 Unearned compensation (374.6) (378.0) Treasury stock, at cost (1,439.4) (1,441.8) -------- -------- 1,829.2 1,679.8 -------- -------- $7,892.0 $7,642.3 ======== ======== See Notes to Condensed Consolidated Financial Statements. 4 COLGATE-PALMOLIVE COMPANY CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS ----------------------------------------------- (Dollars in Millions) (Unaudited) - -------------------------------------------------------------------------------- Six Months Ended ---------------- June 30, -------- 1996 1995 -------- --------- Operating Activities: --------------------- Net cash provided by operating activities $ 264.5 $ 218.8 -------- -------- Investing Activities: --------------------- Capital expenditures (223.4) (187.7) Payments for acquisitions, net of cash acquired (23.7) (1,239.6) Purchase of marketable securities, net (21.9) (13.4) Other, net 5.2 (36.8) -------- --------- Net cash used for investing activities (263.8) (1,477.5) -------- --------- Financing Activities: --------------------- Repayment of debt (7.6) (7.7) Proceeds from issuance of debt 119.8 1,355.5 Repurchase of common stock - (8.6) Dividends paid (147.7) (129.2) Other, net 15.3 43.7 -------- --------- Net cash (used for) provided by financing activities (20.2) 1,253.7 --------- --------- Effect of exchange rate changes on cash and cash equivalents .5 .5 -------- --------- Net decrease in cash and cash equivalents (19.0) (4.5) Cash and cash equivalents at beginning of period 208.8 169.9 -------- --------- Cash and cash equivalents at end of period $ 189.8 $ 165.4 ======== ========= See Notes to Condensed Consolidated Financial Statements. 5 COLGATE-PALMOLIVE COMPANY NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ---------------------------------------------------- (Dollars in Millions) (Unaudited) - -------------------------------------------------------------------------------- 1. The condensed consolidated financial statements reflect all normal recurring adjustments which, in management's opinion, are necessary for a fair presentation of the results for interim periods. Results of operations for the interim periods may not be representative of results to be expected for a full year. 2. Provision for certain expenses, including income taxes, media advertising, consumer promotion and new product introductory costs, are based on full year assumptions. Such expenses are charged to operations in the year incurred and are included in the accompanying condensed consolidated financial statements in proportion with the passage of time or with estimated annual tax rates or annual sales. 3. Inventories by major classes were as follows: June 30, December 31, 1996 1995 ------------- ------------ Raw material and supplies $318.2 $313.8 Work-in-process 41.3 38.3 Finished goods 458.3 422.7 ----- ----- $817.8 $774.8 ====== ====== 4. Primary earnings per share are determined by dividing net income, after deducting dividends on preferred stock, net of related tax benefits, by the weighted average number of common shares outstanding. Fully diluted earnings per common share are calculated assuming the conversion of all potentially dilutive securities, including convertible preferred stock andoutstanding options. This calculation also assumes reduction of available income by pro forma ESOP replacement funding, net of income taxes. 5. As described in Note 3 to the Company's consolidated financial statements included in its Annual Report on Form 10-K, Colgate-Palmolive acquired the worldwide Kolynos oral care business from American Home Products in January 1995. The acquisition is currently being reviewed by antitrust regulatory authorities in Brazil. While it is not yet possible to definitively determine whether or not approval will be obtained, management believes the acquisition, or some variation thereof, will eventually be approved. It is anticipated that the Brazilian authorities could render their decision during the third quarter of 1996. 6. As described in Note 4 to the Company's consolidated financial statements included in its Annual Report on Form 10-K, Colgate-Palmolive recorded a charge for restructuring its worldwide manufacturing and administrative operations in September 1995. Reserves relating to this program totaled approximately $365.5 and $435.6 at June 30, 1996 and December 31, 1995, respectively. Management believes that the costs of the restructuring program will be financed through cash from operations and does not anticipate any significant impact on its liquidity as a result of the restructuring program. 7. Reference is made to the Company's Annual Report on Form 10-K filed with the Securities and Exchange Commission for the year 1995 for a complete set of financial notes including the Company's significant accounting policies. 6 COLGATE-PALMOLIVE COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL ------------------------------------------------- CONDITION AND RESULTS OF OPERATIONS ----------------------------------- (Dollars in Millions Except Per Share Amounts) - -------------------------------------------------------------------------------- Results of Operations - --------------------- Worldwide sales reached $2,167.3 in the second quarter of 1996, a 4% increase over the 1995 second quarter, reflecting overall unit volume gains of 6%. Sales in the Oral, Personal and Household Care segment were $1,959.4 up 3% from $1,901.1 in 1995 on volume growth of 5%. Sales increases across all geographic regions contributed to the growth. Colgate-Asia/Africa sales increased 6% to $435.6 on volume gains of 8%. Excluding the effect of acquisitions, sales increased 3% on unit volume gains of 6%. Contributing to this region's growth were excellent results in China, the Philippines and India. Colgate-Europe sales decreased 3% to $534.4 as currency losses offset the 2% increase in volume. The United Kingdom, Austria, and Spain had the strongest sales increases in the region. Colgate-Latin America sales grew 6% to $522.3 on volume gains of 7%. Brazil, Argentina, Chile, Ecuador and Dominican Republic achieved healthy increases in sales and volume which offset the declines in Mexico and Venezuela where recession negatively impacted sales. Excluding the Mexico and Venezuela results, sales increased 17% on volume gains of 15%. Colgate-North America sales grew 5% to $467.1 on volume gains 7%. Market