Exhibit 1(b)

Sample Schedule of R&D Amortization for 1999 EVA Adjustment

R&D Expense as Reported on P&L

Amortization for
EVA Adjustment

(first year of program)

1995
1996
1997
1998
1999
$ 1,500 $ 2,200 $ 2,600 $ 3,100 $ 3,700 (1)
1995 $
1996
1997
1998
1999

300 $
$

300 $
440 $
$

300 $
440 $
520 $
$

$
$

1,500 $
300 $

3,700 $
1,040 $

6,300 $
2,300 $

1999 R&D Amortization under EVA

Cumulative R&D Expense (P&L)
Less: Cumulative Amortization (EVA)
Capitalized R&D for 1999 EVA
Calculation of Capital
Notes:
(1) = Amount added back to P&L
(2) = Amount subtracted from P&L
(3) = Amount added to Capital (Balance Sheet)

300
440
520
620

$
300
$
440
$
520
$
620
$
740
$ 2,620 (2)

9,400 $ 13,100
4,180 $ 6,800
$ 6,300 (3)

Exhibit 6

Goal Weights - Transition Year (1999)

Corporate
EVA

Corporate
9 Management Committee Officers
(includes 3 global product heads)
Staff Officers
Corporate Staff
Global Business
Global Business Staff
Regions
Regional Division President
Regional Marketing Heads
Regional Staff
Country Managers & Controllers
Commercial Directors
Free Standing Businesses
Presidents
Staff

Business
Unit EVA

Global
Business
EVA

Region
EVA

EVA
Drivers

100%
100%
75%

25%
75%
50%
50%

25%

75%
75%

25%
50%
50%
75%
50%
50%

25%
50%
50%

25%

Exhibit 8

North American Dermatology Financial Data for EVA Calculation

($ 000s except bonus)

Divisional EVA Calculation:
Actual EVA
EVA Improvement Goal
EVA Target
EVA Interval

1996

1997

1998

1999

2000

$ 2,920 (a)
.

$2,150
$5,070
$12,000

Profit & Loss:

Income before following items:
Research & Development Expense
Consumer Advertising Expense
Goodwill Amortization
Net Income Before Tax
Current Years Income Tax Payments

$24,694
12,487
34
0
$12,173
(4,260)

$31,512
14,610
38
2,500
$14,364
(5,902)

$36,584
17,094
41
2,500
$16,949
(6,807)

$42,545
20,000
45
2,500
$20,000
(7,875)

$92,550
39,000
50
2,500
$51,000
(18,725)

Balance Sheet:
Net Operating Assets

$66,949

$79,000

$93,220

$110,000

$135,000

$0

$2,500

$5,000

$7,500

$10,000
11%

$200,000
n.a.
$60,000

$200,000
60%

From Footnotes:
Accumulated Goodwill Amortization
Capital Charge for EVA Purposes
Divisional Managers Bonus:
Base Salary
Bonus Target
Bonus Payout

Note:
(a) EVA was introduced in the Dermatology division for the first time in 2000. The 1999 EVA figure was calculated retroactively solely to set
2000 EVA targets. The 1999 EVA calculation includes the amortization of a 1995 R&D expense of $10,673.

cumulative R&D expense

cumilative Amortisation

1996
12,487
12,487

1997
14,610
27,097

1998
17,094
44,191

1999
20,000
64,191

2000
39,000
103,191

2497.4

7916.8

16755

29593.2

50231.4

9,990

19,180

27,436

34,598

52,960

Captitalise R &D for EVA calculation of Capital

$71,866
TAX

$53,141

22,040

Amortization for
EVA Adjustment

1996
1997
1998
1999
2000

1996
12,487
2497.4

1997
14,610
2497.4
2922

1998
17,094
2497.4
2922
3418.8

1999
20,000
2497.4
2922
3418.8
4000

2000
39,000
2497.4
2922
3418.8
4000
7800

2497.4

5419.4

8838.2

12838.2

20638.2

11.33333 11.33333 11.33333

12.66667 12.66667 12.66667
13.66667 13.66667 13.66667
15
15
16.66667
AD

71

12.66667 26.33333 41.33333 45.33333