UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transmission period from _________________
to _________________
Commission file number 1-07151
THE CLOROX COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 31-0595760
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1221 Broadway, Oakland, CA 94612-1888
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number,
including area code (510) 271-7000
Securities registered pursuant to Section 12(b)
of the Act:
Name of each exchange
Title of each class on which registered
- ------------------------ -----------------------
Common Stock, $1 par value New York Stock Exchange
Pacific Stock Exchange
Securities registered pursuant to Section 12(g)
of the Act: NONE.
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of
the Securities Exchange Act of 1934 during the preceding 12
months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the 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.[ ]
Aggregate market value of voting stock held by non-affiliates
of the registrant at July 29, 1994: $1,861,402,866.
Number of shares of common stock outstanding
at July 29, 1994; 53,373,421.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Annual Report to Stockholders
for the Year Ended June 30, 1994 are incorporated by reference
into Parts I, II and IV of this Report. Portions of the
registrant's definitive Proxy Statement for the Annual
Meeting of Stockholders to be held on November 16, 1994,
which will be filed with the United States Securities and
Exchange Commission within 120 days after the end of the
registrant's fiscal year ended June 30, 1994, are
incorporated by reference into Part III of this Report.
</PAGE>
<PAGE>
PART I
ITEM l. BUSINESS
(a) GENERAL DEVELOPMENT OF BUSINESS.
The Company (the term "Company" as used herein includes the
registrant identified on the facing sheet, The Clorox Company,
and its subsidiaries, unless the context indicates otherwise)
was originally founded in Oakland, California in 1913 as the
Electro-Alkaline Company. It was reincorporated as Clorox
Chemical Corporation in 1922, as Clorox Chemical Co. in
1928, and as The Clorox Company (an Ohio corporation) in
1957, when the business was acquired by The Procter &
Gamble Company. The Company was fully divested by The
Procter & Gamble Company in 1969 and, as an independent
company, was reincorporated in 1973 in California as
The Clorox Company. In 1986, the Company was
reincorporated in Delaware.
The Clorox Company Annual Report for the Year Ended
June 30, 1994 ("Annual Report") to its stockholders is
included in this Form l0-K. Portions of the Annual Report
are incorporated herein by specific reference.
During fiscal year 1994, the Company continued the
implementation of a new strategy for its domestic
business. The process of divestiture of the Company's
frozen food product lines and its bottled water
business was completed. In its continuing operations,
the Company continued to focus on expanding the business
through internal development of new products and line
extensions of existing products. The Company introduced
14 new products in the U.S. during fiscal year 1994.
It also continued its strategy of considering
strategic acquisitions and, in that regard, acquired
S.O.S brand soap pads during the fiscal year. In
addition to the S.O.S domestic business, the S.O.S
acquisition provided a major source of growth in the
Company's Canadian operations.
Internationally, the Company continued the implementation
of its strategy of expanding its laundry, household
cleaning and insecticide businesses to markets where
these categories are not yet fully developed, but
where high potential exists. With Yuhan Corporation,
the Company formed the joint venture Yuhan-Clorox Co.,
Inc., which is now the leading bleach producer in the Republic
of Korea. During fiscal year 1994, the Company made two
acquisitions of bleach businesses in Chile and reached a
definitive agreement to acquire the leading scrubber pad
and stain remover business in Argentina, the acquisition of
which was completed in July 1994. The Company is in the
process of completing a merger of its Argentine subsidiaries,
following the increase of the Company's ownership of its
Argentine operations which occurred at the end of fiscal
year 1993.
(b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS.
The Company's operations are predominantly in one segment
- -- non-durable household consumer products. Such
operations include the production and marketing of
non-durable consumer products sold primarily through
grocery and other retail stores. Financial information
for the last three fiscal years attributable to the
Company's operations is set forth in the Consolidated
Financial Statements, pages 20 through 29 of the
Annual Report, incorporated herein by this reference.
(c) NARRATIVE DESCRIPTION OF BUSINESS.
PRINCIPAL PRODUCTS. Products currently marketed in the
United States and certain foreign countries are listed
on page 36 of the Annual Report, incorporated herein
by this reference.
PRINCIPAL MARKETS - METHODS OF DISTRIBUTION. Most
non-durable household consumer products are
nationally advertised and sold within the United
States to grocery stores through a network of
brokers that was reduced through consolidation during
fiscal year 1994, and to mass merchandisers, warehouse clubs,
military and other retail stores primarily through
a direct sales force. The Company also sells,
within the United States, institutional versions of specialty
food and non-food products. Outside the United States, the
Company sells consumer products through subsidiaries,
licensees, distributors and joint venture arrangements
with local partners.
SOURCES AND AVAILABILITY OF RAW MATERIALS. The Company
has obtained ample supplies of all required raw materials
and packaging supplies, which, with a few exceptions,
were available from a wide variety of sources during
fiscal year 1994. Contingency plans have been developed
for single sourced supplier materials. No supply problems
are presently anticipated.
PATENTS AND TRADEMARKS. Although some products are
covered by patents, the Company does not believe that
patents, patent licenses or similar arrangements are
material to its business. Most of the Company's brand
name consumer products are protected by registered
trademarks. Its brand names and trademarks are extremely
important to its business and the Company pursues a
course of vigorous action against apparent infringements.
SEASONALITY. The only portions of the operations of the
Company which have any significant degree of seasonality
are the marketing of charcoal briquets and insecticides.
Most sales of these product lines occur in the third and
fourth fiscal quarters. Working capital to carry
inventories built up in the off-season and to extend
terms to customers is generally provided by internally
generated funds plus commercial paper lines of credit.
CUSTOMERS AND ORDER BACKLOG. During fiscal year 1994,
revenue from the Company's sales of its products to
Wal-Mart Stores, Inc. and its affiliated companies
exceeded 10% of the Company's gross consolidated
revenues. Except for this relationship, the Company is
not dependent upon any other single customer or a
few customers. Order backlog is not a significant
factor in the Company's business.
RENEGOTIATION. None of the Company's operations is
subject to renegotiation or termination at the election
of the Federal government.
COMPETITION. The markets for consumer products are highly
competitive and most of the Company's products compete
with other nationally advertised brands within each
category, and with "private label" brands and "generic"
non-branded products of grocery chains and wholesale
cooperatives. Competition is encountered from similar
and alternative products, many of which are produced
and marketed by major national concerns having financial
resources greater than those of the Company.
A newly introduced consumer product (whether improved or
newly developed) usually encounters intense competition
requiring substantial expenditures for advertising and
sales promotion. If a product gains consumer acceptance,
it normally requires continuing advertising and promotional
support to maintain relative market position.
RESEARCH AND DEVELOPMENT. The Company's operations
incurred expenses of approximately $44,558,000 in fiscal
year 1994, $42,445,000 in fiscal year 1993 and
$42,052,000 in fiscal year 1992 on research activities
relating to the development of new products or the maintenance
and improvement of existing products. None of such research
activity was customer sponsored.
ENVIRONMENTAL MATTERS. The Company does not anticipate
making material capital expenditures in the future for
environmental control facilities or to comply with
environmental laws and regulations. However, in general,
the Company does anticipate spending increasing amounts
annually for facility upgrades and for environmental
programs. The amount of capital expenditures for
environmental compliance was not material in fiscal
year 1994 and is not expected to be material in the
next fiscal year.
In addition, the Company is involved in certain
other environmental matters, as follows:
(i) The Company sold its architectural coatings business
in fiscal year 1990. In connection with the disposition
of those manufacturing facilities, the Company retained
responsibility for certain environmental obligations.
The financial reserve established at the time of the
sale is expected to be adequate to cover the financial
responsibilities for environmental matters which may
arise in the future.
(ii) The Company has been named as a potentially
responsible party ("PRP") by the Environmental Protection
Agency pursuant to the Spill Compensation and Control
Act, the Sanitary Landfill Closure and Contingency Fund
Act, and a section of the Solid Waste Management Act,
for two sites in New Jersey. Based on the Company's
experience and because the Company's level of
involvement is extremely limited, the Company does not
expect that these matters will represent a material
cost to the Company in the future.
(iii) The Company received a "No Further Action"
letter regarding New Jersey Industrial Site Recovery
Act requirements related to the sale of its Jersey
City, New Jersey manufacturing facility, which occurred
during fiscal year 1994. The Company does not expect
that the cost of any future environmental liability
in connection with the sale of this facility will
be material.
(iv) The Company operates a water treatment
operation at its former Oakland, California
manufacturing location. This operation will be
an on-going cost for the foreseeable future. A
financial reserve established in an earlier year
is considered by management to be adequate to
cover the future costs of this water treatment
operation.
(v) During fiscal year 1994, the Company executed an
"Administrative Order on Consent" indicating its
willingness to participate in a "de minimis"
settlement offer relating to its alleged involvement at
the American Chemical Services site in Griffith, Indiana.
The Company does not expect the settlement to represent
a material cost in the future.
(vi) The Company has been identified as a PRP by the
Environmental Protection Agency for a site in Johnson
County, Kansas. The Company is currently negotiating a
settlement of this matter, which is not expected to
represent a material cost to the Company.
(vii) The Company has incurred environmental remediation
costs at one of its facilities in Chicago, Illinois,
which are not material. The Company is seeking
reimbursement of all these costs from an adjacent
property owner.
(viii) The Company has announced that it contemplates
the sale of its Dyersburg, Tennessee manufacturing facility
and its Frederick, Maryland manufacturing facility.
Customary environmental investigations are being conducted
in conjunction with the contemplated sales of these sites.
The Company does not expect that material environmental
liabilities will be identified, and accordingly has not
recorded any loss contingencies.
(ix) The Company has been named in a private action
by a party seeking contribution by the Company for
remediation costs relating to a site that the Company
may have formerly been associated with in Dickinson
County, Michigan. Although the parties are currently
in the discovery process and the basis for the Company's
potential liability has not yet been clearly
identified, the Company does not expect that this
matter will represent a material cost in the future.
Although the potential cost to the Company related to
the above ongoing environmental matters is uncertain
due to such factors as: the unknown magnitude of possible
pollution and clean-up costs; the complexity and evolving
nature of governmental laws and regulations and their
interpretations; and the timing, varying costs and
effectiveness of alternative clean-up technologies; based
on its experience and without offsetting for expected
insurance recoveries or discounting for present value,
the Company does not expect that such costs individually
and in the aggregate will represent a material cost to
the Company or affect its competitive position.
NUMBER OF PERSONS EMPLOYED. At the end of fiscal year 1994,
approximately 4,850 persons were employed by the Company's
continuing operations.
(d) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC
OPERATIONS AND EXPORT SALES.
Net sales, pretax earnings and identifiable assets
related to foreign operations and export sales are
each below l0% of the respective consolidated amounts
for the Company for fiscal year 1994, have been below
these levels for the two preceding fiscal years, but
may not be indicative of future levels due to the
Company's strategy to expand its international operations.
ITEM 2. PROPERTIES
PRODUCTION FACILITIES. The Company operates production
and major warehouse facilities for its operations in
approximately 30 locations in the United States, Puerto Rico,
Canada, Mexico, Argentina, Chile and the Republic of Korea.
The vast majority of the space is owned. Some space,
mainly for warehousing, is leased. The facility in Jersey
City, New Jersey was sold during fiscal year 1994. The
Frederick, Maryland facility was closed in August 1994.
As part of the acquisition of S.O.S in fiscal year 1994,
the Company acquired two facilities, one in the United States
and the other in Canada. The Canadian S.O.S facility is
scheduled to be closed in fiscal year 1995. The Company
considers its manufacturing and warehousing facilities to
be adequate to support its business.
OFFICES AND TECHNICAL CENTER. The Company's general office
building is owned and is located in Oakland, California. The
Company also occupies leased office space in Oakland one
block from its general office building. The Company's
Technical Center and Data Center are owned and are located
in Pleasanton, California. Leased sales and other office
facilities are located at a number of manufacturing and
other locations.
ENCUMBRANCES. None of the Company's owned facilities
are encumbered to secure debt owed by the Company, except
that the manufacturing facility in Wheeling, Illinois
secures industrial revenue bond indebtedness incurred in
relation to the construction thereof.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS
None.
EXECUTIVE OFFICERS OF THE REGISTRANT
The names, ages and current positions of the executive
officers of the Company are set forth below:
<TABLE>
<CAPTION>
Name (Age) and Year Elected to
Current Position Title and Current Position(s)
<S> <C> <C> <C>
G. C. Sullivan (54) 1992 Chairman of the Board, Chief Executive Officer
and President
W. F. Ausfahl (54) 1983 Group Vice President and Chief
Financial Officer
E. A. Cutter (55) 1992 Senior Vice President-General Counsel
and Secretary
N. P. DeFeo (48) 1993 Group Vice President-U.S. Operations
R. A. Llenado (47) 1992 Group Vice President-Technical
P. N. Louras, Jr. (44) 1992 Group Vice President
A. W. Biebl (44) 1992 Vice President-Manufacturing, Engineering and
Distribution
J. M. Brady (40) 1993 Vice President-Human Resources
J. O. Cole (53) 1992 Vice President-Corporate Affairs
R. T. Conti (39) 1992 Vice President-International
L. Griffey (58) 1993 Vice President-International
Manufacturing
G. E. Johnston (47) 1993 Vice President-Kingsford Products Division
R. C. Klaus (49) 1990 Vice President-Professional Products
D. C. Murray (58) 1989 Vice President-Household Products
L. S. Peiros (39) 1993 Vice President-Corporate Marketing
Services
J. D. M. Robertson (42) 1993 Vice President-Foods Products Division
K. M. Rose (45) 1993 Vice President-Treasurer
H. J. Salvo, Jr. (46) 1991 Vice President-Controller
B. A. Sudbury (47) 1992 Vice President-Research and
Development
F. A. Tataseo (40) l994 Vice President-Sales
E. N. Wheeler (55) l992 Vice President-Health, Safety
and Environment
C. E. Williams (45) 1993 Vice President-Information Services
</TABLE>
There is no family relationship between any of the above
named persons, or between any of such persons and any of
the directors of the Company or any persons nominated
for election as a director of the Company. See Item 10 of
Part III of this Form 10-K.
The current term of office of each officer is from the
date of the officer's election to the date of the first
Board of Directors' meeting following the next Annual
Meeting of Stockholders or until the officer's successor
is elected, subject to the power of the Board of Directors
to remove any officer at any time.
W. F. Ausfahl and D.C. Murray have been employed by the
Company for at least the past five years in the same
respective positions as listed above. The other executive
officers have held the respective positions described below
for at least the past five years:
G. C. Sullivan joined the Company in 1971 in the sales
department of Household Products. Prior to his election
as Chairman of the Board, Chief Executive Officer and
President in 1992, he was Group Vice President from 1989
through 1992 and Vice President-Household Products from
1984 through 1989.
E. A. Cutter joined the Company in June 1983 as Vice
President-General Counsel and Secretary. He held this
position through June 1, 1992, when he was elected
Senior Vice President-General Counsel and Secretary,
with additional responsibility for the Company's
government affairs and community affairs functions.
N. P. DeFeo joined the Company in June 1993 as Group Vice
President-U.S. Operations. Previously, he had been with
The Procter & Gamble Company for 25 years. His last position
there was as Vice President and Managing Director of
Worldwide Strategic Planning, Laundry and Cleaning Products.
R. A. Llenado joined the Company in September 1991 as Group
Vice President. Prior to joining the Company, he was Vice
President, Research and Development, L & F Products, Inc.
(formerly Lehn & Fink Products Group, a subsidiary of
Eastman Kodak Co.) from 1988 to 1991.
P. N. Louras, Jr. joined the Company in April 1980 as Manager,
Analysis and Control, Kingsford Products. Prior to his
election as Group Vice President effective June 1, 1992,
he was Vice President-International from August 1990
through May 1992, Vice President-Controller from July
1988 through August 1990 and Controller, Household
Products from 1987 through July 1988.
A. W. Biebl joined the Company in 1981 as Manufacturing
Manager, Food Service. Prior to his election as Vice
President-Manufacturing, Engineering and Distribution
effective June 1, 1992, he was Vice President-Kingsford
Products from 1989 through May 1992 and Vice President-Food
Service Products from 1985 through 1989.
J. M. Brady joined the Company in 1976 as a brand assistant
in Marketing, Household Products. From November 1991
until her election as Vice President-Human Resources in
September 1993, she was Vice President-Corporate
Marketing Services. She was director of Corporate
Marketing Services from August 1991 through November
1991, Director of Marketing, Kingsford Products from
1989 through August 1991 and held various marketing
positions for Household Products and Kingsford
Products from 1987 through 1989.
J. O. Cole joined the Company in 1973 as an attorney in
its Legal Services Department. He has served in
numerous capacities in that Department and was named
Associate General Counsel in 1992. In November 1992, he
was elected to the position of Vice President-Corporate
Affairs.
R. T. Conti joined the Company in 1982 as Associate Region
Sales Manager, Household Products. Prior to his election
as Vice President-International effective June 1, 1992, he
was Area General Manager-International for Europe, Middle
East and Africa from 1990 through May 1992 and Manager of
Sales Planning for Household Products from 1987 through 1990.
G. E. Johnston joined the Company in July 1981 as Regional
Sales Manager-Special Markets. Prior to his election as
Vice President-Kingsford Product Division effective
November 17, 1993, he was Vice President-Corporate
Development from June 1992 through November 16, 1993,
and Director of Corporate Development from 1991 through
May 1992, and Director of Business Development from
September 1989 through 1991.
R. C. Klaus joined the Company in 1977 as Region Sales
Manager-Household Products. He was elected as Vice
President-Food Service Products in May 1990 and his title
was changed to Vice President-Professional Products in
July 1993 when the Food Services division was renamed
the Professional Products division; and he was General
Manager-Food Service Products from May 1989 through
May 1990.
L. S. Peiros joined the Company in 1982 and was elected
Vice President-Corporate Marketing Services effective
September 1993. From June 1992 until his election to
his current position he was Director of Marketing-Household
Products and from August 1991 through June 1992 he was
Director of Marketing-Kingsford Products. Prior to that
he had served in various marketing positions in both
Household Products and Kingsford Products.
J. D. M. Robertson joined the Company in 1977 as
Marketing Manager of The Clorox Company of Canada, Ltd.
Prior to his election as Vice President-Food Products
Division effective November 17, 1993, he was Vice
President-Kingsford Products from June 1992 through
November 16, 1993, and Director of Marketing, Household
Products from 1989 through May 1992.
K. M. Rose joined the Company in 1978 as a financial analyst.
Prior to her election as Vice President-Treasurer effective
July 15, 1992, she was Controller, Household Products from
July 1988 through July 1992. Beginning October 1, 1994, she
will also have responsibility for the Company's investor
relations and risk management functions.
H. J. Salvo, Jr. joined the Company in 1972 as a staff
accountant. Prior to his election as Vice President-Controller
in November 1990, he was Director of Business Development
from October 1989 through September 1990 and had served
as Controller for three of the Company's operating units
from 1983 through September 1989.