success of several new products, including Palmolive Dishwashing Liquid & Antibacterial Hand Soap and Mennen Speed Stick gel, contributed to the strong performance. The Pet Nutrition segment experienced a 10% increase in sales on unit volume increases of 4% as compared to the prior year. Worldwide sales for the first half of 1996 increased 4% to $4,221.0 from $4,071.0 in the same period of 1995, on 5% volume growth. Oral, Personal and Household Care sales increased 3% to $3,829.3 in the 1996 first half, on volume gains of 4%. Within this segment, Colgate-Asia/Africa sales increased 6% on volume growth of 8%, including a 2% increase in sales from acquisitions. Colgate-Europe sales decreased 1% despite a volume increase of 1% due to the effects of foreign exchange. Colgate-Latin America sales grew 3% on volume gains of 4%. Colgate-North America sales and volume grew 5%. Pet Nutrition sales for the first half of 1996 increased 12% on volume increases of 8%. Worldwide gross profit margin for the 1996 second quarter increased to 49.0% from 46.9% as the Company continues to focus on cost reduction and shifting product mix towards high-margin oral and personal care products. Gross profit for the first half increased to 48.9% from 47.9%. 7 COLGATE-PALMOLIVE COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL ------------------------------------------------- CONDITION AND RESULTS OF OPERATIONS ----------------------------------- (Dollars in Millions Except Per Share Amounts) - -------------------------------------------------------------------------------- Selling, general and administrative expenses increased as a percentage of sales to 36.0% in 1996 from 34.2% in 1995 in the second quarter and to 35.9% from 34.4% in the first half. This increase primarily was due to increased freight and warehousing costs and higher levels of goodwill amortization from recent acquisitions. Earnings before interest and taxes (EBIT) increased 6% to $280.5 in the 1996 second quarter, and remained relatively consistent at $550.0 for the 1996 first half versus the comparable periods in 1995. Interest expense, net of interest income, increased to $53.1 in the 1996 second quarter from $48.7 in 1995, and to $100.2 in the 1996 first half from $92.7 in 1995, primarily reflecting the full period of the increased level of debt incurred in connection with the acquisition of Kolynos. The effective tax rate for the second quarter 1996 was 34.5% versus 34.0% in 1995. The effective rate for the first half of 1995 was 35.0% versus 34.5% for the same period in 1995. Net income for the 1996 second quarter of $148.9 was 4% higher than 1995 results. Earnings per share for the 1996 second quarter increased 3% to $.98. For the first half, net income decreased 2% to $292.4 and earnings per share decreased 4% to $1.93. Liquidity and Capital Resources - ------------------------------- Working capital at both June 30, 1996 and December 31,1995 was $607.1 as compared to $804.8 at June 30, 1995. Net cash provided by operations increased to $264.5 in the first half of 1996 compared with $218.8 in the first half of 1995 due to the lower investment in working capital compared to the prior year. At June 30, 1996 commercial paper outstanding was $925.8 which is classified as long-term due to the Company's intent and ability to refinance these obligations on a long-term basis. Reference should be made to the 1995 Annual Report on Form 10-K for additional information regarding liquidity and capital resources. 8 COLGATE-PALMOLIVE COMPANY PART II. OTHER INFORMATION - -------- ----------------- - -------------------------------------------------------------------------------- Item 1. Legal Proceedings - ------- ----------------- Reference is made to Note 14 to the consolidated financial statements on page 35 of the registrant's Annual Report on Form 10-K for the year ended December 31, 1995. Item 4. Submission of Matters to a Vote of Security Holders - ------- --------------------------------------------------- The Company's annual meeting of stockholders was held on May 2, 1996. The matters voted on and the results of the vote are as follows: (a) Vernon R. Alden, Jill K. Conway, Ronald E. Ferguson, Ellen M. Hancock, David W. Johnson, John P. Kendall, Richard J. Kogan, Delano E. Lewis, Reuben Mark and Howard B. Wentz, Jr. were elected directors of the Company. The results of the vote are as follows: Votes Received Votes Withheld -------------- -------------- Vernon R. Alden 127,859,940 1,297,813 Jill K. Conway 127,993,887 1,163,866 Ronald E. Ferguson 128,024,331 1,133,422 Ellen M. Hancock 128,020,361 1,137,392 David W. Johnson 128,059,456 1,098,297 John P. Kendall 128,022,980 1,134,773 Richard J. Kogan 128,009,052 1,148,701 Delano E. Lewis 128,017,714 1,140,039 Reuben Mark 128,029,727 1,128,026 Howard B. Wentz, Jr. 128,039,298 1,118,455 (b) The selection of Arthur Andersen LLP as auditors for the year ending December 31, 1996 was approved. The results of the vote are as follows: Votes For Votes Against Abstentions --------- ------------- ----------- 127,206,950 1,374,677 576,126 (c) The adoption of the Stock Plan for Non-Employee Directors was passed. The results of the vote are as follows: Votes For Votes Against Abstentions --------- ------------- ----------- 119,297,458 5,933,831 3,926,464 9 Item 6. Exhibits and Reports on Form 8-K - ------- -------------------------------- (a) Exhibits: Exhibit 10.F. Colgate-Palmolive Company Pension Plan for Outside Directors. Exhibit 10.G. Colgate-Palmolive Company Stock Plan for Non-Employee Directors. Exhibit 11. Computation of Earnings per Common Share. Exhibit 12. Ratio of Earnings to Fixed Charges. Exhibit 27. Financial Data Schedule. (b) Reports on Form 8-K. None. The exhibits indicated above which are not included with the Form 10-Q are available upon request and payment of a reasonable fee approximating the registrant's cost of providing and mailing the exhibits. Inquiries should be directed to: Colgate-Palmolive Company Office of the Secretary (10-Q Exhibits) 300 Park Avenue New York, NY 10022-7499 10 SIGNATURE --------- Pursuant to the requirements 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. COLGATE-PALMOLIVE COMPANY ----------------------------------- (Registrant) August 14, 1996 /s/ Stephen C. Patrick ------------------------------------- Stephen C. Patrick Chief Financial Officer 11

