<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or Section
240.14a-12
THE CLOROX COMPANY
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2) or
Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
1) Title of each class of securities to which transaction applies:
------------------------------------------------------------------------
2) Aggregate number of securities to which transaction applies:
------------------------------------------------------------------------
3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
------------------------------------------------------------------------
4) Proposed maximum aggregate value of transaction:
------------------------------------------------------------------------
5) Total fee paid:
------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
1) Amount Previously Paid:
------------------------------------------------------------------------
2) Form, Schedule or Registration Statement No.:
------------------------------------------------------------------------
3) Filing Party:
------------------------------------------------------------------------
4) Date Filed:
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<PAGE>
[CLOROX LOGO]
THE CLOROX COMPANY
---------
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
-------------
ANNUAL MEETING OF
STOCKHOLDERS
NOVEMBER 15, 1995
<PAGE>
[CLOROX LOGO]
THE CLOROX COMPANY
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON NOVEMBER 15, 1995
The Annual Meeting of Stockholders of The Clorox Company, a Delaware
corporation (the "Company"), will be held at 9:00 A.M. on Wednesday, November
15, 1995, at the offices of the Company, 1221 Broadway, Oakland, California, for
the following purposes:
1. To elect a board of thirteen directors to hold office until the next
annual election of directors;
2. To ratify the appointment of Deloitte & Touche LLP as independent
auditors for the fiscal year ending June 30, 1996; and
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The board of directors has fixed the close of business on September 18, 1995
as the record date for determining the stockholders entitled to notice of, and
to vote at, the meeting and any adjournment thereof. A list of such stockholders
will be available at the time and place of the meeting and, during the ten days
prior to the meeting, at the office of the Secretary of the Company at 1221
Broadway, Oakland, California.
A copy of the Company's Annual Report for the fiscal year ended June 30,
1995, containing financial statements, is included with this mailing.
IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THIS MEETING. EVEN IF YOU
PLAN TO ATTEND THE MEETING, WE HOPE THAT YOU WILL PROMPTLY MARK, SIGN, DATE AND
RETURN THE ENCLOSED TWO-SIDED PROXY IN THE ENCLOSED ENVELOPE. THIS WILL NOT
LIMIT YOUR RIGHT TO ATTEND OR VOTE AT THE MEETING.
By Order of the Board of Directors
Edward A. Cutter,
SENIOR VICE PRESIDENT -- GENERAL
COUNSEL
AND SECRETARY
September 28, 1995
<PAGE>
THE CLOROX COMPANY
1221 BROADWAY
OAKLAND, CALIFORNIA 94612
PROXY STATEMENT
This proxy statement is furnished in connection with the solicitation of proxies
by the board of directors of The Clorox Company, a Delaware corporation (the
"Company"), for use at the Annual Meeting of Stockholders of the Company, to be
held at 9:00 A.M. on November 15, 1995 at the above offices of the Company (the
"Annual Meeting").
THE PROXY
A stockholder giving the enclosed proxy may revoke it at any time before it is
used by giving written notice of revocation to the Secretary of the Company or
by voting in person at the Annual Meeting.
VOTING AT THE ANNUAL MEETING
The only voting securities of the Company are its shares of common stock $1.00
par value (the "Common Stock"), of which 52,256,147 were outstanding and
entitled to vote at the close of business on September 18, 1995. Only
stockholders of record at the close of business on September 18, 1995 are
entitled to vote at the Annual Meeting. The holders of the Common Stock are
entitled to one vote per share on each matter submitted to a vote of
stockholders.
The holders of a majority of the issued and outstanding Common Stock, present in
person or by proxy, will constitute a quorum for the transaction of business at
the Annual Meeting or any adjournment thereof. Abstentions and broker non-votes
are counted as shares that are present and entitled to vote for purposes of
determining the presence of a quorum. Abstentions are not counted as votes cast
on the proposed election of directors, but will have the same legal effect as a
vote against the ratification of the appointment of independent auditors. Broker
non-votes are not counted as votes cast on any matter to which they relate.
This proxy statement and the accompanying proxy are first being sent or given to
stockholders on or about September 28, 1995.
NOMINEES FOR ELECTION AS DIRECTORS
At the Annual Meeting, thirteen persons will be elected as members of the board
of directors, each for a one-year term. The Nominating Committee of the board of
directors has nominated the thirteen persons listed below for election at the
Annual Meeting. All of such nominees, except Dr. Klaus Morwind, were elected at
the Company's Annual Meeting of Stockholders held on November 16, 1994.
The proxies given to the proxyholders will be voted or not voted as directed
thereon and, if no direction is given, will be voted FOR these thirteen
nominees. The board of directors knows of no reason why any of these nominees
should be unable or unwilling to serve. However, if for any reason any nominee
should be unable or unwilling to serve, the proxies will be voted for the
election of such other person to the office of director as the board of
directors may nominate in the place of such nominee.
Certain information with respect to each nominee appears on the following pages,
including age, period or periods served as a director, position (if any) with
the Company, business experience during at least the past five years and
directorships of other publicly-owned corporations.
1
<PAGE>
<TABLE>
<CAPTION>
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NAME, PRINCIPAL OCCUPATION DIRECTOR
AND OTHER INFORMATION SINCE
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<S> <C> <C>
WILLIAM F. AUSFAHL Group Vice President and Chief Financial 1984
Officer of the Company.