B. A. Sudbury joined the Company in 1978 as Project Leader
in Research and Development. Prior to his election as
Vice President-Research and Development effective June 1,
1992, he was Director of Research and Development, Household
Products from 1985 through May 1992.
F. A. Tataseo will join the Company in October 1994 as
Vice President-Sales. Previously, he was employed by
The Pillsbury Company (Division of Grand Metropolitan Inc.)
as Vice President, Sales (March - September 1994), and as
Vice President, Direct Sales Force (June 1993 - February
1994); and by The Procter & Gamble Company as Sales
Merchandising Division Manager, Soap Sector (May 1992 -
May 1993); as Division Sales Manager, Laundry Products
Category (November 1990 - April 1993); and as Division
Sales Manager, Fabric Care Category (July 1988 -
October 1990).
E. N. Wheeler joined the Company in 1973 as Manager of
Food Product Development. Prior to his election as
Vice President-Health, Safety and Environment effective
June 1, 1992, he was Vice President-Research and
Development from 1981 through May 1992.
C. E. Williams joined the Company in May 1993 as Vice
President-Information Services. From 1987 until he
joined the Company, Mr. Williams was Director of
Information Services of the Fritz Companies, Inc.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND
RELATED STOCKHOLDER MATTERS
(a) MARKET INFORMATION.
The principal markets for Clorox Common Stock are the
New York and Pacific Stock Exchanges. The high and
low sales prices quoted for New York Stock Exchange-Composite
Transactions Report for each quarterly period during the
past two fiscal years appears under "Quarterly Data,"
page 32 of the Annual Report, incorporated herein by
this reference, and on July 29, 1994, the closing
price for the Company's stock was $49.75 per share.
(b) HOLDERS.
The approximate number of record holders of Clorox Common
Stock as of July 29, 1994 was 12,539 based on information
provided by the Company's transfer agent.
(c) DIVIDENDS.
The amount of quarterly dividends paid with respect to
Clorox Common Stock during the past two fiscal years
appears under "Quarterly Data," page 32 of the Annual
Report, incorporated herein by this reference.
ITEM 6. SELECTED FINANCIAL DATA
This information appears under "Financial Summary," pages
30 and 31 of the Annual Report, incorporated herein by
this reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATION
This information appears under "Management's Discussion
and Analysis," pages 18 and 19 of the Annual Report,
incorporated herein by this reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
These statements and data appear on pages 18 through 28 and
32 of the Annual Report, incorporated herein by
this reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM l0. DIRECTORS AND EXECUTIVE OFFICERS OF
THE REGISTRANT
Information regarding each nominee for election as a
director, including those who are executive officers of
the Company, appears under "Nominees for Election as
Directors" of the definitive Proxy Statement of the
Company, which will be filed with the United States
Securities and Exchange Commission within 120 days after
the end of the registrant's fiscal year ended June 30,
1994 ("Proxy Statement"), incorporated herein by
this reference.
Pursuant to Instruction 3 to Item 401(b) of
Regulation S-K, information regarding the executive
officers of the registrant is reported in Part I of
this Report.
The information required by Item 405 of Regulation
S-K appears under "Compliance with Section 16(a) of
the Exchange Act" of the Proxy Statement, incorporated
herein by this reference.
ITEM ll. EXECUTIVE COMPENSATION
The information required by Item 402 of Regulation S-K
appears under "Organization of the Board of Directors,"
Employee Benefits and Management Compensation Committee
Report on Compensation," "Summary Compensation Table,"
"Options and Stock Appreciation Rights," "Comparative
Stock Performance," "Pension Plan," and "Supplemental
Executive Retirement Plan" of the Proxy Statement,
all incorporated herein by this reference.
ITEM l2. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
(a) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS.
Information concerning the only entity or person known
to the Company to be the beneficial owner of more than
5% of its Common Stock appears under "Beneficial
Ownership of Voting Securities" of the Proxy Statement,
incorporated herein by this reference.
(b) SECURITY OWNERSHIP OF MANAGEMENT.
Information concerning the beneficial ownership of
the Company's Common Stock by each nominee for
election as a director appears under "Nominees for
Election as Directors" of the Proxy Statement and
by all directors and executive officers as a group
appears under "Beneficial Ownership of Voting Securities"
of the Proxy Statement, both incorporated herein by
this reference.
ITEM l3. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
Information concerning transactions with directors,
nominees for election as directors, management and
the beneficial owner of more than 5% of the Company's
Common Stock appears under "Beneficial Ownership of
Voting Securities" of the Proxy Statement, incorporated
herein by this reference.
PART IV
<TABLE>
<CAPTION>
ITEM l4. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K
<S> <C> <C> <C> <C> <C>
(a) (1) Financial Statements: Page
Financial Statements and Independent Auditors' Report Copy
included in the Annual Report, incorporated herein by this Included
reference:
Statements of Consolidated Earnings for the years
ended June 30, 1994, l993 and l992
Consolidated Balance Sheets, June 30, 1994 and l993
Statements of Consolidated Stockholders' Equity for
the years ended June 30, 1994, l993 and l992
Statements of Consolidated Cash Flows for the years
ended June 30, 1994, l993 and l992
Notes to Consolidated Financial Statements
Independent Auditors' Report
Quarterly Data
(2) Financial Statement Schedules as of June 30, 1994
or for the years ended June 30, 1994, l993 and l992, as applicable:
Independent Auditors' Report on Financial Statement 17
Schedules
I Short-Term Investments 18
V Property, Plant and Equipment 19
VI Accumulated Depreciation and Amortization of 20
Property, Plant and Equipment
VIII Valuation and Qualifying Accounts and Reserves 21
IX Short-Term Borrowings 22
X Supplementary Income Statement Information 23
Other schedules have been omitted because of the absence
of conditions under which they are required, or because
the information is shown elsewhere in this Form 10-K.
(3) Executive Compensation Plans and Arrangements:
Stock Option Plan (1977), amended 10/16/80, 7/21/82, 6/21/83,
10/19/83 and 11/17/93 (Exhibit 10(i) to Annual Report on Form 10-K
for the year ended June 30, 1994)
Long-Term Compensation Program dated October 21, 1987,
amended 11/17/93 (Exhibit 10(ii) to Annual Report on Form 10-K
for the year ended June 30, 1994)
Officer Employment Contract (form) (Exhibit 10(ix) to Annual Report
on Form 10-K for the year ended June 30, 1993)
Supplemental Executive Retirement Plan dated July 17, 1991 (Exhibit 10(x)
to Annual Report on Form 10-K for the year ended June 30, 1993)
(b) Current Reports on Form 8-K during the fourth quarter of fiscal year 1994:
None.
(c) Exhibits:
Index to Exhibits follows.
(d) (Not applicable)
Index to Exhibits
(2) (Not applicable)
(3) (i) Certificate of Incorporation dated October 22, 1986 (filed as Exhibit (3)(i) to Annual Report on Form 10-K
for the year ended June 30, 1987, incorporated herein by this reference)
(ii)Bylaws dated November 18, 1992 (restated) (filed as Exhibit 3(ii) to Quarterly Report on Form 10-Q for
the quarter ended December 31, 1992, incorporated herein by this reference)
(4) (i) Form of Indenture between the Company and Wachovia Bank & Trust Company, N.A. as Trustee, regarding
$200,000,000 in 8.8% Notes due 2001 (filed as Exhibit 4 to Registration Statement on Form S-3
No. 33-4083 dated May 24, 1991, incorporated herein by this reference)
(ii) Prospectus Supplement (to Prospectus dated July 9, 1991) giving terms of the Indenture referenced in Exhibit
4 (i) above (filed on July 18, 1991, 1991, supplementing the Registration Statement on Form S-3 No.
33-4083 dated May 24, 1991, and incorporated herein by this
reference)
(9) (Not applicable)
(10) Material contracts:
(i) Stock Option Plan (1977) (Amended l0/l6/80, 7/2l/82, 6/2l/83, l0/l9/83, 9/18/85, 11/20/85, 7/15/87
and 11/17/93) (Exhibit 10(i) to Annual Report on Form 10-K for the year ended June 30, 1994)
(ii) Long-Term Compensation Program dated October 21, 1987 (filed as Exhibit 10(ii) to Annual Report
on Form 10-K for the year ended June 30, 1994)
(iii) Agreement between Henkel KGaA and the Company dated June l8, l98l (filed as Exhibit (l0)(v) to
Form 8 dated August ll, l983, incorporated herein by this reference)
(iv) Agreement between Henkel GmbH (now Henkel KGaA) and the Company dated July 3l, l974 (filed as Exhibit
(l0)(vi) to Form 8 dated August ll, l983, incorporated herein by this reference)
(v) Agreement between Henkel KGaA and the Company dated November l6, l98l (filed as Exhibit (l0)(vii)
to Form 8 dated August ll, l983, incorporated herein by this reference)
(vi) Agreement between Henkel KGaA and the Company dated July 16, 1986 (filed as Exhibit B to Current Report
on Form 8-K for March 19, 1987, incorporated herein by this reference)
(vii) Agreement between Henkel KGaA and the Company dated March 18, 1987 (filed as Exhibit A to Current Report
on Form 8-K for March 19, 1987, incorporated herein by this reference)
(viii) Agreement between Henkel KGaA and the Company dated January 16, 1992 (filed as Exhibit 10(xi) to Annual
Report on Form 10-K for the year ended June 30, 1992, incorporated herein by this reference)
(ix) Officer Employment Contract (form) (filed as Exhibit 10(ix) to Annual Report on Form 10-K for the year
ended June 30, 1993, incorporated herein by this reference)
(x) Supplemental Executive Retirement Plan dated July 17, 1991 (filed as Exhibit 10(x) to Annual Report on
Form 10-K for the year ended June 30, 1993, incorporated herein by this reference)
(xi) 1993 Directors' Stock Option Plan dated November 17, 1993 (filed as Exhibit 10(xi) to Annual Report
on Form 10-K for the year ended June 30, 1994)
(11) (Not applicable)
(12) (Not applicable)
(13) Annual Report, following the Financial Statement Schedules of this Form 10-K
(16) (Not applicable)
(l8) (Not applicable)
(21) Subsidiaries of the registrant, following Exhibits 10(i)(ii) and (xi) of this Form 10-K
(22) (Not applicable)
(23) Independent Auditors' Consent, following Exhibit 21 of this Form 10-K
(24) (Not applicable)
(26) (Not applicable)
(27) Financial Data Schedule, following Exhibit 23 of this Form 10-K
(28) (Not applicable)
</TABLE>
SIGNATURES
Pursuant to the requirements of Section l3 or l5(d) of the
Securities Exchange Act of l934, the registrant has duly
caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
THE CLOROX COMPANY
Date: September 21, 1994 By: /s/G. C. Sullivan
G. C. Sullivan, Chairman of the
Board and Chief Executive
Officer
Pursuant to the requirements of the Securities Exchange Act of
l934, this report has been signed below by the following persons
on behalf of the registrant and in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/G.C. Sullivan Chairman of the Board & Director (Chief Executive Officer) September 21, 1994
G. S. Sullivan
/s/W. F. Ausfahl Group Vice President & Director (Principal Financial Officer) September 21, 1994
W. F. Ausfahl
/s/s/D. Boggan, Jr. Director September 21, 1994
D. Boggan, Jr.
/s/J. W. Collins Director September 21, 1994
J. W. Collins
/s/U. Fairchild Director September 21, 1994
U. Fairchild
(signatures continue)
/s/J. Krautter Director September 21, 1994
J. Krautter
/s/J. Manchot Director September 21, 1994
J. Manchot
/s/D. O. Morton Director September 21, 1994
D. O. Morton
/s/E. L. Scarff Director September 21, 1994
/E. L. Scarff
s/L. R. Scott Director September 21, 1994
L. R. Scott
/s/F. N. Shumway Director September 21, 1994
F. N. Shumway
/s/J. A. Vohs Director September 21, 1994
J. A. Vohs
/s/C. A. Wolfe Director September 21, 1994
/s/H. J. Salvo, Jr. Vice President-Controller (Principal Accounting Officer) September 21, 1994
</TABLE>
</PAGE>
<PAGE>
INDEPENDENT AUDITORS' REPORT
ON FINANCIAL STATEMENT SCHEDULES
The Stockholders and the Board of Directors
of The Clorox Company:
We have audited the consolidated financial statements of
The Clorox Company and its subsidiaries as of June 30,
1994 and 1993, and for each of the three years in the
period ended June 30, 1994, and have issued our report thereon
dated August 11, 1994; such consolidated financial statements
and report are included in your 1994 Annual Report to
Stockholders and are incorporated herein by reference. Our
audits also included the financial statement schedules of
The Clorox Company and its subsidiaries listed in
Item 14(a)(2). These financial statement schedules are the
responsibility of the Company's management. Our
responsibility is to express an opinion based on our audits.
In our opinion, such financial statement schedules, when
considered in relation to the basic consolidated financial
statements taken as a whole, present fairly in all material
respects the information set forth therein.
/s/Deloitte & Touche
San Francisco, California
August 10, 1994
</PAGE>
<PAGE>
SCHEDULE I
THE CLOROX COMPANY AND SUBSIDIARIES
SHORT-TERM INVESTMENTS
June 30, 1994
(In thousands)
COLUMN A COLUMN B COLUMN C
Principal Amount
Name of Issuer and of Bonds Cost of
Title of Each Issue <F1> and Notes Each Issue
Eurodollar Time Deposits,
issued by J. P. Morgan $50,624 $50,624
Eurodollar Time Deposits 6,000 6,000
Repurchase Agreements 26,600 26,600
Certificate of Deposits 3,000 3,000
Foreign Government Notes 13 13
Total $85,877 $85,877
======== ========
[FN]
<F1> Names of issuers have been omitted when no security of the
same issuer in the aggregate is more than two percent of
total assets.
Information required by Columns D & E is omitted since
short-term investments are valued at cost, and such cost
approximates market value.
</PAGE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE V
THE CLOROX COMPANY AND SUBSIDIARIES
PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED JUNE 30, 1994, 1993 AND 1992
(In thousands)
- ----------------------------------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
<S> <C> <C> <C> <C> <C>
<F2>
Balance at <F1> Other Balance at
beginning Additions changes - end
Classification of period at cost Retirements add(deduct) of period
- ----------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30, 1994
Land and improvements $57,594 $3,309 $1,860 ($38) $59,005
Buildings 262,198 13,673 13,767 (140) 261,964
Machinery & equipment 443,157 69,930 16,769 (415) 495,903
Construction in progress 51,304 (14,146) 3,496 (12) 33,650
-------- ------- -------- ------ ---------
Total $814,253 $72,766 35,892 ($605) $850,522
========= ======= ======== ====== =========
YEAR ENDED JUNE 30, 1993
Land and improvements $50,214 $7,685 $290 ($15) $57,594
Buildings 243,933 26,090 7,713 (112) 262,198
Machinery & equipment 352,039 110,573 19,237 (218) 443,157
Construction in progress 106,116 (53,314) 1,495 (3) 51,304
-------- ------- -------- ------ ---------
Total $752,302 $91,034 $28,735 ($348) $814,253
========= ======= ======== ====== =========
YEAR ENDED JUNE 30, 1992
Land and improvements $44,651 $6,195 $622 ($10) $50,214
Buildings 232,415 12,412 818 (76) 243,933
Machinery & equipment 319,431 41,415 8,672 (135) 352,039
Construction in progress 52,153 55,738 1,773 (2) 106,116
-------- ------- -------- ------ ---------
Total $648,650 $115,760 $11,885 ($223) $752,302
========= ======= ======== ====== =========
<FN>
<F1> Significant additions in all three years related to expansion of processing and packaging facilities and
equipment.
<F2> Effect of translating property, plant and equipment of foreign subsidiaries using the exchange rates
in effect at the balance sheet date as required by Statement of Financial Accounting Standards No. 52
(see Note 1 to Consolidated Financial Statements, page 24 of the Annual Report, incorporated
herein by this reference).
</TABLE>
</PAGE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE VI
THE CLOROX COMPANY AND SUBSIDIARIES
ACCUMULATED DEPRECIATION AND AMORTIZATION OF PROPERTY, PLANT AND EQUIPMENT
FOR THE YEARS ENDED JUNE 30, 1994, 1993 AND 1992
(In thousands)
- ----------------------------------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
<S> <C> <C> <C> <C> <C>
Additions (1)
Balance at charged to Other Balance at
beginning costs & changes - end
Classification of period expenses Retirements add(deduct) of period
- ----------------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30, 1994
Land and improvements $6,417 $1,196 $498 ($9) $7,106
Buildings 68,354 12,054 4,753 (48) 75,607
Machinery & equipment 201,381 48,410 14,367 (215) 235,209
-------- ------- ------- ------ --------
Total $276,152 $61,660 $19,618 ($272) $317,922
======== ======= ======= ====== ========
YEAR ENDED JUNE 30, 1993
Land and improvements $5,468 $943 ($14) ($8) $6,417
Buildings 59,179 11,877 2,665 (37) 68,354
Machinery & equipment 179,026 38,712 16,200 (157) 201,381
-------- ------- ------- ------ --------
Total $243,673 $51,532 $18,851 ($202) $276,152
======== ======= ======= ====== ========
YEAR ENDED JUNE 30, 1992
Land and improvements $4,835 $771 $133 ($5) $5,468
Buildings 49,151 10,845 794 (23) 59,179
Machinery & equipment 152,870 32,851 6,602 (93) 179,026
-------- ------- ------- ------ --------
Total $206,856 $44,467 $7,529 ($121) $243,673
======== ======= ======= ====== ========
<FN>
<F1> Effect of translating property, plant and equipment of foreign subsidiaries using the exchange
rates in effect at the balance sheet date as required by Statement of Financial Accounting
Standards No. 52 (see Note 1 to Consolidated Financial Statements, page 24 of the Annual Report,
incorporated herein by this reference).
Depreciation - Rates used to compute depreciation are generally as follows:
Land improvements 3-1/3% to 10%
Buildings 2-1/2% to 10%
Machinery and equipment 5% to 33-1/3%
</TABLE>
</PAGE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE VIII
THE CLOROX COMPANY AND SUBSIDIARIES
VALUATION AND QUALIFYING ACCOUNTS AND RESERVES
FOR THE YEARS ENDED JUNE 30, 1994, 1993 AND 1992
(In thousands)
- -----------------------------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C (1) COLUMN C (2) COLUMN D COLUMN E
Additions Additions
Balance Charged to Charged to Balance as
beginning Costs and Other end of
Description of period Expenses Accounts Deductions period
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
YEAR ENDED JUNE 30, 1994 N/A N/A
YEAR ENDED JUNE 30, 1993 N/A N/A
YEAR ENDED JUNE 30, 1992
Inventories valuation
allowance resulting
from restructuring $3,516 $3,516 0
</TABLE>
</PAGE>
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE IX
THE CLOROX COMPANY AND SUBSIDIARIES
SHORT-TERM BORROWINGS
FOR THE YEARS ENDED JUNE 30, 1994, 1993 AND 1992
(In thousands)
- -------------------------------------------------------------------------------------------------
COLUMN A COLUMN B COLUMN C COLUMN D COLUMN E COLUMN F
<S> <C> <C> <C> <C> <C>
Weighted
Maximum Average Average
Category of Weighted Amount Amount Interest
Aggregate Balance Average Outstanding Outstanding Rate
Short-Term at End Interest During During During the
Borrowing <F1> of Period Rate the Period the Period<F2> Period <F3>
- -------------------------------------------------------------------------------------------------
YEAR ENDED JUNE 30, 1994
Commercial Paper and
Other $42,916 <F4> 4.43% $173,185 $59,186 3.50%
YEAR ENDED JUNE 30, 1993
Commercial Paper and
Other $39,486 <F4> 3.14% $112,999 $79,203 3.25%
YEAR ENDED JUNE 30, 1992
Commercial Paper $77,410 3.86% $178,816 $153,952 4.86%
<FN>
<F1> These are temporary borrowings with maturity term from 1 to 91 days.