                                                                    Exhibit 10.F


                            COLGATE-PALMOLIVE COMPANY
                       PENSION PLAN FOR OUTSIDE DIRECTORS
                             AS AMENDED AND RESTATED
                              Effective May 2, 1996

                                    Article I

                                     PURPOSE

The purpose of the Plan, which was first adopted effective April 1, 1983, is to
assist the Company in attracting and retaining qualified individuals to serve as
Outside Directors by providing such individuals with a competitive level of
pension benefits.

                                   Article II
                                   DEFINITIONS

As used in the Plan, the following terms shall have the meanings set forth
below:

2.1 "Board" shall mean the Board of Directors of the Company.

2.2 "Change of Control" shall mean the happening of any of the following events:

     (a) An acquisition by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as
amended from time to time, and any successor thereto (the "Exchange Act")) (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act) of 20% or more of either (1) the then outstanding shares
of the common stock, par value $1.00 per share of the Company (the "Outstanding
Company Common Stock"), or (2) the combined voting power of the then outstanding
voting securities of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities"); excluding, however, the
following: (i) any acquisition directly from the Company, other than an
acquisition by virtue of the exercise of a conversion privilege unless the
security being so converted was itself acquired directly from the Company, (ii)
any acquisition by the Company, (iii) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (iv) any acquisition by any corporation
pursuant to a transaction which complies with clauses (1), (2) and (3) of
subsection (c) of this Section 2.2; or

     (b) A change in the composition of the Board such that the individuals who,
as of February 17, 1994, constitute the Board (such Board shall be hereinafter
referred to as the "Incumbent Board") cease for any reason to constitute at
least a majority of the Board; provided, however, for purposes of this Section
2.2, that any individual who becomes a member of the Board subsequent to
February 17, 1994, whose election, or nomination for election by the Company's
stockholders, was 







approved by a vote of at least a majority of those individuals who are members
of the Board and who were also members of the Incumbent Board (or deemed to be
such pursuant to this proviso) shall be considered as though such individual
were a member of the Incumbent Board; but, provided further, that any such
individual whose initial assumption of office occurs as a result of either an
actual or threatened election contest (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board shall not be so considered as a member of the Incumbent Board; or

     (c) The approval by the stockholders of the Company of a reorganization,
merger or consolidation or sale or other disposition of all or substantially all
of the assets of the Company ("Corporate Transaction"); excluding; however, such
a Corporate Transaction pursuant to which (1) all or substantially all of the
individuals and entities who are the beneficial owners, respectively, of the
outstanding Common Stock and outstanding Company voting securities immediately
prior to such Corporate Transaction will beneficially own, directly or
indirectly, more than 60% of, respectively, the outstanding shares of common
stock, and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case may be, of
the corporation resulting from such Corporate Transaction (including, without
limitation, a corporation which as a result of such transaction owns the Company
or all or substantially all of the Company's assets either directly or through
one or more subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Corporate Transaction, of the outstanding
Common Stock and outstanding Company voting securities, as the case may be, (2)
no Person (other than the Company, any employee benefit plan (or related trust)
of the Company or such corporation resulting from such Corporate Transaction)
will beneficially own, directly or indirectly, 20% or more of, respectively, the
outstanding shares of common stock of the corporation resulting from such
Corporate Transaction or the combined voting power of the outstanding voting
securities of such corporation entitled to vote generally in the election of
directors except to the extent that such ownership existed prior to the
Corporate Transaction and (3) individuals who were members of the Incumbent
Board will constitute at least a majority of the members of the board of
directors of the corporation resulting from such Corporate Transaction; or

     (d) The approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.

2.3 "Committee" shall mean the committee referred to in Article V.

2.4 "Company" shall mean Colgate-Palmolive Company and any person, firm or
corporation which may hereafter succeed to the interests of the Company by
merger consolidation or otherwise.





                                     -2-






2.5 "Disability" shall mean an illness or other incapacity which qualifies an
Outside Director for disability benefits under the Social Security Act or which
the Board or Committee determines precludes such Outside Director from fully
discharging his or her responsibilities as a member of the Board.

2.6 "Electing Outside Director" shall mean an Outside Director who is eligible
to elect to have the terms of this Plan continue to apply to him or her after
December 31, 1996, and who so elects, according to the terms of Section 4.1(a).

2.7 "Non-Electing Outside Director" shall mean an Outside Director who is not
eligible to make the election pursuant to Section 4.1(a) or if eligible, does
not so elect.

2.8 "Outside Director" shall mean a member of the Board who is not, nor at any
time has been, an employee of the Company or any of its subsidiaries.

2.9 "Pension Benefit" shall mean the pension benefit determined in accordance
with Section 4.3.

2.10 "Pension Replacement Account" shall mean the account established for the
benefit of a Non-Electing Outside Director pursuant to Section 4.3(c) upon
termination of this Plan with respect to such Non-Electing Outside Director in
accordance with Article III.

2.11 "Plan" shall mean the Colgate-Palmolive Company Pension Plan for Outside
Directors, as amended from time to time.

2.12 "Retainer" shall mean the retainer determined in accordance with Section
4.3(a).

2.13 "Retired Outside Director" shall mean an Outside Director who retired and
began receiving a Pension Benefit prior to June 30, 1996, an Electing Outside
Director who has satisfied the eligibility requirements of Section 4.1 for a
Pension Benefit, or a Non-Electing Outside Director who has satisfied the
eligibility requirements of Section 4.1 for a Pension Replacement Account.

2.14 "Service" shall mean all periods of service as an Outside Director
(including any such periods prior to April 1, 1983) whether or not such service
is continuous.