<F2> Computed as the average of ending daily balances outstanding.
<F3> Computed based upon average daily balances outstanding.
<F4> Amounts include commercial paper of $34,855 and $34,941, and short-term notes payable to banks of
$8,061 and $4,544 at June 30, 1994 and 1993, respectively.
</TABLE>
</PAGE>
<PAGE>
SCHEDULE X
SUPPLEMENTARY INCOME STATEMENT INFORMATION
FOR THE YEARS ENDED JUNE 30, 1994, 1993 AND 1992
(In thousands)
- ----------------------------------------------------------------
COLUMN A Column B
Charged to costs and expenses
Item 1994 1993 1992
- ----------------------------------------------------------------
Maintenance and repairs $31,300 $29,700 $29,900
Items not shown above are reported in the related consolidated
financial statements or have been omitted because they do not
exceed 1% of total net sales.
</PAGE>
<PAGE>
APPENDIX
(to Form 10-K)
The following items have been filed under cover of Form SE:
1. Page 18 - Bar Chart entitled "Clorox Value Measure",
showing the economic value measurement of the Company over
the period of the last five fiscal years.
2. Page 19 - Bar Chart entitled "Cash Provided, Continuing
Operations."
THE CLOROX COMPANY STOCK OPTION PLAN (1977)
(Amended 10/16/80, 7/21/82, 6/21/83, 10/19/83,
9/18/85, 11/20/85, 7/15/87 and 11/19/93)
ARTICLE A -- PURPOSE
The purpose of The Clorox Company Stock Option Plan (1977) is
to encourage those key employees of The Clorox Company
(the "Company") and affiliated companies who are largely
responsible for the success and development of the business
to increase their proprietary interest in the Company by
the allotment and sale to them by the Company of shares of
Clorox Common Stock as provided in this Plan.
ARTICLE B -- SALE OF SHARES
The allotment and sale of shares of Clorox Common Stock
shall be made through the granting of options to purchase
said shares in accordance with and subject to the terms
and restrictions of this Plan. Such options may or may
not qualify as "Incentive Stock Options" under Section
422A of the Internal Revenue Code (as it may hereafter
from time to time be amended). (Amended 7/21/82).
ARTICLE C -- NUMBER OF SHARES TO BE SOLD THROUGH OPTIONS
The aggregate number of shares of Clorox Common Stock
which may be issued under all options to be granted
pursuant to this Plan shall not exceed one million
nine hundred thousand (1,900,000) shares. The shares
to be delivered upon exercise of options granted under
this Plan shall be made available at the discretion of
the Board of Directors of the Company (the "Board")
out of either authorized and unissued shares or
treasury shares. (Amended 10/19/83).
ARTICLE D -- ADMINISTRATION OF PLAN
1. This plan shall be administered by the committee of
the Board (the "Committee") designated by it for that
purpose. The Committee shall be composed of three or
more members of the Board who are not officers or
employees of the Company or an affiliated company, to
be appointed by the Board from time to time and to
serve at the pleasure of the Board.
2. It shall be the duty of the Committee to administer
this Plan in accordance with its provisions, to report
thereon not less than once each year to the Board, and
to make such recommendations of amendments or otherwise
as it may deem necessary. A decision by a majority of
the Committee shall govern all actions of the Committee.
Members of the Committee shall not be eligible to receive
options under this Plan while serving, but may exercise
options previously granted in accordance with the terms
of said options.
3. Subject to the express provisions of this Plan, the
Committee shall have authority to grant options, to
construe the respective option agreements and this Plan,
to determine the terms and provisions of the respective
option agreements including the setting of the dates
when the option or parts of it may be exercised, and
to make all other determinations necessary or advisable
for administering this Plan. If an option is intended
to qualify as an Incentive Stock Option, the option
agreement shall contain those terms and conditions
necessary to so qualify said option. (Amended 7/21/82).
4. The Committee may establish from time to time such
regulations, provisions, and procedures, within the
terms of this Plan as, in its opinion, may be advisable
in the administration of this Plan.
5. The Committee may designate the Secretary of the
Company or other employees of the Company to assist
the Committee in the administration of this Plan and
may grant authority to such persons to execute
documents on behalf of the Committee.
6. The Committee shall have the authority to grant options
consistent with the terms and conditions of this Plan,
but which may contain other provisions satisfying the
conditions of any applicable law or regulation
affording the option or the optionee favorable
treatment for specified purposes.
ARTICLE E -- PARTICIPATION
The Committee shall select those key employees of the Company
and affiliated companies who, in the opinion of the Committee,
have demonstrated a capacity for contributing in a
substantial measure to the success of the Company, and
shall determine the number of shares with respect to which
options are to be granted to each.
ARTICLE F -- OPTION PRICE
The option price shall be established by the Committee as of
the date the option is granted and shall be not less than
100% of the fair market value of such shares on the day
such option is granted.
ARTICLE G -- CONDITION OF OPTIONS
The fact that an employee has been granted an option under
this Plan shall not affect or qualify the right of the
employer to terminate his employment at any time.
ARTICLE H -- NUMBER OF OPTIONS
More than one option may be granted to any employee
under this Plan.
ARTICLE I -- ADJUSTMENT
Appropriate adjustments in the number of shares which can be
issued (ARTICLE C), and in the numbers and option prices of
shares covered by outstanding options granted hereunder,
shall be made to give effect to any stock splits, stock
dividends, or other changes in the stock of the Company.
ARTICLE J -- EXERCISE OF OPTIONS
1. Any stock option granted by the committee shall have a
maximum life of ten (10) years from the date of grant.
2. No option granted under this Plan shall be exercisable
within one (1) year from the date of grant.
3. In case an optionee ceases to be an employee of the
Company or any of its affiliated companies while
holding an unexercised option:
(a) Any unexercisable portions of the option are then
void except in case of death of the optionee.
(b) Except in case of death or retirement of the
optionee, any exercisable portions of an option
shall terminate and be no longer exercisable
unless exercised before the expiration date
of the option or within three (3) months of
the date of such cessation, whichever is earlier.
(Amended 10/16/80).
4. When an employee retires, in accordance with the
provisions of any appropriate profit sharing or
retirement plan of the Company or any of its
affiliated companies, any options shall become
immediately exercisable at any time prior to the
expiration date of the options or within a period
following the employee's retirement date specified
from time to time by the Committee, whichever
period is shorter. Termination of employment
under the permanent disability settlement
provision of any such plan shall be deemed the
same as retirement. (Amended 11/17/93)
If the Compensation Committee changes the time
period following Retirement in which an Option
may be exercised, the change will not (i) have the
effect of shortening the exercise period of Options
held by persons who retired before the effective
date of the Compensation Committee's action, to (ii)
make exercisable any Option which had expired pursuant
to an exercise time period previously set by the
Compensation Committee. (Added 11/17/93)
5. Options are not transferable otherwise than by will
or by the laws of descent and distribution.
6. In case of the death of the optionee while an employee
of the Company or any of its affiliated companies,
the persons to whom the options have been transferred
by will or by the laws of descent and distribution
shall have the privilege of exercising remaining
options or parts thereof (whether or not exercisable
on the date of the death of such employee) at any
time prior to the expiration date of the option or
within one (1) year of the date of death of the
optionee, whichever is earlier. Otherwise, any option
may be exercised only by the optionee personally or
by his legal representative.
7. The Committee may, in its sole discretion, permit an
option which is being exercised either (a) by an
optionee who has retired due to permanent disability or
(b) after the death of the optionee, as provided in
paragraphs 4 and 6 above, to be surrendered, in lieu
of exercise, for an amount equal to the difference
between the option price and the fair market value,
if higher, of shares of Clorox Common Stock on the
day the option is surrendered, payment to be made
in shares of Clorox Common Stock valued at their
fair market value on such date, cash or a combination
thereof, in such proportion and upon such other terms
and conditions as shall be determined by the Committee.
The difference between the number of shares subject to
options so surrendered and the number of shares,
if any, issued upon exercise shall represent shares
which shall not be available for granting future options
under this Plan.
8. The Committee may, in its sole discretion, permit an
option which is being exercised by an optionee who is
subject to the provisions of Section 16(b) of the
Securities Exchange Act of 1934, as amended, to be
surrendered in part in lieu of exercise and exercised
in part as follows: not less than 50% of the number
of shares being exercised must be paid for at the
option price; and the remaining number of shares
may be surrendered for an amount per share equal
to the difference between the option price and the
fair market value of shares of Clorox Common Stock
on the day the option is so surrendered, payable by
the Company in cash but in no event shall the amount
paid per share exceed 100% of the option price of the
shares so surrendered. The number of shares so
surrendered, as well as the shares issued, shall
represent shares which shall not be available for
granting future options under this Plan.
9. Notwithstanding the foregoing, time spent on leave of
absence shall be considered as employment for the
purposes of this Plan. Leave of absence means any
period of time away from work granted to an employee
by the employer because of illness or injury or
because of other reasons satisfactory to the employer.
10. A certificate or certificates for the shares purchased
through the exercise of options will be issued in
regular course after exercise of the option and
payment therefore The Company reserves the right
from time to time to suspend the exercise of any
option for a period not to exceed thirty (30) days
where such suspension is required for corporate
purposes. No such suspension shall extend the
life of the option beyond its expiration date and,
in no event, will there be a suspension in the five
calendar days immediately preceding the expiration
date.
11. On exercise of an option, payment of the option price
may be made (a) in cash or (b) in shares of Clorox
Common Stock valued at their fair market value on
the date of such payment, or a combination thereof.
Certificate(s) for such shares tendered in payment
shall be in a form for good delivery and the optionee
must have held the tendered shares for at least one
year. In addition, after July 1, 1983, (i) only an
optionee who is not at the time subject to the
provisions of Section 16(b) of the Securities Exchange
Act of 1934, as amended, may pay the option price in
shares receivable upon exercise of the option being
exercised, valued at their fair market value on the
date of such payment plus cash for any resulting
fraction of a share, and only with respect to options
outstanding on June 30, 1983; and (ii) no option
granted will be exercisable in the manner described in
(i) hereof. (Amended 6/21/83).
12. The Company shall have the power to withhold, or require
an optionee to remit to the Company, an amount sufficient
to satisfy any federal, state, local or foreign
withholding tax requirements on any non-qualified stock
option exercised pursuant to the Plan.
To the extent permissible under applicable tax,
securities, and other laws, the Company may, in its
sole discretion, permit the optionee to satisfy a tax
withholding requirement by directing the Company to
apply shares of stock to which the optionee is entitled
as a result of the exercise of an option other than an
Incentive Stock Option, to satisfy such requirement.
(Added 7/15/87).
ARTICLE K -- ADDITIONAL PROVISIONS
1. The Board may at any time repeal this Plan and may
amend it from time to time. The optionee and the
Company shall be bound by any such amendments as of
their effective dates, but if any outstanding options
are affected, notice thereof shall be given to the
holders of such options and such amendments shall not
be applicable to any option without the consent of the
optionee. If this Plan is repealed in its entirety,
any unexercised option shall continue to be exercisable
in accordance with its terms.
2. Should any option expire, cease to be exercisable or
be otherwise canceled without being fully exercised,
the number of shares as to which the option has not
been exercised shall thereupon continue to be reserved
for, and be subject to, the granting of options under
this Plan. Such shares may be optioned again to the
employee who had been granted such canceled option
or to other employees at an option price, determined
in accordance with Article F, which may be lower than,
the option price of such canceled option.
3. No shares shall be issued or delivered upon the
exercise of any option unless and until, in the opinion
of Counsel for the Company, any applicable registration
requirements of the Securities Act of 1933, as amended,
any applicable listing requirements of any national
securities exchange on which stock of the same class
is then listed and any other requirements of law or of
any regulatory body having jurisdiction over such
issuance or delivery shall have been fully complied
with.
4. "Affiliated company" means any company controlling,
controlled by or under common control with the Company.
ARTICLE L -- CONSENT OF OPTIONEE
Every optionee shall be bound by the terms and restrictions
of this Plan and his acceptance of an option shall constitute
an agreement between him and the Company or an affiliated
company and any successors in interest to any of them.
ARTICLE M -- PERFORMANCE UNITS (Add 10/16/80)
1. The Committee may from time to time, and subject to the
provisions of this Plan and such other terms and
conditions as the Board or the Committee may prescribe,
grant one or more performance units to any optionee
under the 1977 Plan with respect to options granted
thereunder at any time or to any optionee under the
1968 Plan with respect to outstanding options granted
thereunder and outstanding as of October 17, 1980.
Performance units shall be related (on a one-for-one
basis and with the effect herein set forth) to shares
which are subject to an option granted on or after
October 17, 1980 and to shares which are subject to
an option granted under either Plan outstanding as
of October 17, 1980 but only to the extent then
unexercised.
2. Upon the exercise of any option to which performance
units have been related by grant of the Committee,
there shall be canceled that number of performance
units equal to the sum of the shares issued on
exercise plus the number of shares surrendered in lieu
of exercise.
3. The value of a performance unit and the method of
assigning the value shall be determined by the Committee
at the time of the granting of the performance unit.
The value to be paid shall be based upon the achievement
of criteria of performance over an award period, such
criteria and period to be determined by the Committee
at the time of grant. In its administration of this
Plan, the Committee shall have full discretion to
change from time to time the criteria of performance
with respect to outstanding performance units in
recognition of conditions, events or transactions not
foreseen at the time of grant.
4. At the expiration of the award period determined by
the Committee for each performance unit, the
performance unit value, if any, shall be credited
to an account for the benefit of the optionee who
shall thereafter have a fully vested interest in
that value, with payment deferred as hereafter
provided. Interest shall be credited to that
account at a rate fixed from time to time by the
Committee. Thereafter, if the option to purchase
the related shares is exercised or if the related
shares are surrendered in lieu of exercise, there
shall be charged to the optionee's account the
value of that number of performance units (plus
any interest accrued thereon) equal to the sum of
the shares issued on exercise plus the number of
shares surrendered in lieu of exercise.
5. Payment of the vested performance unit values
(plus any interest accrued thereon) shall be
deferred until the earliest of the following dates
and be made in the manner respectively set forth:
(a) At the expiration of the original term of the
option to purchase the related shares, in the
discretion of the Committee, the value may be
paid up to approximately one-half in full shares of
Clorox Common Stock valued at their fair market
value on the date of such payment and the balance
in cash, or all in cash.
(b) In case an optionee ceases to be an employee of
the Company or any of its affiliated companies,
except in case of death or retirement of the
optionee, in five equal annual cash payments
commencing on the date of such cessation unless
the Committee, in its sole discretion, fixes a
shorter term;
(c) On retirement of the optionee, in cash at any
time elected by the optionee within one (1) year
of the date of retirement;
(d) On death of the optionee, in cash at anytime
elected by the optionee's legal representative
within one (1) year of the date of death.
If vested performance unit values are paid as above,
the number of shares subject to related stock options
shall represent shares which shall not be available for
granting future options under this Plan.
ARTICLE N -- DURATION OF PLAN
This Plan will terminate on October 31, 1987 unless an earlier
termination date is fixed by action of the Board, but any
options granted prior thereto may be exercised in accordance
with their terms.
ARTICLE O -- INCENTIVE STOCK OPTIONS (Add 7/21/82)
1. The provisions of this Article O shall govern all
options granted after July 1, 1982 and designated
by the Committee as "Incentive Stock Options" as defined
in Section 422A of the Internal Revenue Code.
2. Shares acquired pursuant to exercise of an Incentive
Stock Option will be entitled to treatment as such
only if:
(a) no disposition of such shares is made by the
optionee within two (2) years from the date of
granting such option nor within one (1) year
from the date of exercising such option
(i.e., the date shown on the stock certificate;
and (Added 11/20/85)
(b) except in the case of total and permanent
disability, as defined in Article J.4, and
in the case of death, the optionee, at all times
during the period beginning on the date of granting
such option and ending on the day three (3)
months before the date of exercising such
option, was an employee of the company or of an
affiliated company; and (Added 11/20/85)
(c) in the case of total and permanent disability,
the three (3) months period is extended to one
(1) year; and (Added 11/20/85)
(d) in the case of death, the provisions of
Article J.6 apply. (Added 11/20/85)
3. "Incentive Stock Option" means an option designated
as such by the Committee and granted to an employee of
the Company or an affiliated company, provided:
(a) such option is granted under this Plan, as amended;
(b) such option is granted on or before August 8, 1987;
(c) such option by its terms is not exercisable after
the expiration of ten (10) years from the date
such option is granted;
(d) the option price under such option conforms to
Article F hereof;
(e) such option by its terms is not transferable by
the optionee otherwise than by will or the laws
of descent and distribution, and is exercisable
during the optionee's lifetime only by the
optionee;
(f) the optionee at the time such option is granted
does not own stock possessing more than ten (10)
percent of the total combined voting power of all
classes of stock of the Company or of an
affiliated company;
(g) such option by its terms is not exercisable while
there is outstanding any Incentive Stock Option
which was granted before the granting of such
option to the optionee; and
(h) the aggregate fair market value (as of the date
such option is granted) of Clorox Common Stock
covered by all Incentive Stock Options granted in
any calendar year to any optionee shall not
exceed $100,000 plus any unused limit carryover to
such year as defined in Section 422A(c) (4) of the
Internal Revenue Code.
4. In the event that the optionee acquires any shares of
stock pursuant to the exercise of an Incentive Stock
Option, the optionee shall notify the Company within
30 days of any disposition (whether by sale, exchange,
gift, or any other transfer of legal title) which he
shall make of any such shares within the one (1) year
period beginning on the day after the day of exercise
or within the two (2) year period beginning on the day
after the day of granting such option.
5. If any provision of this plan is in conflict with this
Article O, the provision of this Article O shall prevail
with respect to Incentive Stock Options.
j:\be\77sop.sam
THE CLOROX COMPANY
1987 LONG-TERM
COMPENSATION PROGRAM
TABLE OF CONTENTS
Article Section Page
1 Establishment, Purpose,
and Effective Date of
Plan
1.1 Establishment 1
1.2 Purpose 1
1.3 Effective Date 1
2 Definitions
2.1 Definitions 2
2.2 Gender and Number 3
3 Eligibility and Participation
3.1 Eligibility and Participation 4
4 Administration
4.1 Administration 5
5 Stock Subject to Program
5.1 Number 6
5.2 Lapsed Awards 6
5.3 Adjustment in Capitalization 6
6 Duration of Program
6.1 Duration of Program 7
7 The Stock Option Plan
7.1 Grant of Options 8
7.2 Option Agreement 8
7.3 Option Price 8
7.4 Duration of Options 8
7.5 Exercise of Options 9
7.6 Payment 9
7.7 Restrictions on Stock
Transferability 9
7.8 Termination of Employment
Due to Death, Disability,
or Retirement 10
<PAGE>
- -i-
THE CLOROX COMPANY
1987 LONG-TERM
COMPENSATION PROGRAM
TABLE OF CONTENTS
(Continued)
Article Section Page
7.9 Termination of Employment
Other Than for Death,
Disability, Retirement or
Termination for Cause 10
7.10 Nontransferability 10
7.11 Time of Exercise for
Incentive Stock Options 11
8 The Restricted Stock Plan
8.1 Grant of Restricted Stock 12
8.2 Nontransferability 12
8.3 Other Restrictions 12
8.4 Voting Rights 12
8.5 Dividends and Other
Distributions 12
8.6 Termination of Employment
Due to Retirement 13
8.7 Termination of Employment
Due to Death or Disability 13
8.8 Termination of Employment
for Reasons Other Than
Death, Disability, or
Retirement 13
9 The Performance Unit Plan
9.1 Grant of Performance Units 14
9.2 Value of Performance Units 14
9.3 Payment of Performance Units 14
9.4 Form and Timing of Payment 14
9.5 Termination of Employment
Due to Death, Disability,
or Retirement 14
9.6 Termination of Employment
for Other than Death,
Disability or Retirement
Reasons 15
9.7 Nontransferability 15
Amended 11/17/93 - Former Article 8, Stock Indemnification
Rights, deleted
<PAGE>
(ii)
THE CLOROX COMPANY
1987 LONG-TERM
COMPENSATION PROGRAM
TABLE OF CONTENTS
Article Section Page
10 Beneficiary Designation
10.1 Beneficiary Designation 16
11 Rights of Employees
11.1 Employment 17
11.2 Participation 17
12 Change of Control
12.1 Acceleration of Rights Due
to Change of Control 18
12.2 Definition 18
13 Amendment, Modification, and
Termination of Programs
13.1 Amendment, Modification, and
Termination of Program 19
14 Tax Withholding
14.1 Tax Withholding 20
15 Indemnification
15.1 Indemnification 21
16 Requirements of Law
16.1 Requirements of Law 22
16.2 Governing Law 22
<PAGE>
THE CLOROX COMPANY
1987 LONG-TERM
COMPENSATION PROGRAM
Article 1. Establishment, Purpose, and
Effective Date of Plan
1.1 Establishment. The Clorox Company, a Delaware
corporation, hereby establishes "THE CLOROX COMPANY 1987
LONG-TERM COMPENSATION PROGRAM" (the "Program") for key
employees. The Program consists of the separate plans
contained herein which permit the grant of stock options,
stock indemnification rights, restricted stock and
performance units, with common stock or cash serving as
a payout medium for payments under the plans.
1.2 Purpose. The purpose of the Program is to
advance the interests of the Company, by encouraging
and providing for the acquisition of an equity interest
in the success of the Company by key employees, by
providing additional incentives and motivation toward
superior performance of the Company, and by enabling the
Company to attract and retain the services of key
employees upon whose judgment, interest, and special
effort the successful conduct of its operations is
largely dependent.
1.3 Effective Date. The Program and each underlying
plan became effective upon approval by the stockholders
of the Company on October 21, 1987, that date being the
Effective Date.
7/15/87
<PAGE>
Article 2. Definitions
2.1 Definitions. Whenever used herein, the following
terms shall have their respective meanings set forth below:
(a) "Award" means any Option, Stock Indemnification
Right, Restricted Stock, or Performance Unit
granted under the Program.
(b) "Board" means the Board of Directors of the
Company.
(c) "Code" means the Internal Revenue Code of 1986,
as amended. To the extent required by the context
and the purpose of the Program, any reference to
a particular Code provision shall be deemed to
include the successor to such provision.
(d) "Committee" means the committee of three or more
persons constituting the "outside," independent
directors serving on the Employee Benefits and
Management Compensation committee of the Board.
No person, while a member of the Committee, shall
be eligible for participation in the Program, and
no person shall become a member of the Committee
if, within one year prior to becoming a member,
that person shall have been eligible for selection
as a Participant in the Program, or any other plan
of the Company entitling participants to acquire
Stock, or be granted Options or Stock
Indemnification Rights.
(e) "Company" means The Clorox Company, a Delaware
corporation.
(f) "Disability" means permanent and total disability
as defined in the Company's Pension Plan.
(g) "Employee" means a regular salaried employee
(including directors who are also employees) of
the Company or its subsidiaries, or any branch
or division thereof.
(h) "Fair Market Value" (unless another definition
is required by the Code or regulations thereunder)
means the average of the highest and lowest prices
of the Stock as reported in publications of general
circulation for the New York Stock Exchange
Composite Transactions on a particular date. In
the event that there are no Stock transactions
on such date, the Fair Market Value shall be
determined as of the immediately preceding date
on which there were Stock transactions.
(i) "Option" means the right to purchase shares of
Stock at a stated price for a specified period
of time. An Option may be either an "incentive
stock option" within the meaning of Section 422A
of the Code, any other type of option encompassed
by the Code, or a non-statutory option.
(j) "Participant" means any Employee designated by
the committee to participate in any of the plans
in the Program.
7/15/87
<PAGE>
(k) "Performance Unit" means a right to receive a
payment equal to the value of a Performance Unit as
determined by the Committee pursuant to Article 9.
(l) "Period of Restriction" means the period during
which the transfer of shares of Restricted Stock is
restricted pursuant to Article 8 of this Program.
(m) "Restricted Stock" means Stock granted to a
participant pursuant to Article 8 of this Program.
(n) "Retirement" (including "Early Retirement" and
"Normal Retirement") means termination of employment
under the terms of the Company's Pension Plan.
(o) "Stock" means the common stock of the Company.
(p) "Termination for Cause" means termination by
the Company because of the Employees' dishonesty, an
assault by an employee on another person which adversely
affects the Company or for any other violation of Company
policy which follows a warning to cease such violation.
The Committee, in its discretion, shall make the final
decision as to whether a particular termination constitutes
a Termination for Cause.
2.2 Gender and Number. Except when otherwise indicated
by the context, words in the masculine gender when used in
the Program shall include the feminine gender, the singular
shall include the plural, and the plural shall include the
singular.
11/17/93 References To Article numbers changed, definition
of Stock Indemnification right deleted
<PAGE>
Article 3. Eligibility and Participation
3.1 Eligibility and Participation. Participants in
each plan under the Program shall be selected by the
Committee from among those Employees who are recommended
for participation by the chief executive officer of the
Company and who, in the opinion of the Committee, are key
Employees in a position to contribute materially to the
Company's continued growth and development and to its
long-term success. Selection for participation under one
plan does not automatically result in selection for
participation under another plan unless such result is
specified by the Committee or by the terms of the Program.
7/15/87
<PAGE>
Article 4. Administration
4.1 Administration. The Committee shall be responsible
for the administration of the Program. The Committee, by
majority action thereof, is authorized to interpret the
Program, to prescribe, amend, and rescind rules and
regulations relating to the Program, to provide for
conditions and assurances deemed necessary or advisable
to protect the interests of the Company, and to make all
other determinations necessary or advisable for the
administration of the Program, but only to the extent
not contrary to the express provisions of the Program.
Determinations, interpretations, or other actions made
or taken by the Committee pursuant to the provisions of
the Program shall be final and binding and conclusive
for all purposes and upon all persons whomsoever.
7/15/87
<PAGE>
Article 5. Stock Subject to Program
5.1 Number. The total number of shares of Stock
subject to Awards under the Program may not exceed
4,800,000 subject to adjustment upon occurrence of any
of the events indicated in section 5.3. The shares to
be delivered under the Program may consist, in whole or
in part, of authorized but unissued Stock or treasury
Stock, not reserved for any other purpose.
5.2 Lapsed Awards. If any Award granted under the
Program terminates, expires or lapses or for any reason,
any shares subject to such Award shall again be available
for the grant of an Award.
5.3 Adjustment in Capitalization. In the event of
any change in the outstanding shares that occurs after the
Effective Date by reason of a Stock dividend or split,
recapitalization, merger, consolidation, combination,
exchange of shares, or other similar corporate change,
the aggregate number of shares subject to each outstanding
Option, and its stated Option price, shall be adjusted
appropriately by the Committee, whose determination shall
be conclusive.
11/17/93 Number of Authorized Shares Increased from 3.1
Million to 4.8 Million
<PAGE>
Article 6. Duration of Program
6.1 Duration of Program. The Program shall remain
in effect, subject to the Board's right to terminate the
Program earlier pursuant to Article 13, until all Stock
subject to it shall have been purchased or acquired pursuant
to the provisions hereof. Notwithstanding the foregoing,
no Award may be granted under the Program on or after
July 14, 1997.
7/15/87
<PAGE>
Article 7. The Stock Option Plan
7.1 Grant of Options. One plan under the Program
shall relate to Options. Subject to the other applicable
provisions of the Program, Options may be granted to
Participants at any time and from time to time as shall be
determined by the Committee. The Committee shall have
complete discretion in determining the number of Options
granted to each Participant. The Committee may grant any
type of Option permitted by law at the time of grant and
shall specify whether or not any Option is intended to be
an incentive stock option described in section 422A of the
Code. In the case of incentive stock options, the following
conditions shall apply in addition to any other requirements
of this plan or the Code:
(a) 10-Percent Stockholders. An optionee must not,
immediately before an incentive stock option is granted,
own stock representing more than ten percent of the voting
power or value of all classes of Stock of the Company or of
any subsidiary. This requirement is waived if (i) the
exercise price of the incentive stock option to be granted
is at least 110 percent of the Fair Market Value of the
Stock subject to the Option, determined at the time the
Option is granted, and (ii) the Option is not exercisable
more than five years from the date the Option is granted.
(b) Annual Limitation. The aggregate Fair Market
Value (determined at the time the Option is granted) of
the Stock with respect to which incentive stock options
are exercisable for the first time by the optionee during
any calendar year may not exceed $100,000.
7.2 Option Agreement. Each Option shall be evidenced
by an Option agreement that shall specify the type of Option
granted, the Option price, the duration of the Option, the
number of shares to which the Option pertains, and such other
provisions as the Committee shall determine.
7.3 Option Price. No Option granted pursuant to this
plan shall have an Option price that is less than the Fair
Market Value of the Stock on the date the Option is granted.
7.4 Duration of Options. Each Option shall expire at
such time as the Committee shall determine at the time it
is granted, provided; however, that no Option shall be
exercisable later than ten years and one day from the date
of its grant.
7/15/87
<PAGE>
7.5 Exercise of Options. Options granted under this
plan shall be exercisable at such times and be subject to
such restrictions and conditions as the Committee shall in
each instance approve, which need not be the same for all
Participants. Each Option which is intended to qualify
as an incentive stock option pursuant to Section 422A of
the Code shall comply with the applicable provisions of
the Code pertaining to such Options.
7.6 Payment. The Option price of Stock upon exercise
of any Option shall be paid in full either (i) in cash, or
(ii) in shares of Stock valued at their Fair Market Value
on the date of exercise, or (iii) by a combination of (i)
and (ii), in the manner provided in the Option agreement.
Certificates for such shares tendered in payment shall be
in a form of good delivery and, if the certificates were
issued pursuant to the exercise of an incentive stock
option, the optionee must have held the tendered shares
for at least one year.
7.7 Restrictions on Stock Transferability. The
Committee may impose such restrictions on any shares
acquired pursuant to the exercise of an Option under this
plan as it may deem advisable, including, without
limitation, restrictions under applicable Federal
securities law, under the requirements of any stock
exchange upon which such shares of Stock are then
listed and under any state securities laws applicable
to such shares.
7/15/87
<PAGE>
7.8 Termination of Employment Due to Death,
Disability, or Retirement. In the event the employment
of a Participant is terminated by reason of death or
Disability, any outstanding Options then exercisable may
be exercised at the time prior to the expiration date of
the Options or within 12 months after such date of
termination of employment, whichever period is the
shorter. In the event of termination of employment by
reason of Retirement, all of the Participant's options
which have been outstanding for more than six months shall
become immediately exercisable and may be exercised at any
time prior to the expiration date of the Options or within
a period following the Participant's Retirement specified
from time to time by the Committee, whichever period is
shorter. Options which have been outstanding for less than
six months on the date of the Participant's Retirement shall
not become exercisable until they have been outstanding for
six months and thereafter may be exercised at any time prior
to the expiration of the Option or within the period
following the Participant's Retirement specified from time
to time by the Committee, whichever period is shorter.
However, in the case of incentive stock options, the
favorable tax treatment prescribed under section 422A of
the Code shall not be available if such options are not
exercised within three months after date of termination,
or 12 months in the case of death or disability as defined
in section 22(e) (3) of the Code. If an incentive stock
option is not exercised within three months of termination
due to Retirement, it shall be treated as a nonstatutory
stock option for the remainder of its allowable exercise
period.
If the Compensation Committee changes the time period
following Retirement in which an Option may be exercised,
the change will not (i) have the effect of shortening the
exercise period of Options held by persons who retired
before the effective date of the Compensation Committee's
action, or (ii) make exercisable any Option which had
expired pursuant to an exercise time period previously
set by the Compensation Committee.
7.9 Termination of Employment Other Than for Death,
Disability, Retirement or Termination for Cause. If the
employment of the Participant shall terminate for any reason
other than death, Disability, Retirement, or Termination for
Cause, the rights under any then outstanding Option granted
pursuant to this plan shall terminate upon the expiration
date of the Option or three months after such date of
termination of employment, whichever first occurs. Upon
a Termination for Cause rights under all Options shall
terminate immediately.
7.10 Nontransferability. No Option granted under the
plan may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, otherwise than by will
or by the laws of descent and distribution. Further, all
Options granted to a Participant under this plan shall be
exercisable during his lifetime only by such Participant.
10/16/91 - Section 7.8 effective Retroactively to 7/1/91.
11/17/93 - Section 7.8 regarding post retirement exercise
period changed.
11/17/93 - Last paragraph of Section 7.8 added.
<PAGE>
7.11 Time of Exercise for Incentive Stock Options.
Notwithstanding other provisions pertaining to the times
at which Options may be exercised, no Option that is
intended to be an incentive stock option shall first
become exercisable at a time earlier than that originally
specified in the Option grant, if the result would be to
cause such Option, when granted, not to be treated as an
incentive stock option (whether by reason of the possible
future violation of the annual limitation of section 7.1(b)
or otherwise).
7/15/87
<PAGE>
Article 8. The Restricted Stock Plan
8.1 Grant of Restricted Stock. One plan under the
Program shall relate to Restricted Stock. Subject to
other applicable provisions of the Program, the Committee,
at any time and from time to time, may grant shares of
Restricted Stock under the plan to such Participants and
in such amounts as it shall determine. The Committee may
also offer participants in the Company's management
incentive compensation plan, or any other Company bonus
or incentive plan in which awards are otherwise paid
primarily or totally in cash, the opportunity to elect
to receive Restricted Stock, including a bonus amount of
Restricted Stock to serve as an incentive to make such an
election, in lieu of receiving all or a portion of the
participant's award in cash. Each grant of Restricted
Stock shall be in writing and shall specify the Period(s)
of Restriction and the time or times, which may be
accelerated upon the attainment of specific financial
goals, at which such period(s) shall lapse with respect
to a specified number of shares of Stock. The Periods of
Restriction shall not exceed ten years from the date of
grant of the Restricted Stock.
8.2 Nontransferability. Except as provided in section
8.8 hereof, the shares of Restricted Stock granted hereunder
may not be sold, transferred, pledged, assigned, or otherwise
alienated or hypothecated for such period of time as shall
be determined by the Committee and shall be specified in
the Restricted Stock grant, or upon earlier satisfaction
or other conditions as specified by the Committee in its
sole discretion and set forth in the Restricted Stock grant.
8.3 Other Restrictions. The Committee may impose such
other restrictions on any shares of Restricted Stock granted
pursuant to this plan as it may deem advisable including,
without limitation, restrictions under applicable Federal
or state securities laws, and may legend the certificates
representing Restricted Stock to give appropriate notice
of such restrictions.
8.4 Voting Rights. Participants holding shares of
Restricted Stock granted hereunder may exercise full voting
rights with respect to those shares during the Period of
Restriction.
8.5 Dividends and Other Distributions. During the
Periods of Restriction, Participants holding shares of
Restricted Stock granted hereunder shall be entitled to
receive all dividends and other distributions paid with
respect to those shares while they are so held. If any
such dividends or distributions are paid in shares of Stock,
those shares shall be subject to the same restrictions on
transferability as the shares of Restricted Stock with
respect to which they were paid.
11/17/93 - Former Article 8 (Stock Indemnification Rights)
Deleted. Section 8.1 added accelerated vesting upon meeting
goals and right to receive Restricted Stock in lieu of cash
bonus.
<PAGE>
8.6 Termination of Employment Due to Retirement.
(a) In the event that a Participant terminates his
employment due to Retirement, the Periods of
Restriction applicable to the Restricted Stock
pursuant to subsection 8.2 hereof, shall lapse
automatically and, except as otherwise provided
in subsection 8.3 and 8.6 (b), the Shares of
Restricted Stock shall thereby be free of
restrictions and freely transferable if such
Restricted Stock was issued to the Participant
more than six months prior to the Participant's
Retirement Date. With regard to Restricted Stock
issued to the Participant less than six months
before the Participant's Retirement Date, the
Periods of Restriction shall lapse only after
six months have elapsed since the issuance.
(b) If the grant of Restricted Stock contains a
provision permitting lapse of the Period(s)
of Restriction to be accelerated upon the
attainment of specific financial goals, a
Participant's Retirement will not accelerate
the lapse of the Period(s) of Restriction.
In such a case the Participant's Restricted
Stock shall not be forfeited but the Period(s)
of Restriction will lapse at the earlier of the
Participant's death or upon the achievement of
the conditions specified in the grant of the
Restricted Stock.
8.7 Termination of Employment Due to Death or
Disability. In the event a Participant's employment with
the Company terminates because of his death or Disability
during the Periods of Restriction, the restrictions
applicable to the shares of Restricted Stock pursuant to
section 8.2 hereof shall lapse automatically.