                                   Article III
                                  PARTICIPATION

Each Outside Director who has joined the Board on or prior to January 1, 1996,
shall participate in the Plan, subject to its termination as of December 31,
1996 with respect to any Non-Electing Outside Director.



                                      -3-





                                   Article IV
                                PENSION BENEFITS

4.1 Eligibility for Pension Benefits or Pension Replacement Account
    ---------------------------------------------------------------

     (a) Each Outside Director who as of May 1, 1997, is within five years of
the stipulated retirement age set forth in Section 13(A) of the Company's
By-Laws may elect to remain covered by the terms of this Plan beyond December
31, 1996, and through the date of his or her retirement from the Board, in
accordance with this Section 4.1. Such election must be made no later than June
30, 1996, by written notice to the Committee. Each Outside Director who is
eligible to make such election and who so elects hereafter shall be referred to
as an "Electing Outside Director" and shall be eligible to receive a Pension
Benefit under this Plan pursuant to the terms of Sections 4.1 (b) through (e)
below.

     Each Outside Director who is not eligible to make such an election or if
eligible, does not so elect, hereafter shall be referred to as a "Non-Electing
Outside Director" and, shall be eligible to have a Pension Replacement Account
eligible on his or her behalf upon termination of this Plan with respect to him
or her and shall be eligible ultimately to receive the balance in such account,
in accordance with the terms of this Section 4.1 and Section 4.3 below.

     (b) Each Outside Director who has completed nine years of Service and who
retires from the Board by reason of age in accordance with the provisions of the
Company's By-Laws, as amended from time to time, shall be eligible upon such
retirement for a Pension Benefit, if an Electing Outside Director, or to receive
the balance credited to a Pension Replacement Account, if a Non-Electing Outside
Director.

     (c) Each Outside Director who has completed five years of Service and who
retires from the Board by reason of Disability shall be eligible upon such
retirement for a Pension Benefit, if an Electing Outside Director, or for the
balance credited to a Pension Replacement Account, if a Non-Electing Outside
Director.

     (d) If a Non-Electing Outside Director who has completed five years of
Service dies before he or she retires from the Board, the balance credited to
his or her Pension Replacement Account shall be payable to the beneficiary he or
she has designated prior to the Non-Electing Outside Director's death.

     (e) Each Outside Director who has completed nine years of Service and who
retires from the Board other than by reason of age or Disability, but with the
written approval of the Committee, shall be eligible for a Pension Benefit, if
an Electing Outside Director, or the balance credited to a Pension Replacement
Account, if a Non-Electing Outside Director, upon attaining the age at which his
or her 




                                  -4-




retirement from the Board would have been required in accordance with the
Company's By-Laws in effect at the time of his or her retirement.


4.2 Commencement of Pension Benefits or Payments from Pension Replacement
    ---------------------------------------------------------------------
    Account
    -------
            
     (a) A Retired Outside Director's Pension Benefit (if an Electing Outside
Director) or the payment of the balance credited to the Pension Replacement
Account (if a Non-Electing Outside Director) shall commence as of the first day
of the calendar quarter next following the date he or she becomes a Retired
Outside Director. The balance credited in the Pension Replacement Account shall
be paid in accordance with Section 4.3.

     (b) If a former Outside Director returns to membership on the Board, the
Pension Benefit (if a former Electing Outside Director) or the remaining unpaid
balance credited to his or her Pension Replacement Account (if a former
Non-Electing Outside Director) that is or may become payable to him or her shall
cease to be payable for so long as he or she continues to be a member of the
Board. Upon subsequent retirement, the Pension Benefits to which a former
Electing Outside Director is or may become entitled shall be redetermined
pursuant to this Article IV on the basis of the Company's By-Laws and a Retainer
not exceeding that described in Section 4.3(a). If a former Non-Electing Outside
Director, the remaining unpaid balance of his or her Pension Replacement
Account, if any, shall be payable.

4.3 Amount and Form of Pension Benefit; Pension Replacement Account
    ---------------------------------------------------------------

     (a) A Retired Outside Director's Pension Benefit, if a former Electing
Outside Director or an Outside Director who retired prior to June 30, 1996,
shall be an annual cash benefit equal to 100% of the Retainer paid to him or her
while an Outside Director for the twelve months immediately preceding his or her
retirement from the Board; provided, however, that for purposes of determining
the size of the Pension Benefit of an Electing Outside Director who retires on
or after May 1, 1997, the Retainer shall be deemed not to exceed the sum of
$18,000 plus 275 shares of Company common stock.

     "Retainer" shall mean all cash and property paid to an Outside Director for
services as an Outside Director, other than stock options granted and gains
realized in cash or property upon the exercise of such options, fees for
attendance at meetings of the Board and any committees thereof, fees for service
on any committee of the Board and reimbursement of expenses.

     All property paid as part of the Retainer shall be valued by the Committee
at fair market value on the date of payment. In the case of Company common
stock, fair market value shall be the average of the high and low prices per
share of the 




                                        -5-




Company's common stock as listed in the New York Stock Exchange Composite Tape
or, if not listed on such exchange, on any other national securities exchange on
which the Company's common stock is listed or on NASDAQ, for the day on which
the Outside Director is deemed to have received such stock. In the absence of a
reported sale, the average between the high and the low prices on the most
recent date on which a sale was reported shall be used.

     (b) The Pension Benefit of a Retired Electing Outside Director shall be
payable in equal quarterly installments for his or her lifetime only. No death
or other survivor benefits are payable under the Plan.