8.8 Termination of Employment for Reasons Other Than
Death, Disability, or Retirement. Except as otherwise
provided in this section, in the event that a Participant's
employment with the Company terminates for any reason other
than those set forth in sections 8.6 and 8.7 during the
Periods of Restriction, any shares of Restricted Stock
still subject to restrictions at the date of such
termination automatically shall be forfeited and returned
to the Company. In the event of an involuntary termination
of the employment of a Participant by the Company other
than a Termination for Cause, the Committee in its sole
discretion may waive the automatic forfeiture of any or
all such shares. With regard to Restricted Stock granted
pursuant to an election to receive Restricted Stock in
lieu of a cash award under the Company's Management
Incentive Compensation Plan, or any other Company bonus
or incentive plan in which awards are otherwise paid
primarily or totally in cash, the Committee may provide
at the time of the grant that upon the Participant's
termination of employment for any reason, or for any
reason other than Termination for Cause, the restrictions
applicable to those shares of Restricted Stock, including
any bonus amount, shall lapse automatically.
10/16/91 Section 8.6 Effective Retroactively to 7/1/91
11/17/93 Section 8.6 (b) added
11/17/93 Provision for vesting Restricted Stock received
in lieu of cash bonus.
<PAGE>
Article 9. The Performance Unit Plan
9.1 Grant of Performance Units. One plan under the
Program shall relate to Performance Units. Subject to
other applicable provisions of the Program, Performance
Units may be granted to Participants at any time and from
time to time as shall be determined by the Committee. The
Committee shall have complete discretion in determining the
number of Performance Units granted to each Participant.
9.2 Value of Performance Units. Each Performance Unit
shall have an arbitrary value to be determined by the
Committee at the time of grant. The Committee shall
establish performance goals in its discretion which,
depending on the extent to which they are met, will
determine the ultimate value of the Performance Unit to
the Participant. The time period during which the
performance goals must be met shall be called a performance
period, and also is to be determined by the Committee.
9.3 Payment of Performance Units. After a performance
period has ended, the holder of a Performance Unit shall be
entitled to receive the value thereof as determined pursuant
to section 9.2.
9.4 Form and Timing of Payment. Payment under section
9.3 above shall be made in cash and/or shares of Stock and
shall be in the form of a lump sum or installments as
prescribed by the Committee. If any payment is to be made
on a deferred basis, the Committee may provide for the
payment of additional compensation computed in a manner
like interest during the deferral period. In general, the
time and manner of making installment payments and the
interest component that is applied during the period of
deferral shall be determined by the Committee.
9.5 Termination of Employment Due to Death, Disability,
or Retirement. In the case of death, Disability or
Retirement, the holder of a Performance Unit shall receive
perorate payment based on the number of full months' of
service completed during the performance period but based
on the achievement of performance goals during the entire
performance period. Payment shall be made at the time
payments are made to Participants who did not terminate
service during the performance period.
11/17/93 Sections renumbered.
<PAGE>
9.6 Termination of Employment for Other than Death,
Disability or Retirement Reasons. In the event that
a Participant terminates employment with the Company
for any reason other than death, Disability or Retirement,
all Performance Units shall be forfeited. In the event
of an involuntary termination of employment of the
Participant by the Company other than a Termination for
Cause, the Committee in its sole discretion may waive
the automatic forfeiture provisions and pay out on a
perorate basis.
9.7 Nontransferability. No Performance Unit granted
under this plan may be sold, transferred, pledged, assigned,
or otherwise alienated or hypothecated, other than by will
or by the laws of descent and distribution to the extent
permitted by section 9.5 until the termination of the
applicable performance period.
11/17/93 Sections renumbered.
<PAGE>
Article 10. Beneficiary Designation
10.1 Beneficiary Designation. If the Program permits
the transfer of any right granted in the event of a
Participant's death, the beneficiary of such transfer
shall be the person(s) designated by the Participant for
this Company sponsored group life insurance benefits,
provided, however, a Participant may designate different
beneficiaries in a written instrument delivered to the
Committee.
11/17/93 Sections renumbered.
<PAGE>
Article 11. Rights of Employees
11.1 Employment. The Program shall not constitute a
contract of employment. Nothing in the Program shall
interfere with or limit in any way the right of the Company
to terminate any Participant's employment at any time, nor
shall it confer upon any Participant any right to continue
in the employ of the Company.
11.2 Participation. No Employee shall have the right
to be selected as a Participant, or, having been so
selected, to be selected again as a Participant.
11/17/93 Sections renumbered.
<PAGE>
Article 12. Change of Control
12.1 Acceleration of Rights Due to Change of Control.
Upon a change in control, as defined in section 12.2, the
Period of Restriction on any Restricted Stock shall end,
all unexpired Options held by Participants shall immediately
vest and become exercisable (except as otherwise provided in
section 7.11), and all Performance Units shall become
subject to immediate payment based upon the extent to which
performance goals during the performance period have been
met up to the date of the change of control, or at 100% of
the total value of the Performance Unit, whichever produces
the greater payout.
12.2 Definition. For purposes of the Program, a "change
of control" shall be deemed to have occurred if:
(a) the Company consolidates or merges with, or sells
or otherwise transfers more than 50% of its assets
or earning power to, any Person in a transaction
or series of transactions which result in the
holders of the outstanding common stock of the
Company immediately prior to the first such
transaction holding (either by such shares
remaining outstanding or by being converted into
securities of the surviving entity) less than a
majority of the shares entitled to vote for the
election of directors of the surviving entity
outstanding immediately after such merger,
consolidation, sale or transfer, or
(b) any Person becomes the beneficial owner of more
than 30% of the outstanding common shares (a "30%
Beneficial Owner") and a majority of the members
of the Board of Directors of the Company are not
Continuing Directors.
(c) For purposes of this section 12.2:
(i) Beneficial ownership shall be determined in
accordance with Rule 13d-3 under the
Securities Exchange Act of 1934 (the "1934
Act"), but shall not include ownership by
any Subsidiary or any employee benefit plan
of the Company.
(ii) "Continuing Director" shall mean any member
of the Board of Directors of the Company
who is not a 30% Beneficial Owner or a
representative of a 30% Beneficial Owner and
who was either (a) a member of the Board
prior to the time that any Person becomes a
30% Beneficial Owner or (b) subsequently
becomes a member of the Board, if such
Person's election to the Board is recommended
or approved by a majority of Continuing
Directors.
(iii) "Person" shall mean any individual, firm,
partnership, corporation or other entity,
and shall include any successor of such
entity and all Affiliates, Associate and
Subsidiaries (as those terms are defined
in Rule 12b-2 under the 1934 Act) of such
Person; provided, however, that the term
"Person" shall not include Henkel Corporation
or any of its Subsidiaries.
11/17/93 Sections renumbered.
<PAGE>
Article 13. Amendment, Modification, and Termination of
Programs
13.1 Amendment, Modification, and Termination of
Program. The Board at any time may terminate, and from
time to time may amend or modify the Program, provided,
however, that no such action of the Board, without approval
of the stockholders, may:
(a) Increase the total amount of Stock which may be
issued under the Program, except as provided in
section 5.3 of the Program.
(b) Change the provisions of the Program regarding
the Option price except as provided by section
5.3.
(c) Change the class of employees to whom incentive
stock options may be granted.
(d) Extend the period during which Awards may be
granted.
(e) Extend the maximum period after the date of grant
during which Options may be exercised.
No amendment, modification, or termination of the Program
shall in any manner adversely affect any Award theretofore
granted under the Program, without the consent of the
Participant.
11/17/93 Sections renumbered.
<PAGE>
Article 14. Tax Withholding
14.1 Tax Withholding. The Company shall have the power
to withhold, or require a Participant to remit to the
Company, an amount sufficient to satisfy any Federal, state,
local or foreign withholding tax requirements on any Award
under the Program.
To the extent permissible under applicable tax, securities,
and other laws, the Company may, in its sole discretion,
permit the Participant to satisfy a tax withholding
requirement by directing the Company to apply shares of
stock to which the Participant is entitled as a result of
the exercise of an option or the lapse of a Period of
Restriction, to satisfy such requirement.
11/17/93 Sections renumbered.
<PAGE>
Article 15. Indemnification
15.1 Indemnification. Each person who is or shall
have been a member of the Committee or of the Board shall
be indemnified and held harmless by the Company against
and from any loss, cost, liability, or expense that may
be imposed upon or reasonably incurred by him in connection
with or resulting from any claim, action, suit, or
proceeding to which he may be a party or in which he may
be involved by reason of any action taken or failure to
act under the Program and against and from any and all
amounts paid by him in settlement thereof, with the approval
of the Committee, or for members thereof of the Board, or
paid by him in satisfaction of any judgment in any such
action, suit, or proceeding against him, provided he shall
give the Company an opportunity, at its own expense, to
defend the same before he undertakes to defend it on his
own behalf. The foregoing right of indemnification shall
not be exclusive of any other rights of indemnification to
which such persons may be entitled under the Company's
Certificate of Incorporation or Bylaws, as a matter of law,
or otherwise, or any power that the Company may have to
indemnify them or hold them harmless.
11/17/93 Sections renumbered.
<PAGE>
Article 16. Requirements of Law
16.1 Requirements of Law. The granting of Awards and
the issuance of shares of Stock upon the exercise of an
Option shall be subject to all applicable laws, rules, and
regulations, and to such approvals by any governmental
agencies or national securities exchanges as may be
required.
16.2 Governing Law. The Program, and all agreements
hereunder, shall be construed in accordance with and governed
by the laws of the State of California.
11/17/93 Sections renumbered.
THE CLOROX COMPANY
1993 DIRECTORS' STOCK OPTION PLAN
SECTION 1. INTRODUCTION.
The Plan was adopted by the Board on July 20, 1993,
subject to approval by the Company's stockholders at the
annual meeting of stockholders on November 17, 1993. The
purpose of the Plan is to promote the long-term success
of the Company and to create incremental stockholder value
by (a) encouraging the Independent Directors to focus on
critical long-range objectives, (b) encouraging the
attraction and retention of Independent Directors with
exceptional qualifications and (c) linking Independent
Directors directly to stockholder interests through
increased stock ownership. The Plan seeks to achieve
this purpose by providing for the grant of nonstatutory
options to purchase Common Shares.
The Plan is intended to comply in all respects with
Rule 16b-3 (or its successor) under the Exchange Act and
shall be construed accordingly.
SECTION 2. DEFINITIONS.
(a) "Board" means the Company's Board of
Directors, as constituted from time to time.
(b) "Change in Control" means the occurrence of
any of the following events:
(i) The Company consolidates or merges
with, or sells or otherwise transfers more than 50% of its
assets or earning power to, any Person in a transaction or
series of transactions which result in the holders of the
outstanding common stock of the Company immediately prior
to the first such transaction holding (either by such
shares remaining outstanding or by being converted into
securities of the surviving entity) less than a majority
of the shares entitled to vote for the election of
directors of the surviving entity outstanding immediately
after such merger, consolidation, sale or transfer, or
(ii) Any Person becomes the beneficial
owner of more than 30% of the outstanding common shares
(a "30% Beneficial Owner") and a majority of the members
of the Board of Directors of the Company are not Continuing
Directors.
(iii) For purposes of this definition
of Change in Control:
a) "Beneficial Ownership" shall
be determined in accordance with Rule 13-d-3 under the
"Securities Exchange Act of 1934 (the "1934 Act"), but
shall not include ownership by any Subsidiary or any
employee benefit plan of the Company.
<PAGE>
- - 2 -
b) "Continuing Director" shall
mean any member of the Board of Directors of the Company
who is not a 30% Beneficial Owner or a representative of
a 30% Beneficial Owner and who was either (i) a member of
the Board prior to the time that any Person becomes a 30%
Beneficial Owner or (ii) subsequently becomes a member of
the Board, if such the Board, if such Person's election to
the Board is recommended or approved by a majority of
Continuing Directors.
c) "Person" shall mean any
individual, firm, partnership, corporation or other entity,
and shall include any successor of such entity and all
Affiliates, Associates and Subsidiaries (as those terms are
defined in Rule 12b-2 under the 1934 Act) of such Person;
provided, however, that the term "Person" shall not include
H C Investments, Inc., a U.S. affiliate of Henkel KGaA, or
any of Henkel KGaA's other Subsidiaries.
(c) "Code" means the Internal Revenue Code of 1986,
as amended.
(d) "Committee" means the Employee Benefits and
Management Compensation Committee of the Board, as
constituted from time to time.
(e) "Common Share" means one share of the common
stock of the Company.
(f) "Company" means The Clorox Company, a Delaware
corporation.
(g) "Employee" means an employee (within the meaning
of Section 3401(c) of the Code and the regulations
thereunder) of the Company or of a Subsidiary of the
Company.
(h) "Exchange Act" means the Securities Exchange Act
of 1934, as amended.
(i) "Exercise Price" means the amount for which one
Common Share may be purchased upon exercise of an Option,
as specified in the applicable Stock Option Agreement.
(j) "Fair Market Value" means the closing price of
a Common Share on the trading day immediately preceding the
day in question, as stated in the New York Stock Exchange
composite transactions report.
(k) "Independent Director" means a member of the
Board who is not an Employee and was not an Employee who
actively performed duties at any time during the twelve
months immediately preceding the member's first election
to the Board as an Independent Director.
(l) "NSO" means a stock option not described in
Section 422 or 423 of the Code.
(m) "Option" means an NSO granted under the Plan
and entitling the holder to purchase Common Shares.
(n) "Optionee" means an individual who holds an
Option.
<PAGE>
- - 3 -
(o) "Plan" means this 1993 Directors' Stock Option
Plan, as it may be amended from time to time.
(p) "Retirement" means termination of Service after
(i) attaining age 70 or (ii) serving as an Independent
Director for not less than five years.
(q) "Service" means service as a member of the Board
as an Independent Director.
(r) "Stock Option Agreement" means the agreement
between the Company and an Optionee that contains the terms,
conditions and restrictions pertaining to his or her Option.
(s) "Subsidiary" means any corporation, if the
Company and/or one or more other Subsidiaries own not less
than 50 percent of the total combined voting power of all
classes of outstanding stock of such corporation. A
corporation that attains the status of a Subsidiary on a
date after the adoption of the Plan shall be considered a
Subsidiary commencing as of such date.
(t) "Total and Permanent Disability" means that the
Optionee is unable to engage in any substantial gainful
activity by reason of any medically determinable physical
or mental impairment which can be expected to result in
death or which has lasted, or can be expected to last, for
a continuous period of not less than 12 months.
SECTION 3. ADMINISTRATION.
(a) Plan Administrator. The Plan shall be
administered by the Committee.
(b) Committee Responsibilities. Subject to the
provisions of the Plan, the Committee shall have full
authority and discretion to take the following actions:
(i) To interpret the Plan and to apply
its provisions;
(ii) To adopt, amend or rescind rules,
procedures and forms relating to the Plan;
(iii) To authorize any person to execute,
on behalf of the Company, any instrument required to carry
out the purposes of the Plan; and
(iv) To take any other actions deemed
necessary or advisable for the administration of the Plan.
All decisions, interpretations and other actions of
the Committee shall be final and binding on all Optionees
and all other persons deriving their rights from an
Optionee. No member of the Committee shall be liable for
any action that he or she has taken or has failed to take
in good faith with respect to the Plan or any Option.
<PAGE>
- - 4 -
SECTION 4. STOCK SUBJECT TO PLAN.
(a) Basic Limitation. Common Shares offered under
the Plan shall be treasury shares or authorized but unissued
shares. The aggregate number of Common Shares issued under
the Plan shall not exceed 100,000 Common Shares, subject to
adjustment pursuant to Section 7. The number of Common
Shares that are subject to Options at any time shall not
exceed the number of Common Shares that then remain
available for issuance under the Plan. The Company, during
the term of the Plan, shall at all times reserve and keep
available sufficient Common Shares to satisfy the purposes
of the Plan.
(b) Additional Shares. In the event that any
outstanding Option for any reason expires or is canceled or
otherwise terminated, the Common Shares allocable to the
unexercised portion of such Option shall again be available
for the purposes of the Plan.
SECTION 5. TERMS AND CONDITIONS OF OPTIONS.
(a) Stock Option Agreement. Each grant of an
Option shall be evidenced by a Stock Option Agreement
between the Optionee and the Company. Such Option shall
be subject to all applicable terms and conditions of the
Plan and may be subject to any other terms and conditions
that are not inconsistent with the Plan and that the
Committee deems appropriate for inclusion in a Stock
Option Agreement.
(b) Initial Grants. Each Independent Director
who serves as a member of the Board on November 17, 1993,
shall receive an Option covering 2,000 Common Shares on
November 18, 1993. Each Independent Direction who first
joins the Board after November 17, 1993, shall receive
an Option covering 2,000 Common Shares on the first
business day after his or her initial election to the
Board. (The number of Common Shares included in an
Option shall be subject to adjustment under Section 7.)
(c) Annual Grants. On the first business day
of each of the Company's fiscal years, each Independent
Director shall receive an Option covering 500 Common Shares
(subject to adjustment under Section 7), except that such
Option shall not be granted in the calendar year in which
the same Independent Director received an Initial Grant
Option described in Subsection (b) above.
(d) Exercise Price. The Exercise Price under each
Option shall be equal to 100 percent of the Fair Market
Value of the Common Shares subject to such Option on the
date when such Option is granted. The entire Exercise
Price of Common Shares issued under the Plan shall be
payable in cash when such Common Shares are purchased,
except as follows:
(i) Payment may be made with Common
Shares that have already been owned by the Optionee for
more than six months and that are surrendered to the
Company in good form for transfer or by foregoing the
right to receive Common Shares whose Fair Market Value
equals the Exercise Price. Such Common Shares shall
be valued at their Fair Market Value on the date when
the new Common Shares are purchased under the Plan.
<PAGE>
- - 5 -
(ii) Payment may be made by the delivery
(on a form prescribed by the Company) of an irrevocable
direction to a securities broker approved by the Company
to sell Common Shares and to deliver all or part of the
sales proceeds to the Company in payment of all or part
of the Exercise Price and any withholding taxes.
(iii) Payment may be made by the delivery
(on a form prescribed by the Company) of an irrevocable
direction to pledge Common Shares to a securities broker
or lender approved by the Company as security for a loan
and to deliver all or part of the loan proceeds to the
Company in payment of all or part of the Exercise Price
and any withholding taxes.
(e) Vesting. Subject to Subsection (j) below,
each Option shall become exercisable in two equal annual
installments on each of the first two anniversaries of
the date of grant. In addition, subject to Subsection (j)
below, each Option that has been outstanding for not less
than six months shall become exercisable in full in the
event that:
(i) The Optionee's Service terminates
because of Retirement, death or Total and Permanent
Disability; or
(ii) A Change in Control occurs with
respect to the Company.
(f) Term of Options. Subject to Subsections (g)
and (h) below, each Option shall expire on the 10th
anniversary of the date when such Option was granted.
(g) Termination of Service (Except by Death).
If an Optionee's Service terminates for any reason other
than death, then his or her Options shall expire on the
earliest of the following occasions:
(i) The expiration date determined
pursuant to Subsection (f) above;
(ii) The date three months after the
termination of the Optionee's Service for any reason
other than Retirement or Total and Permanent Disability.