     (c) In connection with the termination of this Plan as of December 31, 1996
with respect to any Non-Electing Outside Director according to the terms of
Article III above, there shall be established a Pension Replacement Account as
of such date. The opening balance credited to the Pension Replacement Account
shall be based upon a cash amount necessary to provide a stream of future
payments to the Retired Non-Electing Outside Director that is substantially
equivalent to the Pension Benefit accrued under this Plan through December 31,
1996 (the "Accrued Amount"). The Accrued Amount shall be determined according to
a procedure developed by the Plan's outside advisors and approved by the
Committee, as set forth on Appendix A hereto.

     The Pension Replacement Account shall be denominated in shares of Company
common stock. The opening balance shall be a credit equal to the number of
shares of such stock that could have been purchased with the Accrued Amount at
the average of the closing prices thereof on each business day during the
immediately preceding month. As of any dividend record date for the Company
common stock, the Pension Replacement Account will be credited with additional
shares equal to the number of shares of Company common stock that could have
been purchased, at the closing price of such shares on such date, with the
amount that would have been paid as dividends on that number of shares
(including fractions of a share) then attributed to the participant's Pension
Replacement Account. In the case of dividends paid in property other than cash,
the amount of the dividend shall be deemed to be the fair market value of the
property at the time of the payment of the dividend, as determined in good faith
by the Committee.

     At the Committee's option, a "rabbi trust" may be established with an
independent trustee, and shares of Company common stock transferred thereto on
behalf of each Non-Electing Outside Director in an amount corresponding to the
balance in his or her Pension Replacement Account at the time of transfer.
Thereafter, any dividends paid on shares of Company common stock held in the
rabbi trust will also be deposited to the trust account and will be reinvested
by the trustee in Company common stock and held there until the date for payment
of each of the one or more remaining equal annual installments of the balance in
the Pension Replacement Account, as the Non-Electing Outside Director shall have
specified by his election pursuant to this Section 4.3(c). At the time of each
such payment, the required number 





                                      -6-






of shares of Company common stock to make such payment will be converted to cash
by the trustee. If in order to equalize such installments, fractional shares
would have to be converted to cash, then such installments shall be adjusted by
rounding to the nearest whole share prior to conversion to cash.

     Commencing the first day of the quarter following the Retired Non-Electing
Outside Director's retirement, the Pension Replacement Account shall be payable
in cash in up to ten (10) equal annual installments or, at his or her election
made before June 30, 1996, in a lump sum payable as soon as feasible following
retirement. If the Retired Non-Electing Outside Director dies prior to having
received all annual installments, then the balance in the Pension Replacement
Account shall be payable to the beneficiary designated by the Retired
Non-Electing Outside Director prior to his or her death in accordance with
procedures established by the Committee.

                                    Article V
                                 ADMINISTRATION

5.1 Except as provided in Section 5.2, the Committee shall mean the Committee on
Directors of the Board or any successor committee of the Board. The Committee
shall have full power and authority to administer the Plan, including the power
to (i) promulgate forms to be used with respect to the Plan, (ii) promulgate
rules of Plan administration, (iii) settle any disputes as to rights or benefits
arising from the Plan, (iv) interpret the Plan and (v) make such decisions or
take such action as the Committee, in its sole discretion, deems necessary or
advisable to aid in the proper administration of the Plan. Any decision made by
the Committee shall be final and binding on all persons.

5.2 Following a Change of Control, the Committee shall be the Committee as
constituted immediately prior to the Change of Control with such changes in the
membership thereof as may be approved from time to time following the Change of
Control by a majority of the members of such Committee as constituted at the
applicable time. The Company shall have no right to appoint members to or to
remove members from the Committee following a Change of Control.

                                   Article VI
                                    FINANCING

The obligation to pay pension benefits or the balance in a Pension Replacement
Account under the Plan shall constitute a general obligation of the Company in
accordance with the terms of the Plan. A Director shall have only an unsecured
right to payment thereof out of the general assets of the Company.






                                   Article VII
                                  MISCELLANEOUS

7.1 Right to Amend or Terminate. The Board reserves the right at any time and
    ---------------------------
from time to time to modify, suspend, amend, or terminate the Plan in whole or
in part; provided, however, that no such action shall adversely affect the
rights under the Plan of any Outside Director or former Outside Director who has
nine or more years of Service, or any Retired Outside Director.

7.2 Board Member Relationships. Nothing in the Plan shall give or be deemed to
    --------------------------
give any Board member the right to be continued as a member of the Board, to
modify or affect the terms of Board membership or to interfere with the right of
stockholders of the Company to elect members of the Board.

7.3 Nonalienation of Benefits. To the extent permitted by law, no Pension
    -------------------------
Benefits or Pension Replacement Account balance payable under the Plan shall be
subject in any manner to anticipation, alienation, sale, transfer, assignment,
garnishment, pledge or encumbrance. Any attempt to anticipate, alienate, sell,
transfer, assign, attach, pledge or encumber the same shall be void, and no
Pension Benefits or Pension Replacement Account balance payable under the Plan
shall be in any manner liable or subject to the debts, contracts, liabilities,
engagements or torts of any Outside Director or former Outside Director,
including any Retired Outside Director.

7.4 Payments to Incompetents. If a Retired Outside Director is deemed by the
    ------------------------
Committee or is adjudged to be legally incapable of giving valid receipt and
discharge for the Pension Benefit or Pension Replacement Account balance to
which he or she is entitled, such Pension Benefit or Pension Replacement Account
balance shall be paid to such person(s) as the Committee may designate or to a
duly appointed guardian. Any such payment shall be in complete discharge of the
liability of the Plan and the Company to the Retired Outside Director.

7.5 Benefit of Plan. The Plan shall be binding upon and shall inure to the
    ---------------
benefit of the Outside Directors, their heirs and legal representatives and the
Company and its successors. The term "successor" shall mean any person, firm,
corporation or other business entity that, at any time, whether by merger,
acquisition or otherwise, acquires all or substantially all of the stock, assets
or business of the Company.