The Optionee may exercise all or part of his or her
Options at any time before the expiration of such Options
under the preceding sentence, but only to the extent that
such Options had become exercisable before his or her
Service terminated or became exercisable as a result of
the termination. The balance of such Options shall lapse
when the Optionee's Service terminates. In the event that
the Optionee dies after the termination of his or her
Service but before the expiration of his or her Options,
all or part of such Options may be exercised at any time
within 12 months after the date of death by the executors
or administrators of the Optionee's estate or by any person
who has acquired such Options directly from him or her by
bequest, inheritance or beneficiary designation under the
Plan, but only to the extent that such Options had become
exercisable before his or her Service terminated or became
exercisable as a result of the termination.
<PAGE>
- - 6 -
(h) Death of Optionee. If an Optionee dies while
he or she is in Service, then his or her Options shall expire
on the earlier of the following dates:
(i) The expiration date determined pursuant
to Subsection (f) above; or
(ii) The date 12 months after his or her
death.
All or part of the Optionee's Options may be exercised
at any time before the expiration of such Options under the
preceding sentence by the executors or administrators of his
or her estate or by any person who has acquired such Options
directly from him or her by bequest, inheritance or
beneficiary designation under the Plan.
(i) Nontransferability. During an Optionee's
lifetime, his or her Options shall be exercisable only by
him or her and shall be nontransferable. In the event of
an Optionee's death, his or her Options shall not be
transferable other than by bequest, inheritance or
beneficiary designation under the Plan.
(j) Stockholder Approval. Subsection (e) above
notwithstanding, no Option shall be exercisable under any
circumstances unless and until the Company's stockholders
have approved the Plan.
SECTION 6. MISCELLANEOUS PROVISIONS.
(a) No Rights as a Stockholder. An Optionee, or a
transferee of an Optionee, shall have no rights as a
stockholder with respect to any Common Shares covered by his
or her Option until the date of the issuance of a stock
certificate for such Common Shares. No adjustment shall be
made except as provided in Section 7.
(b) Restrictions on Issuance of Shares. Common
Shares shall not be issued under the Plan unless the
issuance and delivery of such Common Shares complies with
(or is exempt from) all applicable requirements of law,
including (without limitation) the Securities Act of 1933,
as amended, the rules and regulations promulgated thereunder,
state securities laws and regulations, and the regulations
of any stock exchange on which the Company's securities may
then be listed. The Company may impose restrictions upon
the sale, pledge or other transfer of such Common Shares
(including the placement of appropriate legends on stock
certificates) if, in the judgment of the Company and its
counsel, such restrictions are necessary or desirable in
order to achieve compliance with the provisions of the
Securities Act of 1933, as amended, the securities laws
of any state or any other law.
(c) Withholding Taxes. The Company's obligation
to deliver Common Shares upon the exercise of an Option
shall be subject to any applicable tax withholding
requirements. To the extent permissible under applicable
tax, securities and other laws, the Company may, in its
sole discretion, permit the Optionee to satisfy a tax
withholding requirement by directing the Company to apply
Common Shares to which the Optionee is entitled as a result
of the exercise of an Option to satisfy such requirement.
<PAGE>
- - 7 -
(d) No Retention Rights. No provision of the Plan,
nor any Option granted under the Plan, shall be construed
as giving any person the right to be elected as, or to be
nominated for election as, an Independent Director or to
remain an Independent Director.
SECTION 7. ADJUSTMENT OF SHARES.
(a) General. In the event of any change in the
Common Shares that occurs after the Plan becomes effective
by reason of a stock dividend or split, recapitalization,
merger, consolidation, combination, exchange of shares, or
other similar corporate change, the aggregate number of
shares subject to each outstanding Option, and its stated
Option price, shall be adjusted appropriately by the
Committee, whose determination shall be conclusive.
(b) Reorganizations. In the event that the Company
is a party to a merger or other reorganization, outstanding
Options shall be subject to the agreement of merger or
reorganization. Such agreement may provide, without
limitation, for the assumption of outstanding Options by the
surviving corporation or its parent, for their continuation
by the Company (if the Company is a surviving corporation),
for accelerated vesting or for settlement in cash.
(c) Reservation of Rights. Except as provided in
this Section 7, an Optionee shall have no rights by reason
of any subdivision or consolidation of shares of stock of
any class, the payment of any stock dividend or any other
increase or decrease in the number of shares of stock of
any class. Any issue by the Company of shares of stock of
any class, or securities convertible into shares of stock
of any class, shall not affect, and no adjustment by reason
thereof shall be made with respect to, the number or
Exercise Price of Common Shares subject to an Option. The
grant of an Option pursuant to the Plan shall not affect in
any way the right or power of the Company to make
adjustments, reclassifications, reorganizations or changes
of its capital or business structure, to merge or
consolidate or to dissolve, liquidate, sell or transfer
all or any part of its business or assets.
SECTION 8. DURATION AND AMENDMENTS.
(a) Term of the Plan. The Plan, as set forth
herein, shall become effective on November 17, 1993 if
approved by the Company's stockholders. The Plan shall
remain in effect until it is terminated under Subsection
(b) below.
(b) Right to Amend or Terminate the Plan. The
Board may amend, suspend or terminate the Plan at any time
and for any reason, except that the provisions of the Plan
relating to the amount, price and timing of Option grants
shall not be amended more than once in any six-month period.
Any amendment of the Plan shall be subject to the approval
of the Company's stockholders to the extent required by
applicable laws, regulations or rules (including, without
limitation, Rule 16b-3 under the Exchange Act).
<PAGE>
- - 8 -
(c) Effect of Amendment or Termination. No Common
Shares shall be issued or sold under the Plan after the
termination thereof, except upon exercise of an Option
granted prior to such termination. The termination of the
Plan, or any amendment thereof, shall not affect any Option
previously granted under the Plan.
EAC/esc
DirStkOp
EXHIBIT 13
(to Form 10-K)
SECTIONS OF ANNUAL REPORT INCORPORATED BY REFERENCE
<PAGE>
Management's Discussion and Analysis
The Clorox Company
Results of Operations
- ---------------------------
The Company's continuing operations again achieved record unit
volume in 1994, following record years in 1993 and 1992. The
increase in unit volume was principally due to the S.O.S
acquisition, the consolidation of an Argentine subsidiary in
which the Company increased its interest to 90 percent in June
1993, and the introduction of new products including Liquid-Plumr
build-up remover, Clorox Stain-Out soil and stain remover,
Clorox toilet bowl cleaners, Tilex soap scum remover, and Hidden
Valley Ranch kids' dressings. Also contributing to volume growth
were record shipments for Clorox liquid bleach, Pine-Sol cleaners,
and the Kingsford line of charcoal briquets.
Net sales increased 12 percent in 1994, following increases of
6 percent in 1993, and 5 percent in 1992. This year's growth
was primarily driven by volume increases from the acquisitions
and new product introductions described above. Price increases
on a few established brands were offset by a price decrease on
Pine-Sol cleaner and increased incentive trade promotions.
Cost of products sold as a percentage of net sales was 45
percent in 1994, and 44 percent in both 1993 and 1992.
Research and Development (R&D) expense increased 5 percent
over 1993 and 1992, but remained relatively constant as a
percent of net sales in 1994, while achieving a second
consecutive record year of new product introductions. In
1993, the R&D function began to implement several productivity
improvements to bring products to market faster and at lower
overall costs. These efficiencies were realized in 1994 and
the Company aims to continue to shorten development times
and further improve cost efficiency, while maintaining a
high level of new product activity in 1995.
Selling, delivery and administration (SD&A) expenses were up
10 percent over 1993 but decreased slightly as a percent of net
sales. Without the S.O.S and Argentine acquisitions, SD&A was
approximately one percentage point lower as a percent of net
sales (19 percent), versus 1993 and 1992. This cost reduction
is a reflection of several significant cost savings projects
including broker and advertising agency consolidations, the
initiation of a new logistics strategy, and improved budgetary
controls, all of which occurred or were initiated in 1994.
The Company will continue to focus on improving its cost
structure during 1995.
Total marketing spending, comprising trade promotions,
consumer promotions and advertising, increased versus 1993
levels. Advertising expense alone increased 18 percent
versus 1993 principally as a result of the Company's new
product introductions and line extensions in late 1993 and
during 1994. In spite of an overall increase in marketing
spending in 1993, advertising expense in 1993 decreased 8
percent from the 1992 level, reflecting a shift toward
trade promotions during 1993.
Interest expense, the majority of which relates to long-term
debt, was level with 1993. Interest expense related to
commercial paper borrowings to finance seasonal working
capital needs also was in line with 1993. Interest expense
is down significantly compared with 1992 principally due to
strong cash flows, which reduced the need for commercial
paper borrowings, and to lower interest rates.
The Company's effective tax rates were 41.3 percent,
39.0 percent, and 40.9 percent in 1994, 1993, and 1992,
respectively. The higher rate in 1994 was principally due
to a 1 percent increase in the statutory federal tax rate,
and the retroactive effect of that increase which was
reflected in 1994 earnings. The statutory rate increase
had the effect of reducing earnings per share from
continuing operations by $.11. The lower rate in 1993
versus 1992 primarily resulted from the favorable resolution
of tax liabilities in prior years.
Earnings per share from continuing operations in 1994
increased $.28 from 1993, a 9 percent increase which
was driven principally by the volume growth described
above and shares purchased in 1994 under the Company's
share repurchase program. Earnings per share in 1994
increased $.89 from 1993, which was in turn up $1.23 from
1992, the year which included a $.35 per share charge from
adopting the accounting standard for postretirement
health-care benefits. In early 1994, the Company sold its
bottled water and frozen foods businesses. Earnings per
share in 1994 include $.59 relating primarily to the gain
on the sale of these discontinued operations.
The Company adopted Statement of Financial Accounting
Standards No. 112 in 1994, and included the cumulative
expense, which was not material, in operations. This
statement requires the accrual of benefits provided by
the Company to former or inactive employees after
employment, but before retirement.
[GRAPHIC - BAR CHART - FILED UNDER COVER OF FORM SE]
18
</PAGE>
<PAGE>
Financial Position and Liquidity
- ------------------------------------
Cash flow from 1994 continuing operations was a record
$298,440,000 and resulted from record earnings supported
by a relatively modest increase in working capital. The
modest increase in working capital relative to the growth
of the business was largely due to management's focus on
the efficient utilization of working capital items, driven
by the Clorox Value Measure (CVM) economic value
measurement system that was implemented this year. The graph
on page 18 shows that CVM was on an upward trend during
the last two years. Favorable working capital changes
were moderated by the acceleration of income tax payments
due to the 1993 tax law changes. In 1993, cash provided by
operations was down from 1992 principally due to adverse
changes in working capital, primarily accounts receivable
and accounts payable.
Proceeds from the sale of discontinued operations generated
cash of $159,293,000 in 1994. The strong cash flows from
continuing operations and the sale of discontinued operations
enabled the Company's cash position at June 30, 1994 to
increase approximately $45,000,000 from a year ago to
approximately $116,000,000.
Dividends paid during 1994 amounted to $97,095,000, or
$1.80 per share. In July 1994, the Company announced a 6.7
percent increase in the quarterly dividend to $.48 per share
from $.45 per share, for a new annual rate of $1.92.
At June 30, 1994, the Company had a $200,000,000 credit
agreement with a syndication of banks which was renewed in
August 1994, and now expires in August 1995. Management
believes that the Company has access to additional bank
credit and the public debt markets should the need arise.
Commercial paper and other short-term borrowings and
long-term debt at year-end increased slightly from 1993
year-end.
On January 31, 1994, the Company purchased the S.O.S products
business for $116,488,000. The effect of this acquisition
was not dilutive to earnings in 1994. Also, during 1994,
the Company made additional foreign investments of
$25,949,000. During 1993, the Company had acquired a controlling
interest in its joint venture in Argentina that previously
had been accounted for on the equity basis and as of June 30,
1993 was consolidated.
Capital expenditures were $56,627,000, $77,637,000, and
$124,742,000 in 1994, 1993, and 1992, respectively.
Spending generally has been for expanded capacity,
process improvements, and environmental programs and
initiatives. Capital spending has declined significantly from
1992 as that year included the majority of the Company's
spending on its most recently built domestic facility, a bleach
plant in Aberdeen, Maryland.
In each of 1994, 1993, and 1992, cash flow from operations
has exceeded cash needs for capital expenditures, dividends,
and scheduled debt service, and is expected to do so again in
1995.
In 1989, the Company commenced a program to repurchase up to
5 million shares of its outstanding stock through periodic
open market and block transactions. These shares are and will
be held in the Company's treasury and reissued for corporate
uses. Through June 30, 1994, the Company had repurchased
3,674,515 shares, of which 1,883,000 shares at a cost of
$99,910,000 were acquired during 1994.
In order to manage the impact of interest rate movements on
interest expense and interest income, the Company has approved
the use of interest rate derivative instruments, such as
interest rate swaps. These instruments have the effect of
converting fixed rate interest to floating, or floating to
fixed. The conditions under which derivatives can be used
are set forth in a Company Policy Statement, and include a
restriction on the amount of such activity to a designated
portion of existing debt, a limit on the term of any
derivative transaction, and a specific prohibition on the
use of any leveraged derivatives.
Although not material, in 1994 the Company hedged its
exposure to certain foreign currency denominated supply
contracts and accounts receivable with foreign currency
contracts.
The Company is committed to an ongoing program of comprehensive,
long-term environmental assessment of its facilities.
This program is implemented by the CompanyUs Department of
Health, Safety and Environment, with guidance from the
Company's legal counsel. During each facility assessment,
compliance with applicable environmental laws and regulations
is evaluated and the facility is reviewed in an effort to
identify possible future environmental liabilities. Although
not material, at June 30, 1994 and 1993, the Company accrued
for the probable future costs of environmental liabilities
without offsetting for expected insurance recoveries or
discounting for present value.
[GRAPHIC - BAR CHART - FILED UNDER COVER OF FORM SE]
19
</PAGE>
<PAGE>
<TABLE>
<CAPTION>
Statements of Consolidated Earnings
The Clorox Company
<S> <C> <C> <C>
Years ended June 30 94 93 92
- ------------------------------------------------------------------------------------------------------
In thousands, except per-share amounts.
Net Sales $1,836,949 $1,634,171 $1,547,057
-------------------------------------------
Costs and Expenses
Cost of products sold 820,434 724,753 678,504
Selling, delivery and administration 359,360 328,088 307,436
Advertising 286,666 242,528 262,586
Research and development 44,558 42,445 42,052
Interest expense 18,424 18,856 24,627
Other expense (income), net 874 2,316 (7,245)
-------------------------------------------
Total costs and expenses 1,530,316 1,358,986 1,307,960
-------------------------------------------
Earnings Before Income Taxes 306,633 275,185 239,097
Income Taxes 126,640 107,267 97,903
-------------------------------------------
Earnings from Continuing Operations 179,993 167,918 141,194
Earnings (losses) from Discontinued Operations 32,064 (867) (23,429)
-------------------------------------------
Earnings Before Cumulative Effect of
Accounting Change 212,057 167,051 117,765
Cumulative Effect of Accounting Change (Note 1) - - (19,061)
-------------------------------------------
Net Earnings $ 212,057 $ 167,051 $ 98,704
===========================================
Earnings (losses) per Common Share
Continuing operations $ 3.35 $ 3.07 $ 2.60
Discontinued operations 0.59 (0.02) (0.43)
-------------------------------------------
Earnings before cumulative effect of
accounting change 3.94 3.05 2.17
Cumulative effect of accounting change - - (0.35)
-------------------------------------------
Net Earnings $ 3.94 $ 3.05 $ 1.82
===========================================
Weighted Average Shares Outstanding 53,800 54,698 54,366
===========================================
See Notes to Consolidated Financial Statements.
20
- --
</TABLE>
</PAGE>
<PAGE>
<TABLE>
<CAPTION>
Consolidated Balance Sheets
The Clorox Company
<S> <C> <C>
Years ended June 30 94 93
- -----------------------------------------------------------------------------------------------
In thousands, except share amounts.
Assets
Current Assets
Cash and short-term investments $ 115,922 $ 71,164
Accounts receivable, less allowance 249,843 226,675
Inventories 105,948 105,890
Deferred income taxes 18,548 19,360
Prepaid expenses 14,014 16,369
Net assets of discontinued operations (Note 2) - 92,320
----------------------------
Total current assets 504,275 531,778
----------------------------
Property, Plant and Equipment - Net 532,600 538,101
----------------------------
Brands, Trademarks, Patents and Other Intangibles - Net 520,042 463,941
----------------------------
Investments in Affiliates 83,368 68,179
----------------------------
Other Assets 57,284 47,231
----------------------------
Total $ 1,697,569 $ 1,649,230
============================
Liabilities and Stockholders' Equity
Current Liabilities
Accounts payable $ 97,728 $ 84,243
Accrued liabilities 227,197 226,775
Income taxes payable 7,599 20,585
Commercial paper 42,916 39,486
Current maturities of long-term debt 392 481
----------------------------
Total current liabilities 375,832 371,570
----------------------------
Long-term Debt 216,088 204,000
----------------------------
Other Obligations 63,187 50,663
----------------------------
Deferred Income Taxes 133,045 143,703
----------------------------
Stockholders' Equity
Common stock - authorized, 175,000,000 shares,
$1 par value; issued: 55,422,297 shares 55,422 55,422
Additional paid-in capital 106,554 105,483
Retained earnings 876,832 762,162
Treasury shares, at cost: 1994, 2,050,041 shares;
1993, 572,155 shares (107,146) (23,357)
Cumulative translation adjustments (22,245) (20,416)
----------------------------
Stockholders' equity 909,417 879,294
----------------------------
Total $ 1,697,569 $ 1,649,230
============================
See Notes to Consolidated Financial Statements.
21
- --
</TABLE>
</PAGE>
<PAGE>
<TABLE>
<CAPTION>
Statements of Consolidated Stockholders' Equity
The Clorox Company
<S> <C> <C> <C> <C> <C> <C> <C>
Common Stock Additional Treasury Shares Cumulative
--------------------- Paid-in Retained ------------------- Translation
Shares Amount Capital Earnings Shares Amount Adjustments
- ------------------------------------------------------------------------------------------------------------------------
In thousands, except share and per-share amounts.
Balance, June 30, 1991 55,422,297 $ 55,422 $104,359 $ 681,479 (1,226,395) $(47,936) $ (9,048)
Net earnings 98,704
Dividends ($1.59 per share) (86,408)
Employee stock plans and other 890 (3,757) 349,191 12,911
Translation adjustments 7,125
-----------------------------------------------------------------------------------------
Balance, June 30, 1992 55,422,297 55,422 105,249 690,018 (877,204) (35,025) (1,923)
Net earnings 167,051
Dividends ($1.71 per share) (93,509)
Employee stock plans and other 234 (1,398) 305,049 11,668
Translation adjustments (18,493)
----------------------------------------------------------------------------------------
Balance, June 30, 1993 55,422,297 55,422 105,483 762,162 (572,155) (23,357) (20,416)
Net earnings 212,057
Dividends ($1.80 per share) (97,095)
Employee stock plans and other 1,071 (292) 405,414 16,121
Treasury shares acquired (1,883,300) (99,910)
Translation adjustments (1,829)
----------------------------------------------------------------------------------------
Balance, June 30, 1994 55,422,297 $ 55,422 $106,554 $ 876,832 (2,050,041) $(107,146) $(22,245)
See Notes to Consolidated Financial Statements.