7.6 Applicable Law. The Plan shall be subject to and construed in accordance
    --------------
with the laws of the State of Delaware, without regard to the conflict of law
principles thereof.





                                    -8-



                                                                    Exhibit 10.G



                            COLGATE-PALMOLIVE COMPANY

                      STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
                            Effective January 1, 1997

1. PURPOSE. The purpose of the Colgate-Palmolive Company Stock Plan for
Non-Employee Directors (the "Plan") is to attract and retain qualified persons
to serve as directors, to enhance the equity interest of directors in the
Company, to solidify the common interests of its directors and stockholders, and
to encourage the highest level of director performance by providing them with a
proprietary interest in the Company's performance and progress, by crediting
them annually with shares of the Company's Common Stock, par value $1.00 per
share (the "Common Stock"). This Plan shall supersede the Company's Stock
Purchase Plan for Non-Employee Directors and the Stock Compensation Plan for
Non-Employee Directors, both of which shall terminate on the effective date of
this Plan.

2. EFFECTIVE DATE AND TERM. The Plan shall be effective as of January 1, 1997,
provided that it is approved by the stockholders at the Annual Meeting that
occurs in 1996. The Plan shall remain in effect until terminated by action of
the Board of Directors of the Company (the "Board").

3. PARTICIPATION. All Non-Employee Directors shall participate in the Plan. The
term "Non-Employee Director" means any individual who is a member of the Board
as of January 1, 1997, or who becomes a member of the Board thereafter during
the term of the Plan and in each case during such periods as he or she is not a
full-time employee of the Company or any of its subsidiaries.

4. ADMINISTRATION; AMENDMENT. (a) The Plan will be administered by the Employee
Relations Committee of the Company (the "Committee"), the members of which are
appointed from time to time by the Board, which shall have full power and
authority to interpret and construe the Plan, to establish, amend and rescind
rules and regulations relating to the Plan, and to take all such actions and
make all such determinations in connection with the Plan as it may deem
necessary or desirable.

     (b) The Board may from time to time make such amendments to the Plan as it
may deem proper and in the best interest of the Company without further approval
of the Company's stockholders, provided that to the extent required to qualify
transactions under the Plan for exemption under Rule 16b-3 promulgated under
Section 16 of the Securities Exchange Act of 1934, as amended from time to time
("Rule 16b-3"), no amendment to the Plan shall be adopted without further
approval of the Company's stockholders and, provided further, that if and to the
extent required for the Plan to comply with Rule 16b-3, no amendment to the Plan
shall be made more than once in any six-month period that would change the
amount, price or timing of the grants of Common Stock hereunder other than to
comport with changes in the Internal Revenue Code of 1986, as amended from time
to time and any successor thereto, the 







Employee Retirement Income Security Act of 1974, as amended from time to time
and any successor thereto, or the regulations thereunder.

     (c) Subject to the above provisions, the Board shall have authority to
amend the Plan to take into account changes in law and tax and accounting rules
as well as other developments, including without limitation, new rules which may
be promulgated under Section 16 of the Exchange Act of 1934, as amended from
time to time, and to grant awards which qualify for beneficial treatment under
such rules without stockholder approval.

5. SHARES. (a) Each Non-Employee Director shall receive compensation at the rate
of 650 shares of Common Stock per year. However, each Non-Employee Director who
has elected, prior to the effective date hereof, to continue to participate in
the Colgate-Palmolive Company Pension Plan for Outside Directors as Amended and
Restated effective May 2, 1996, shall receive compensation at the rate of 525
shares of Common Stock of the Company per year. Payments shall be made annually
on the third business day following the date of the public announcement of a
summary statement of the Company's annual sales and earnings. Either authorized
but unissued or Treasury shares shall be used for this purpose. The shares paid
pursuant to this Plan shall be in addition to any other compensation to which a
Non-Employee Director may be entitled. Each Non-Employee Director will be
required to represent that the shares are to be held for investment purposes and
not with a view to or for resale or distribution except in compliance with the
Securities Act of 1933, as amended from time to time (the "Securities Act") and
to give a written undertaking, in form and substance satisfactory to the
Company, that he or she will not publicly offer or sell or otherwise distribute
the shares other than (i) in the manner and to the extent permitted by Rule 144
of the Securities and Exchange Commission under the Securities Act, (ii)
pursuant to any other exemption from the registration provisions of the
Securities Act or (iii) pursuant to an effective registration statement.

     (b) If an individual becomes a Non-Employee Director during a calendar
year, he or she shall receive for that year the number of shares equal to the
product of (i) the number of shares to which he or she would have been entitled
to under Section 5 (a) had he or she been a Non-Employee Director for the full
calendar year, and (ii) the fraction obtained by dividing (x) the number of
calendar months during such calendar year that such person was a Non-Employee
Director by (y) 12; provided, that for purposes of the foregoing a partial
calendar month shall be treated as a whole month.

6. ADJUSTMENTS. In the event of any change in the Common Stock of the Company,
through the declaration of stock dividends, through recapitalization resulting
in stock split-ups of combinations or shares, or as the result of similar
events, appropriate adjustments shall be made by the Committee in the number and
kind of shares to be paid pursuant to the Plan.