22
- --
</TABLE>
</PAGE>
<PAGE>
<TABLE>
<CAPTION>
Statements of Consolidated Cash Flows
The Clorox Company
<S> <C> <C> <C>
Years ended June 30 94 93 92
- ------------------------------------------------------------------------------------------------------------------
In thousands.
Operations:
Earnings from continuing operations $ 179,993 $ 167,918 $ 141,194
Adjustments to reconcile to net cash provided by
continuing operations:
Depreciation and amortization 94,120 83,607 76,507
Deferred income taxes 15,985 32,378 13,330
Other 25,985 9,412 6,849
Effects of changes in:
Accounts receivable (18,299) (36,266) 11,866
Inventories 5,691 (7,892) 183
Prepaid expenses 2,355 (2,850) 4,983
Accounts payable 13,485 (18,071) (5,399)
Accrued liabilities (8,134) 2,849 21,772
Income taxes payable (12,741) 3,498 6,010
------------------------------------------
Net cash provided by continuing operations 298,440 234,583 277,295
Net cash (used for) provided by discontinued operations (31,658) 10,877 29,398
------------------------------------------
Net cash provided by operations 266,782 245,460 306,693
------------------------------------------
Investing Activities:
Property, plant and equipment (56,627) (77,637) (124,742)
Net proceeds from sales of businesses 159,293 15,000 709
Businesses purchased (142,437) (31,547) (802)
Disposal of property, plant and equipment 11,264 3,759 1,580
Other (22,046) (24,938) (15,897)
------------------------------------------
Net cash used for investment (50,553) (115,363) (139,152)
------------------------------------------
Financing Activities:
Long-term borrowings 13,000 299 199,532
Long-term debt repayments (741) (1,236) (1,203)
Short-term borrowings (repayments), net 3,430 (42,469) (333,035)
Cash dividends (97,095) (93,509) (86,408)
Treasury shares acquired (99,910) - -
Employee stock plans 9,845 8,958 8,735
------------------------------------------
Net cash used for financing (171,471) (127,957) (212,379)
------------------------------------------
Net increase (decrease) in cash and short-term investments 44,758 2,140 (44,838)
Cash and short-term investments:
Beginning of year 71,164 69,024 113,862
------------------------------------------
End of year $ 115,922 $ 71,164 $ 69,024
===========================================
Cash Paid for:
Interest (net of amounts capitalized) $ 18,267 $ 18,616 $ 18,019
Income taxes 128,210 61,052 73,709
Noncash Transactions:
Liabilities arising from business purchased $ 7,200 $ - $ -
See Notes to Consolidated Financial Statements.
23
- --
</TABLE>
</PAGE>
<PAGE>
Notes to Consolidated Financial Statements
The Clorox Company
1
Significant Accounting Policies
- ----------------------------------
Principles of Consolidation
The Company is principally engaged in the production and
marketing of nondurable consumer products to grocery stores
and other retail outlets. The consolidated financial statements
include the statements of the Company and its majority-owned
subsidiaries. All significant intercompany transactions and
accounts are eliminated in consolidation.
Short-term Investments
Short-term investments consist of money market and other high
quality instruments with an initial maturity of three months
or less and are stated at cost which approximates market value.
Inventories
Inventories are stated at the lower of cost or market. Cost
of the majority of inventories is determined on the last-in,
first-out (LIFO) method. Cost for the remainder of the
inventories is determined generally on the first-in,
first-out (FIFO) method.
Brands, Trademarks, Patents
and Other Intangibles
Brands, trademarks, patents and other intangible assets
arising from transactions after October 31, 1970 are
amortized over their estimated useful lives up to a
maximum of 40 years. Carrying values are reviewed
periodically and a determination of impairment is
based on estimates of future cash flows, undiscounted
and without interest charges.
Investments in Affiliates
The Company holds minority investments in foreign entities
which are accounted for under the equity method. The most
significant investment is a 20 percent equity ownership in
Henkel Iberica, S.A. of Spain.
Income Taxes
The Company uses the liability method to account for
income taxes, in accordance with Statement of Financial
Accounting Standards (SFAS) No. 109, "Accounting for Income
Taxes".
Foreign Currency Translation
Foreign currency assets and liabilities are translated using
the exchange rates in effect at the balance sheet date.
Income and expenses are translated at the average exchange
rates during the year. Translation gains and losses are
reported primarily in stockholders' equity and are excluded
from net earnings.
Earnings per Common Share
Earnings per common share are computed by dividing net earnings
by the weighted average number of common shares outstanding
during the year. The potential dilution from the exercise of
stock options is not material.
Major Customer
Sales to the Company's largest customer, Wal-Mart Stores, Inc.
and affiliates, were 12% of consolidated net sales in 1994.
Accounting Changes
In 1992, the Company adopted SFAS No. 106, "Employers' Accounting
for Postretirement Benefits Other Than Pensions". In adopting
SFAS No. 106, the Company elected to fully recognize
the accumulated postretirement benefit obligation as of July 1,
1991 (see Note 13). The cumulative effect of adoption
resulted in a charge to 1992 earnings of $19,061,000
($.35 per share), net of $11,832,000 tax benefit.
2
Discontinued Operations
- -------------------------
The Company sold its bottled water and frozen foods businesses
during the first quarter of 1994 for $159,293,000. The sale of
these businesses resulted in a net gain of $31,430,000. In June
1993, the Company sold its Prince Castle business which did
not result in a material gain or loss.
Results of discontinued operations are classified separately
in the Statements of Consolidated Earnings and include
(in thousands):
<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------
Net sales $ 18,700 $ 173,291 $ 169,982
======================================
Earnings (losses) from operations
before income taxes $ 1,043 $ (1,437) $ (28,225)
Income tax (expense) benefit (409) 570 4,796
Net earnings (losses) from
discontinued operations 634 (867) (23,429)
--------------------------------------
Gain on sale of businesses 42,177 - -
Income taxes 10,747 - -
--------------------------------------
Net gain on sale of businesses 31,430 - -
--------------------------------------
Earnings (losses) from
discontinued operations $ 32,064 $ (867) $ (23,429)
</TABLE>
The 1992 loss from operations includes the revaluation of certain
intangibles of the bottled water business based upon discounted
cash flows from future operations. The net assets of the
discontinued operations are segregated in the June 30, 1993
consolidated balance sheet and are comprised of the following
(in thousands):
1993
- -----------------------------------------------------------
Assets $ 105,678
Liabilities 13,358
- -----------------------------------------------------------
Net assets $ 92,320
===========
Assets consist primarily of accounts receivable, inventories,
24
- ---
</PAGE>
<PAGE>
property, plant and equipment and intangibles. Liabilities
consisted primarily of accounts payable and accrued
liabilities.
3
Acquisitions
- --------------
On January 31, 1994, the Company acquired and accounted for as
a purchase, the S.O.S products business of Miles Inc. The
acquisition cost of $116,488,000 included the S.O.S brand
of steel wool soap pads and other cleaning products in the
United States and Canada, manufacturing facilities, and
certain items of working capital. Approximately $98,850,000
of the purchase price has been allocated to brands and
trademarks to be amortized over 40 years. The purchase
included at fair value current assets of $9,200,000,
property, plant and equipment of $15,600,000, and the
assumption of current liabilities of $5,300,000 and a
postretirement health-care liability of $1,900,000. The
acquisition was funded from cash and short term borrowings.
Results of operations after the acquisition date are included
in the 1994 Statement of Consolidated Earnings. The following
pro forma information has been prepared assuming that this
acquisition had taken place at the beginning of the respective
periods. The pro forma information includes adjustments for
interest expense that would have been incurred to finance the
purchase, additional depreciation based on the fair market
value of the property, plant, and equipment acquired, and the
amortization of intangibles arising from the transaction. The
pro forma financial information is not necessarily indicative
of the results of operations as they would have been had the
transactions been effected on the assumed dates.
Year ended June 30 1994 1993
- ---------------------------------------------------------------
In thousands, except per share
amounts (unaudited)
Net sales $ 1,884,362 $ 1,722,845
Earnings from continuing
operations $ 177,070 $ 169,991
Net earnings $ 209,134 $ 169,124
Earnings per common share
from Continuing operations $ 3.29 $ 3.11
Net earnings per common share $ 3.89 $ 3.09
In addition, 1994 acquisitions included various foreign
investments of $25,949,000. During 1993, the Company purchased
an additional 39 percent interest in its joint venture in
Argentina bringing total ownership to 90 percent. This
investment had been accounted for on the equity method and
as of June 30, 1993 was consolidated.
4
Inventories
- ----------------
The major classes are (in thousands):
1994 1993
- --------------------------------------------------------------
Finished goods and work in process $ 69,280 $ 64,162
Raw materials and supplies 36,668 41,728
---------------------
Total $ 105,948 $ 105,890
=====================
Had the cost of inventories been determined using the FIFO
method, inventories would have been higher by approximately
$14,843,000 at June 30, 1994 and $14,735,000 at June 30, 1993.
The LIFO method was used to value 85 percent of the inventory
at June 30, 1994 and 88 percent at June 30, 1993.
5
Property, Plant and Equipment
- ---------------------------------
The major classes are (in thousands):
1994 1993
-------------------------
Land and improvements $ 59,005 $ 57,594
Buildings 261,964 262,198
Machinery and equipment 495,903 443,157
Construction in progress 33,650 51,304
--------------------------
Total 850,522 814,253
Less accumulated depreciation 317,922 276,152
--------------------------
Net $ 532,600 $ 538,101
==========================
Property, plant and equipment are stated at cost, reduced
in certain cases by valuation allowances. Depreciation is
calculated by the straight-line method over the estimated
useful lives of the depreciable assets. Depreciation expense
was $61,660,000 in 1994, $51,532,000 in 1993 and $44,467,000
in 1992.
6
Brands, Trademarks, Patents
and Other Intangibles - Net
- ---------------------------------
The major classes are (in thousands):
1994 1993
- --------------------------------------------------------------
Brands and trademarks $ 484,574 $ 406,594
Patents and other intangibles 129,076 129,006
Accumulated amortization (93,608) (71,659)
---------------------------
Net $ 520,042 $ 463,941
Brands and trademarks includes $41,708,000 of continuing value
arising from transactions prior to October 31, 1970.
25
- --
</PAGE>
<PAGE>
7
Accrued Liabilities
- -----------------------
Advertising costs included in accrued liabilities at June 30,
1994 and 1993 were $126,725,000 and $119,439,000, respectively.
8
Long-term Debt
- ------------------
The principal components are (in thousands):
1994 1993
--------------------------
8.8% Non-callable notes due August 1,
2001, includes net unamortized
premium Of $243 and $278,
respectively $200,243 $200,278
Other debt 16,237 4,203
------------------------
216,480 204,481
Less: current maturities 392 481
------------------------
Long-term debt $216,088 $204,000
The Company has a $200,000,000 credit agreement with a syndication
of banks which was renewed in August 1994, and now expires in
August 1995. The credit agreement requires maintenance of a
minimum net worth of $600,000,000. At June 30, 1994, the credit
agreement was available for general corporate purposes and for
the support of additional commercial paper issuance.
At June 30, 1994, the Company had four outstanding interest rate
swap agreements under which the Company receives average fixed
rates of 6.3 percent on a combined notional amount of
$100,000,000 and pays a floating rate based on LIBOR, an
average of 3.9 percent in 1994, as determined in six-month
intervals through October 16, 2001. At June 30, 1993, the
Company had one outstanding interest rate swap and received
6.8 percent fixed and paid 3.6 percent variable interest on
notional principal of $50,000,000. Original terms to maturity
ranged from 81/2 to 73/4 years. At June 30, 1994, the remaining
term for all the agreements was approximately seven years.
The transactions effectively convert a portion of the Company's
interest rate exposure on the 8.8 percent notes from a fixed
rate to a floating rate. The effect of swap agreements as a
hedge of the 8.8 percent fixed rate notes reduced interest
expense by $1,803,000 and $1,179,000, and resulted in effective
borrowing rates of 7.9 percent and 8.2 percent in years 1994
and 1993, respectively. The fair value of these agreements at
June 30, 1994 and 1993 was an unrealized (loss) gain of
($8,422,000) and $3,500,000, respectively, based on the
market prices for similar instruments. The fair value of
the 8.8 percent notes at June 30, 1994 and 1993 was
approximately $212,250,000 and $234,000,000, respectively,
based upon quoted market prices for the same or similar debt.
9
Stockholders' Equity
- --------------------------
In addition to common stock, the Company is authorized to
issue 5,000,000 shares of preferred stock with a par value
of $1 per share, none of which is outstanding. The Company
has a stock option plan under which options to purchase
shares of common stock may be granted to key employees.
The plan provides that the option price shall not be less
than the fair market value of the shares on the date of
grant and that no portion of the option may be exercised
beyond 10 years from that date. At June 30, 1994, there were
1,943,220 shares available for the granting of additional
options or other stock compensation awards. A summary of
changes in common stock options during 1994 and 1993 is:
Number Price
of Shares per Share
- ---------------------------------------------------------------
Outstanding at June 30, 1992 1,852,958 $7.28 - $40.94
Granted 397,629 43.75
Exercised (291,744) 7.28 - 40.94
Cancelled (73,920) 24.34 - 43.75
----------------------------
Outstanding at June 30, 1993 1,884,923 13.69 - 43.75
Granted 907,768 51.13 - 63.50
Exercised (296,849) 13.69 - 43.75
Cancelled (137,722) 20.00 - 52.94
----------------------------
Outstanding (held by 192
optionees) at June 30, 1994 2,358,120 $13.81 - $63.50
Options exercisable at:
June 30, 1994 1,163,598
June 30, 1993 1,161,607
10
Leases
- -------------
The Company leases transportation equipment and a limited number
of its manufacturing, warehousing and office facilities. Most
leases are classified as operating leases and will expire over
the next four years. Future minimum lease payments are
$11,847,000, and do not exceed $5,400,000 in any one year.
Rental expense for continuing operations was $11,875,000 in
1994, $14,365,000 in 1993, and $12,384,000 in 1992.
Space not occupied by the Company in its headquarters building
is let to other tenants under operating leases expiring through
1998. Future minimum rentals to be received are $5,448,000,
and do not exceed $1,900,000 in any one year.
26
- --
</PAGE>
<PAGE>
11
Other Expense (Income), Net
- ------------------------------
<TABLE>
<CAPTION>
<S> <C> <C> <C>
The major components are (in thousands):
1994 1993 1992
- ------------------------------------------------------------------------------------------------
Amortization of intangibles $ 23,896 $ 22,058 $ 22,962
Equity in earnings of affiliates (5,926) (9,979) (13,908)
Interest income (5,292) (2,931) (4,557)
Other, net (11,804) (6,832) (11,742)
----------------------------------------------
Total $ 874 $ 2,316 $ (7,245)
</TABLE>
12
Income Taxes
- --------------------
<TABLE>
<CAPTION>
Income tax expenses are (in thousands):
<S> <C> <C> <C>
1994 1993 1992
- ------------------------------------------------------------------------------------------------
Current
Federal $ 86,686 $ 57,776 $ 62,332
State 17,562 13,815 12,789
Foreign 3,569 3,651 6,325
--------------------------------------------
Total current 107,817 75,242 81,446
--------------------------------------------
Deferred
Federal 16,416 26,635 13,028
State 1,173 4,147 2,129
Foreign 1,234 1,243 1,300
--------------------------------------------
Total deferred 18,823 32,025 16,457
--------------------------------------------
Total expense $ 126,640 $ 107,267 $ 97,903
============================================
Effective income tax rate 41.3% 39.0% 40.9%
============================================
</TABLE>
The reconciliation between the Company's effective income tax
rate and the statutory federal income tax rate is as follows:
1994 1993 1992
---------------------
Federal statutory rate 35.0% 34.0% 34.0%
State income taxes, net
of federal tax benefit 3.9 4.2 4.1
Taxes on foreign earnings 1.1 1.2 2.4
Retroactive effect of federal
rate increase 1.0 - -
Other 0.3 (0.4) 0.4
----------------------
Effective income tax rate 41.3% 39.0% 40.9%
The net deferred income tax liabilities (assets), both current
and non-current at June 30, result from the tax effects of the
following temporary differences (in thousands):
1994 1993
--------------------
Amortization/depreciation $64,268 $87,016
Safe harbor lease agreements 32,145 33,232
Unremitted foreign earnings 35,057 30,841
Restructuring expense (12,812) (19,469)
Postretirement health benefits (18,402) (15,396)
Other 14,241 8,119
--------------------
Net $114,497 $124,343
The June 30, 1994 deferred income tax liability reflects a
$28,466,000 decrease which is not included in the 1994
deferred tax expense. This results from the reversal of a
prior year tax accrual recorded in conjunction with the
1991 purchase of Pine-Sol. The accrual was deemed unnecessary
as a result of the 1993 tax law change. The offset to this
adjustment was a reduction in brands, trademarks, patents and
other intangibles in 1994.
13
Employee Benefit Plans
- ---------------------------
Retirement Income Plans
The Company has defined benefit pension plans for substantially
all its domestic employees. Benefits are based on either
employee years of service and compensation or stated dollar
amount per year of service. The Company is the sole
contributor to the plans, in amounts deemed necessary to
provide benefits and to the extent deductible for federal
income tax purposes. Assets of the plans consist primarily
of stocks and bonds. The components of pension expense are
(in thousands):
1994 1993 1992
------------------------------
Service cost - benefits earned
in current year $5,970 $5,646 $5,530
Interest on projected benefit
obligation 7,753 6,552 5,840
Return on plan assets:
Actual gain (2,762) (9,750) (7,946)
Deferral of the actual gain in
excess of (less than) the
assumed rate of 8% in 1994,
and 1993 and 9% in 1992 (6,029) 1,766 (442)
Other gains, including
amortization over 15 years
of the net pension
transition asset at
July 1, 1985 (790) (1,245) (1,369)
-----------------------------------
Total pension expense $4,142 $2,969 $1,613
===================================
27
- --
</PAGE>
<PAGE>
The plans' funded status at June 30 is as follows
(in thousands):
1994 1993
Actuarial present value of the
accumulated benefit obligation,
including vested benefits
of $84,027 in 1994 and $72,497 in 1993 $ 89,531 $ 75,674
====================
Plans' assets at market value 119,100 107,699
Projected benefit obligation, determined
using a discount rate of 8% and
including the effect of an assumed
annual increase in future compensation
levels of 4.5% in 1994 and 4% in 1993 111,846 91,466
---------------------
Excess of plans' assets over pension
obligation 7,254 16,233
Less deferrals:
Remaining unamortized balance of net
pension transition asset at July 1, 1985 (10,338) (11,985)
Prior service cost 5,748 2,817
---------------------
Other net losses (gains) 14,330 (679)
Accrued pension asset included in
other assets $ 16,994 $ 6,386
====================
The Company has defined contribution plans for most of its
domestic employees not covered by collective bargaining
agreements, to which it contributes based on its earnings or
participants' contributions. The Company also participates
in multi-employer pension plans for certain of its hourly-paid
production employees and contributes to those plans based on
collective bargaining agreements. The aggregate cost of the
defined contribution and multi-employer pension plans was
$12,753,000 in 1994, $11,570,000 in 1993, and $7,970,000 in 1992.