                                   -2-






7. ELECTION TO DEFER SHARES. (a) Subject to Section 7(b), each Non-Employee
Director may make an irrevocable election to defer receipt of all or part of the
shares granted under this Plan (the "Deferral Election"). In order to make a
Deferral Election pursuant to this Section 7(a), a Non-Employee Director must
deliver to the Secretary of the Company a written notice of the Deferral
Election setting forth the number of shares to be deferred on such form as may
be prescribed by the Committee. The Deferral Election may also specify that the
Non-Employee Director elects to receive distribution of his or her Director's
Trust Account (as defined below) in accordance with Section 7(d) in a lump sum 
(a "Lump Sum Delivery Election"), or in installments over a period of less than
ten years (a "Specific Installment Election").  In the case of individuals who 
are Non-Employee Directors on June 30, 1996, this notice must be delivered no 
later than the last business day before June 30, 1996, except as specified in 
Section 7(b); in the case of individuals who become Non-Employee Directors after
June 30, 1996 during the term of the Plan, this notice must be delivered within 
thirty days after the date on which the Non-Employee Director becomes a 
Non-Employee Director.

     (b) It is the intention of this Plan that Non-Employee Directors shall have
the ability to make a Deferral Election on an annual basis provided that such
annual Deferral Elections would not cause the Plan to fail to comply with Rule
16b-3. Subject to the preceding limitation, a Non-Employee Director may make a
Deferral Election on an annual basis on or before the June 30 prior to the
commencement of the first calendar year to which the Deferral Election relates.
The Deferral Election made pursuant to Section 7(a), or any subsequent Deferral
Election permitted and made pursuant to this Section 7(b), as the case may be,
shall remain in effect for subsequent years unless a subsequent different
Deferral Election is permitted and made in accordance with this Section 7(b).

     (c) The Committee may establish a trust for the benefit of the
Non-Employee Directors on such terms and conditions as the Committee shall
determine (the "Plan Trust"), the assets of which shall be subject to the claims
of the Company's creditors. All shares deferred pursuant to this Section 7 shall
be delivered to the Plan Trust and shall be credited to the account of each
Non-Employee Director in accordance with his or her Deferral Election (the
"Director's Trust Account"), and held for delivery in accordance with the terms
of this Plan; and all earnings of a Director's Trust Account (including without
limitation dividends on shares held therein) shall be reinvested by the trustee
in Common Stock.

     (d) All distributions from a Non-Employee Director's Trust Account under
the Plan Trust shall be made to such Non-Employee Director (or, in the event of
an eligible Non-Employee Director's death, his or her designated beneficiary) in
installments of ten years payable commencing as soon as practicable following 
the cessation of his or her services as a Non-Employee Director.  However, if 
the Non-Employee Director has in effect a valid Lump Sum Delivery Election, or a
Specific






                                   -3-




Installment Election, such distributions shall be made in a lump sum, or in the
specified number of installments, as the case may be, commencing as soon as
practicable following the cessation of his or her services as a Non-Employee
Director. Distributions will be made in shares unless the Committee otherwise
determines, in accordance with the terms of the Plan Trust. Unless the 
Non-Employee Director has in effect a valid Lump Sum Delivery Election pursuant 
to Section 7(b), then such shares shall be distributed in equal yearly 
installments over the ten-year period or the shorter period specified in such 
Election, provided, that if in order to equalize such installments, fractional 
shares would have to be delivered, such installments shall be adjusted by 
rounding to the nearest whole share. If any such shares are to be delivered 
after the Non-Employee Director has died or become legally incompetent, they 
shall be delivered to the Non-Employee Director's estate or legal guardian, as 
the case may be, in accordance with the foregoing; provided, that if the 
Non-Employee Director dies with a valid Installment Delivery Election in effect,
the Committee shall deliver all remaining undelivered shares to the Non-Employee
Director's estate promptly.  References to a Non-Employee Director in this Plan 
shall be deemed to refer to the Non-Employee Director's estate or legal 
guardian, where appropriate.

     (e) Nothing in the Plan or the Plan Trust shall confer on any individual
any right to continue as a director of the Company or interfere in any way with
the right of the Company to terminate the individual's service as a director at
any time.

     (f) a Non-Employee Director shall be entitled to early distribution of all
or part of his or her Trust Account in the event of an Unforseeable Emergency,
in accordance with this paragraph. An "Unforseeable Emergency" means severe
financial hardship to the Non-Employee Director resulting from a sudden and
unexpected illness or accident of the Non-Employee Director or a dependent of
the Non-Employee Director, loss of the Non-Employee Director's property due to
casualty, or other similar extraordinary and unforseeable circumstances arising
as a result of events beyond the control of the Non-Employee Director. A
distribution pursuant to this paragraph may only be made to the extent
reasonably needed to satisfy the emergency need, and may not be made if such
hardship is or may be relieved (i) through reimbursement or compensation by
insurance or otherwise, (ii) by liquidation of the Non-Employee Director's
assets to the extent such liquidation would not itself cause severe financial
hardship, or (iii) by cessation of participation in the Plan. The determination
of whether and to what extent a distribution is permitted pursuant to this
paragraph shall be made by the Committee.

8. PURCHASE OF SHARES. (a) Subject to Section 8(b), each Non-Employee Director
may make an irrevocable election to use all or a stated percentage (in
increments of 25%) of his or her non-deferred cash compensation as a
Non-Employee Director (including non-deferred retainer fees as a committee
chairman, if applicable, to be earned during the forthcoming calendar year and
attendance fees earned during the current year) to have purchased Common Stock
on his or her behalf (the "Share Purchase Election"). The maximum amount of
compensation that may be used by a Non-Employee Director in 






                                       -4-






any year to purchase shares under this Plan shall not exceed $100,000.00. In
order to make a Share Purchase Election pursuant to this Section 8(a), a
Non-Employee Director must deliver to the Secretary of the Company a written
notice setting forth the percentage (in increments of 25%) of the Non-Employee
Director's total non-deferred cash compensation to be used to purchase Common
Stock of the Company. In the case of individuals who are Non-Employee Directors
on June 30, 1996, this notice must be delivered no later than the last business
day before June 30, 1996; in the case of individuals who become Non-Employee
Directors after June 30, 1996 during the term of the Plan, this notice must be
delivered within thirty days after the date on which the individual becomes a
Non-Employee Director.

     (b) It is the intention of this Plan that Non-Employee Directors shall have
the ability to make a Stock Purchase Election on an annual basis provided that
such annual Stock Purchase Election would not cause the Plan to fail to comply
with Rule 16b-3. Subject to the preceding limitation, a Non-Employee Directors
may make a Stock Purchase Election on an annual basis no later than the June 30
prior to the commencement of the calendar year to which the Stock Purchase
Election relates. Any Stock Purchase Election made pursuant to Section 8(a), or
any subsequent Stock Purchase Election permitted and made pursuant to this
Section 8(b), as the case may be, shall remain in effect for subsequent calendar
years unless a subsequent different Stock Purchase Election is permitted and
made in accordance with this Section, which subsequent Stock Purchase Election
shall then be applied to subsequent calendar years.

     (c) All purchases of Common Stock under the Plan shall be made on the open
market during a period beginning on the third business day following the date of
release of the Company's annual summary statements of sales and earning and
ending on the twelfth business day following such date. Brokerage fees and any
other transaction-related costs shall be paid by the Company. Shares so
purchased shall be registered in the name of and delivered to the Non-Employee
Director. Adjustments will be paid in cash for any fractional shares.







                                     -5-






                                                                      Exhibit 11


                                                                     Page 1 of 2



                                COLGATE-PALMOLIVE COMPANY

                         COMPUTATION OF EARNINGS PER COMMON SHARE
                         ----------------------------------------

                       Dollars in Millions Except Per Share Amounts
                                       (Unaudited)


Three Months Ended Six Months Ended June 30, June 30, -------- -------- PRIMARY 1996 1995 1996 1995 ---- ---- ---- ---- Earnings: Net income $ 148.9 $ 143.2 $ 292.4 $ 299.7 Deduct: Dividends on preferred shares, net of income taxes 5.3 5.4 10.7 10.8 ------- ------- ------- ------ Net income applicable to common shares $ 143.6 $ 137.8 $ 281.7 $ 288.9 ======= ======= ======= ======= Shares (in millions): Weighted average shares outstanding 146.5 145.1 146.3 144.8 ======= ======= ======= ======= Earnings per common share, primary $ .98 $ .95 $ 1.93 $ 2.00 ======= ======= ======= =======
Page 2 of 2 COLGATE-PALMOLIVE COMPANY COMPUTATION OF EARNINGS PER COMMON SHARE ---------------------------------------- Dollars in Millions Except Per Share Amounts (Unaudited)
- -------------------------------------------------------------------------------------------- Three Months Ended Six Months Ended June 30, June 30, -------- -------- 1996 1995 1996 1995 ---- ---- ---- ---- ASSUMING FULL DILUTION Earnings: Net income $ 148.9 $ 143.2 $ 292.4 $ 299.7 Deduct: Dividends on preferred shares .1 .1 .3 .3 Replacement funding resulting from assumed conversion of Series B Convertible Preference Stock, net of tax 1.3 1.7 2.5 3.4 ------- -------- ------- -------- Net income applicable to common shares $ 147.5 $ 141.4 $ 289.6 $ 296.0 ======= ======== ======= ======== Shares (in millions): Weighted average number of common shares outstanding 146.5 145.1 146.3 144.8 Assumed conversion of options reduced by the number of shares which could have been purchased with the proceeds from the exercise of such options 2.6 2.6 2.6 2.5 Assumed conversion of Series B Convertible Preference Stock 12.1 12.1 12.1 12.1 ------- -------- ------- -------- Weighted average number of common shares outstanding, as adjusted 161.2 159.8 161.0 159.4 ======= ======== ======= ======== Earnings per common share, assuming full dilution $.92 $.88 $1.80 $1.85 ======= ======== ======= ========


                                                                      Exhibit 12


                            COLGATE-PALMOLIVE COMPANY
                            -------------------------

                COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
                -------------------------------------------------

                         Dollars in Millions (Unaudited)
                                                                                
- --------------------------------------------------------------------------------

                                                        Six Months Ended
                                                          June 30, 1996
                                                          -------------

 Income before income taxes                                  $ 449.8   



 Add:
 Interest on indebtedness and amortization of debt
   expense and discount or premium                             114.7

 Portion of rents representative of interest factor
                                                                15.4


 Interest on ESOP debt, net of dividends                         1.1

 Less:
 Income of less than fifty-percent-owned 
   subsidiaries                                                 (3.8)
                                                             -------


 Income as adjusted                                          $ 577.2
                                                             =======

 Fixed Charges:

 Interest on indebtedness and amortization of debt
   expense and discount or premium                            $114.7


 Portion of rents representative of interest factor
                                                                15.4

 Interest on ESOP debt, net of dividends                         1.1


 Capitalized interest                                            6.8
                                                             -------

 Total fixed charges                                         $ 138.0
                                                             =======

 Ratio of earnings to fixed charges                              4.2
                                                             =======



In June 1989, the Company's leveraged employee stock ownership plan (ESOP)
issued $410.0 of long-term notes due through 2009 bearing an average interest
rate of 8.6%.  These notes are guaranteed by the Company.  Interest incurred on
the ESOP's notes was $16.8.  This interest is funded through preferred and
common stock dividends.  The fixed charges presented above include interest on
ESOP indebtedness to the extent it is not funded through preferred and common
stock dividends.





 

5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE QUARTERLY REPORT ON FORM 10-Q FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000,000 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 190 70 1,164 31 818 2,499 3,767 1,509 7,892 1,892 2,971 0 400 183 1,309 7,892 4,221 4,221 2,157 1,514 0 0 100 450 157 292 0 0 0 292 1.93 1.80