Retirement Health-Care
The Company provides certain health-care benefits for employees
who meet age, participation and length of service requirements
at retirement. The plans pay stated percentages of covered
expenses after annual deductibles have been met. Benefits paid
take into consideration payments by Medicare. The plans are not
prefunded, and the Company has the right to modify or terminate
certain of these plans.
Postretirement health-care expense consists of the following
(in thousands):
1994 1993 1992
- ----------------------------------------------------------------
Service cost - benefits earned
in the current year $ 2,823 $ 2,898 $ 2,798
Interest on projected benefit
obligation 2,881 2,749 2,471
------------------------------
Total postretirement health-care
expense $ 5,704 $ 5,647 $ 5,269
=============================
Benefits paid were $1,058,000, $1,060,000 and $550,000 in 1994,
1993 and 1992, respectively.
The accumulated postretirement benefit obligation (APBO)
includes the following at June 30 (in thousands):
1994 1993
- -------------------------------------------------------------
Retirees $ 10,260 $ 8,359
Fully eligible active employees 6,731 7,608
Other active employees 21,976 24,232
Unrecognized net gains 6,599 -
-----------------------
Total unfunded accrued benefit
obligation included in other
obligations $ 45,566 $ 40,199
========================
Included in 1994 amounts is $1,900,000 representing the
assumption of postretirement health-care liabilities related
to the acquisition of the S.O.S brands. The assumed health-care
cost trend rate used in measuring the APBO was 12 percent for
1995, gradually declining to 5.5 percent over the next 10 years.
Changes in these rates can have a significant effect on
amounts reported. A one percentage point increase in the
trend rates would increase the 1994 accumulated postretirement
benefit obligation by $6,742,000 and increase 1994 expense by
$805,000. The discount rate used to determine the APBO was 8
percent.
Discontinued Operations
As a result of the Company's decision to discontinue operations
of its bottled water and frozen foods businesses, curtailment
gains of $2,104,000 for pension benefits and $1,228,000 for
postretirement health-care were recognized in 1994 in income
from discontinued operations.
Postemployment Benefits
The Financial Accounting Standards Board issued SFAS No. 112,
"Employers' Accounting for Postemployment Benefits", in November
1992. This Statement requires the accrual of benefits provided
by the Company to former or inactive employees after employment,
but before retirement. The Company adopted SFAS No. 112 in
1994, and included the cumulative expense, which was not
material, in operations.
14
Contingent Liabilities
- ---------------------------
The Company is subject to various lawsuits and claims
arising out of its businesses which include contracts,
environmental issues, product liability, patent and trademark
matters, and taxes. In the opinion of management, after
consultation with counsel, the disposition of these matters
will not have a material adverse effect, individually or in
the aggregate, on the Company's financial position, results
of operations, or liquidity.
28
- --
</PAGE>
<PAGE>
Responsibility for Consolidated
Financial Statements
The management of the Company is responsible for the integrity
and objectivity of the financial statements included in this
Annual Report. In fulfilling this responsibility, management
maintains an effective system of internal accounting controls
and supports a comprehensive internal audit program.
The Board of Directors has an Audit Committee consisting of
independent directors. The Committee meets regularly with
management, internal auditors and Deloitte & Touche,
independent certified public accountants. Deloitte &
Touche and the internal auditors have full authority to meet
with the Audit Committee, either with or without management
representatives present.
Deloitte & Touche has completed its audit of the accompanying
consolidated financial statements. Their report appears below.
Independent Auditors' Report
[DELOITTE & TOUCHE LOGO]
The Stockholders and Board of Directors
of The Clorox Company:
We have audited the accompanying consolidated balance
sheets of The Clorox Company and its subsidiaries as of
June 30, 1994 and 1993, and the related statements of
consolidated earnings, consolidated stockholders' equity and
consolidated cash flows for the years ended June 30, 1994,
1993, and 1992. 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 generally
accepted auditing standards. 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 Clorox Company and its subsidiaries at
June 30, 1994 and 1993, and the results of their
operations and their cash flows for the years ended
June 30, 1994, 1993 and 1992 in conformity with generally
accepted accounting principles.
As discussed in Note 1 to the consolidated financial
statements, in 1992 the Company changed its method of
accounting for postretirement benefits other than pensions
to conform with Statement of Financial Accounting
Standards No. 106.
/S/ DELIOTTE & TOUCHE
Deloitte & Touche
Oakland, California
August 10, 1994
29
- --
</PAGE>
<PAGE>
<TABLE>
<CAPTION>
Financial Summary
The Clorox Company
Years ended June 30 94 93 92 91 90 89 88 87 86 85
- ----------------------------------------------------------------------------------------------------------------------------
In thousands,
except per-share
data.
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Operations
Net sales $1,836,949 $1,634,171 $1,547,057 $1,468,370 $1,309,019 $1,199,293 $1,033,747 $ 934,985 $ 893,699 $ 873,162
------------------------------------------------------------------------------------------------------------
Percent change 12.4 5.6 5.4 12.2 9.1 16.0 10.6 4.6 2.4 8.8
------------------------------------------------------------------------------------------------------------
Cost of
products sold 820,434 724,753 678,504 672,405 601,322 548,434 450,527 422,149 415,542 418,457
Operating
expenses 690,584 613,061 612,074 677,468<F4>498,084 458,085 396,910 356,065 326,531 319,151
Other 19,298 21,172 17,382 21,315 (30,755) (28,189) (10,897) (17,588) (5,356) (6,482)
------------------------------------------------------------------------------------------------------------
Total costs
and expenses 1,530,316 1,358,986 1,307,960 1,371,188 1,068,651 978,330 836,540 760,626 736,717 731,126
------------------------------------------------------------------------------------------------------------
Earnings before
income taxes 306,633 275,185 239,097 97,182 240,368 220,963 197,207 174,359 156,982 142,036
Income taxes 126,640 107,267 97,903 37,361 87,456 79,718 73,460 75,394 70,389 62,125
------------------------------------------------------------------------------------------------------------
Earnings from
continuing
operations 179,993 167,918 141,194 59,821 152,912 141,245 123,747 98,965 86,593 79,911
Earnings (losses)
from
discontinued
operations 32,064<F1> (867) (23,429)<F2>(7,075) 714 (17,101)<F5> 8,823 5,934 9,017 6,213
Cumulative effect
of accounting
change - - (19,061)<F3> - - - - - - -
------------------------------------------------------------------------------------------------------------
Net earnings $ 212,057 $ 167,051 $ 98,704 $ 52,746 $ 153,626 $ 124,144 $ 132,570 $ 104,899 $ 95,610 $ 86,124
============================================================================================================
Percent change,
continuing
operations 7.2 18.9 136.0 (60.9) 8.3 14.1 25.0 14.3 8.4 10.2
Common Stock<F6>
Weighted average
shares
outstanding 53,800 54,698 54,366 54,063 54,873 55,333 55,127 54,652 54,268 53,942
Earnings (losses)
per common share:
Earnings from
continuing
operations $3.35 $3.07 $2.60 $1.11<F4> $2.79 $2.55 $2.26 $1.82 $1.60 $1.49
Earnings (losses)
from discontinued
operations 0.59<F1> (0.02) (0.43)<F2> (0.13) 0.01 (0.31)<F5> 0.16 0.11 0.17 0.12
Cumulative effect
of accounting
change - - (0.35)<F3> - - - - - - -
------------------------------------------------------------------------------------------------------------
Net earnings $3.94 $3.05 $1.82 $0.98 $2.80 $2.24 $2.42 $1.93 $1.77 $1.61
============================================================================================================
Dividends $1.80 $1.71 $1.59 $1.47 $1.29 $1.09 $0.92 $0.79 $0.70 $0.62
Stockholders'
equity at end
of year 17.04 16.03 14.92 14.47 15.00 14.19 13.19 11.51 10.31 9.18
Other Data
Continuing
operations
Working capital
(deficiency) $ 128,443 $ 160,208 $ (25,322) $ 115,626 $ 151,602 $ 265,569 $ 145,780 $ 225,596 $ 198,290 $ 160,031
Property, plant
and equipment
- net 532,600 538,101 508,629 441,794 441,681 348,526 312,068 207,712 193,503 165,000
Property
additions 56,627 72,141 114,353 89,009 134,099 66,551 135,702 48,630 59,408 37,858
Long-term
debt 216,088 204,000 203,627 405,341 5,807 5,192 20,739 24,513 33,626 35,935
Percent return
on net sales 9.8 10.3 9.1 4.1 11.7 11.8 12.0 10.6 9.7 9.2
Current ratio 1.3 1.4 0.9 1.3 1.7 1.9 1.5 2.3 2.2 1.9
Total assets 1,697,569 1,649,230 1,589,993 1,656,872 1,124,147 1,189,894 1,121,232 911,097 825,748 753,994
Stockholders'
equity 909,417 879,294 813,741 784,276 810,514 786,176 712,854 616,447 549,793 485,856
Percent return
on average
stockholders'
equity 24.2 19.8 12.3 6.4 19.1 16.4 19.9 18.0 18.5 18.8
</TABLE>
[FN]
<F1> Includes net gain on the sale of discontinued businesses of
$31,430 or $.58 per share.
<F2> Includes special charges for the revaluation of certain
intangible assets. See Note 2 to Consolidated Financial
Statements.
<F3> Nonrecurring charge to recognize the accumulated
postretirement health benefit obligation at July 1, 1991,
resulting from the adoption of SFAS No. 106. See Note 1
to Consolidated Financial Statements. (Operating results
preceding 1992 were not restated for the adoption of this
new standard.)
<F4> Includes a charge for restructuring of $125,250 or $1.45
per share.
<F5> Includes net loss on the disposal of Olympic HomeCare
Products of $20,000 or $.36 per share.
<F6> Weighted average shares outstanding and
earnings per share from 1985 through 1989
assume full dilution from a note converted
during 1989.
30
- --
31
- --
</PAGE>
<PAGE>
<TABLE>
CAPTION>
Quarterly Data
The Clorox Company
1st 2nd 3rd 4th
Quarter Quarter Quarter Quarter Year
- ------------------------------------------------------------------------------------------------------------------------
In thousands, except per-share amounts.
<S> <C> <C> <C> <C> <C>
Year Ended June 30, 1994
Net sales $ 449,744 $ 370,844 $ 481,928 $ 534,433 $ 1,836,949
Cost of products sold $ 193,828 $ 163,386 $ 211,964 $ 251,256 $ 820,434
Earnings from
Continuing operations $ 46,314 $ 30,586 $ 49,515 $ 53,578 $ 179,993
Discontinued operations 32,064<F1> - - - 32,064<F1>
---------------------------------------------------------------
Net earnings $ 78,378 $ 30,586 $ 49,515 $ 53,578 $ 212,057
Per common share
Net earnings $1.44<F1> $0.57 $0.93 $1.00 $3.94<F1>
Dividends 0.45 0.45 0.45 0.45 1.80
Market price (NYSE)
High 55 3/8 55 1/4 55 3/4 52 1/4 55 3/4
Low 47 1/8 51 1/2 47 1/4 47 47
Year-end 48 7/8
Price/earnings ratio, year end 12
Year Ended June 30, 1993
Net sales $ 394,657 $ 327,354 $ 435,559 $ 476,601 $1,634,171
Cost of products sold $ 170,135 $ 141,272 $ 185,897 $ 227,449 $ 724,753
Earnings (losses) from
Continuing operations $ 44,393 $ 27,032 $ 46,526 $ 49,967 $ 167,918
Discontinued operations 203 211 (1,106) (175) (867)
---------------------------------------------------------------
Net earnings $ 44,596 $ 27,243 $ 45,420 $ 49,792 $ 167,051
Per common share
Net earnings $0.82 $0.50 $0.83 $0.91 $3.05
Dividends 0.42 0.42 0.42 0.45 1.71
Market price (NYSE)
High 48 1/4 47 51 7/8 53 3/8 53 3/8
Low 41 1/8 40 3/4 44 46 3/4 40 3/4
Year-end 52 1/8
Price/earnings ratio, year end 17
</TABLE>
[FN]
<F1> Includes net gain on the sale of discontinued businesses
of $31,430 or $.58 per share.
32
- --
</PAGE>
<PAGE>
The Company's Principal Retail Brands
United BBQ Bag Single-use, lightable bag of
States charcoal briquets
Brita Water filter systems
Clorox Regular, Fresh Scent and
Lemon Fresh liquid bleach
Clorox Toilet bowl cleanser and
automatic toilet bowl
cleaner
Clorox
Clean-Up Dilutable household cleaner
and spray cleaner
Clorox 2 Dry and liquid, and regular
and Lemon Fresh all-fabric
bleach
Combat Insecticides: ant and roach
bait stations; ant and roach
aerosols and foggers
Control Cat litter
Formula 409 All-purpose spray cleaner and
glass & surface cleaner
Fresh Step Cat litter
Hidden Valley
Ranch Bottled salad dressing; dry
salad dressing and party dip
mixes; bottled low-fat salad
dressing; bottled salad dress-
ings for kids
Hidden Valley
Ranch Seasoned mini-croutons
Salad Crispins
K.C. Masterpiece Barbecue sauce
Kingsford Charcoal briquets, charcoal
briquets with mesquite and
charcoal lighter
Kitchen Bouquet Browning and seasoning sauce
and gravy aid
Liquid-Plumr Drain opener, regular and
professional strength, and
build-up remover
Match Light Instant lighting charcoal
briquets
Pine-Sol Cleaner and spray cleaner
Scoop Fresh Scoopable cat litter
Soft Scrub Mild abrasive liquid cleanser,
regular, with bleach and with
lemon
S.O.S Steel wool soap pads and
home cleaning products
Stain Out Soil and stain remover
SuperBait Insecticides: roach bait
stations
Tackle Household cleaner disinfectant
Tilex Instant mildew remover and
soap scum remover
Tuffy Mesh scrubber
Professional Products
Hidden Valley Ranch Salad dressings
K.C. Masterpiece Barbecue sauce
Kitchen Bouquet Browning and seasoning sauce and
gravy aid
Clorox Liquid bleach
Clorox Toilet bowl cleanser
Clorox Clean-Up Dilutable cleaner
Formula 409 All-purpose spray cleaner and glass
& surface cleaner
Liquid-Plumr Drain opener
Pine-Sol Cleaner
Tilex Instant mildew remover
Maxforce Professional insecticides; ant and
roach baits; roach gel
Principal
International Markets
Argentina
Canada
Chile
Colombia
Dominican Republic
Egypt
Hong Kong
Hungary
Japan
Malaysia
Mexico
Panama
Poland
Puerto Rico
Republic of Korea
Saudi Arabia/Gulf States
Venezuela
Yemen Arab Republic
Clorox also exports products to more than
70 other countries.
36
- --
</PAGE>
EXHIBIT 21
- ----------
(to Form 10-K)
THE CLOROX COMPANY
- ------------------
SUBSIDIARIES OF THE REGISTRANT
(100% owned unless otherwise indicated)
Subsidiaries Jurisdiction of Incorporation
- ------------ -----------------------------
Brita (USA), Inc. Delaware
The Clorox Company of Canada, Ltd. Canada
The Clorox International Company Delaware
Clorox Argentina S.A. (90%) Argentina
Clorox Chile S.A. Chile
Clorox Korea Ltd. Korea
Clorox de Mexico, S.A. de C.V. Mexico
The Clorox Company of Puerto Rico Delaware
Colgate-Clorox (Far East) Ltd. Hong Kong
(50%)
Corporacion Clorox de Venezuela, Venezuela
S.A.
Henkel Iberica, S.A. (20%) Spain
The Household Cleaning Products Egypt
Company of Egypt, Ltd. (49%)
Mohammed Ali Abudawood and Saudi Arabia
Company for Industry (30%)
National Cleaning Products Saudi Arabia
Company Limited (30%)
Productos Del Hogar, C. por A. Dominican Republic
(49%)
Tecnoclor, S.A. (49%) Colombia
United Cleaning Products Mfg. Yemen Arab Republic
Co. Ltd. (33%)
Yuhan-Clorox Co., Ltd. (50%) Korea
The Clorox Professional Products Company Delaware
<PAGE>
EXHIBIT 21 (continued)
- ----------------------
(to Form 10-K)
The HVR Company Delaware
The Kingsford Products Company Delaware
The Company also markets its branded products through
licensees and distributors in Australia, Canada, Costa
Rica, El Salvador, Guatemala, Haiti, Honduras, Jamaica,
Japan, Malaysia, Netherlands Antilles, Panama, Peru,
Trinidad, Venezuela and Yemen Arab Republic and other
countries.
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in The Clorox
Company Registration Statements No. 33-4083 on Form S-3,
Nos. 33-41131, 33-41277, 2-88106 (Post-Effective Amendment
No. 2) and 33-24582 on Form S-8 of our reports dated
August 10, 1994, appearing in and incorporated by reference
in this Annual Report on Form 10-K of The Clorox Company for
the year ended June 30, 1994.
/s/Deloitte & Touche LLP
San Francisco, California
September 26, 1994
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION FROM THE
FINANCIAL STATEMENTS OF THE CLOROX COMPANY FOR THE FISCAL YEAR
ENDED JUNE 30, 1994, AS PRESENTED IN THE CLOROX COMPANY'S
FORM 10-K FOR SUCH PERIOD, AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1994
<PERIOD-START> JUL-01-1993
<PERIOD-END> JUN-30-1994
<CASH> 30,045
<SECURITIES> 85,877
<RECEIVABLES> 251,364
<ALLOWANCES> 1,521
<INVENTORY> 105,948
<CURRENT-ASSETS> 504,275
<PP&E> 850,522
<DEPRECIATION> 317,922
<TOTAL-ASSETS> 1,697,569
<CURRENT-LIABILITIES> 375,832
<BONDS> 216,088
<COMMON> 55,422
0
0
<OTHER-SE> 853,995
<TOTAL-LIABILITY-AND-EQUITY> 1,697,569
<SALES> 1,836,949
<TOTAL-REVENUES> 1,836,949
<CGS> 820,434
<TOTAL-COSTS> 1,511,018
<OTHER-EXPENSES> 874
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 18,424
<INCOME-PRETAX> 306,633
<INCOME-TAX> 126,640
<INCOME-CONTINUING> 179,993
<DISCONTINUED> 32,064
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 212,057
<EPS-PRIMARY> 3.94
<EPS-DILUTED> 0
</TABLE>