Mr. Ausfahl is the senior executive officer responsible for
the financial activities of the Company, which include
controllership, treasury, tax and audit, and for investor
relations and public affairs. He joined the Company in
December 1982, and became Group Vice President and Chief
Financial Officer in January 1983. Age: 55.
[PHOTO]
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DANIEL BOGGAN, JR. Group Executive Director, Education 1990
Services for the National Collegiate Athletic Association.
Mr. Boggan became the Group Executive Director for Education
Services for the National Collegiate Athletic Association in
November 1994. Previously, he had been Vice Chancellor for
business and administrative services at the University of
California at Berkeley since 1986. Age: 48.
[PHOTO]
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JOHN W. COLLINS Former President and Chief Operating Officer 1993
of the Company.
Mr. Collins was President and Chief Operating Officer of the
Company from March 1986 through December 1989. He was also a
Director of the Company from March 1986 through October 1989.
Beginning January 1990, he was on a paid leave of absence
which extended until his retirement on December 31, 1993. He
was not active in the Company's
affairs from January 1990 until his reelection to the board [PHOTO]
of directors in January 1993. Age: 64.
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</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
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NAME, PRINCIPAL OCCUPATION DIRECTOR
AND OTHER INFORMATION SINCE
- -----------------------------------------------------------------------------------------
<S> <C> <C>
URSULA FAIRCHILD Professional Photographer. 1976
Mrs. Fairchild is a professional photographer, as well as a
member of the Supervisory Board of Henkel KGaA, Duesseldorf,
Germany (manufacturer of household products and chemicals).
She is a member of the Henkel family which controls Henkel
KGaA and is nominated pursuant to an understanding between
the Company and Henkel KGaA (see
Certain Relationships and Transactions, page 9 below). Age: [PHOTO]
64.
- ---------------------------------------------------------------------------------
JUERGEN MANCHOT Vice-Chairman of the Shareholders' Commit- 1989
tee, Henkel KGaA.
Dr. Manchot is the Vice-Chairman of the Shareholders'
Committee of Henkel KGaA, Duesseldorf, Germany (manufacturer
of household products and chemicals). He is a member of the
Henkel family which controls Henkel KGaA and is nominated
pursuant to an understanding between the Company and Henkel
KGaA (See Certain Relationships
and Transactions, page 9 below). Dr. Manchot is a director of [PHOTO]
Loctite Corp. and Transaction Network Services Inc. Age: 58.
- ---------------------------------------------------------------------------------
DEAN O. MORTON Retired Executive Vice President and Chief 1991
Operating Officer, Hewlett-Packard Company.
Mr. Morton was the Executive Vice President and the Chief
Operating Officer of Hewlett-Packard Company until his
retirement in 1993. Mr. Morton is a director of ALZA
Corporation, Raychem Corporation, Tencor Instruments,
Centigram Communications Corporation, Kaiser Foundation
Health Plan, Inc. and Kaiser Foundation Hospitals. He is a
trustee of the State Street Group of Funds, the MetLife-State
Street Group of Mutual Funds and Director of the Metropolitan [PHOTO]
Series Funds, Inc. and MetLife Portfolios, Inc. Age: 63.
- ---------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
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NAME, PRINCIPAL OCCUPATION DIRECTOR
AND OTHER INFORMATION SINCE
- -----------------------------------------------------------------------------------------
<S> <C> <C>
KLAUS MORWIND Executive Vice President and Personally Liable Nominated
Associate, Henkel KGaA. in 1995
Dr. Morwind is a member of the Board of Directors and the
Management Board of Henkel KGaA, Duesseldorf, Germany
(manufacturer of household products and chemicals). He joined
Henkel KGaA in 1969 and held several management positions
before assuming his current responsibility. Dr. Morwind is
nominated pursuant to an understanding
between the Company and Henkel KGaA (see Certain [PHOTO]
Relationships and Transactions, page 9 below). Age: 52.
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EDWARD L. SCARFF Private Investor. 1986
Mr. Scarff has been a private investor for more than five
years. From 1983 through 1994, he was Chairman of the Board
and Chief Executive Officer of Arcata Corporation (commercial
printer and manufacturer of redwood lumber). Age: 64.
[PHOTO]
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LARY R. SCOTT Chairman and Chief Executive Officer of
WorldWay Corporation (a subsidiary of Arkansas Best 1989
Corporation).
Mr. Scott is Chairman and Chief Executive Officer of WorldWay
Corporation, having been elected to those positions in 1994
and 1993, respectively. Previously, he had been President of
Alexis Consulting, a transportation consulting firm. From
1985 to 1990, Mr. Scott was President and Chief Executive
Officer of Consolidated Freightways, Inc., a
worldwide transportation company. Mr. Scott is a director of [PHOTO]
WorldWay Corporation. Age: 59.
- ---------------------------------------------------------------------------------
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
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NAME, PRINCIPAL OCCUPATION DIRECTOR
AND OTHER INFORMATION SINCE
- -----------------------------------------------------------------------------------------
<S> <C> <C>
FORREST N. SHUMWAY Retired Vice Chairman of the Board, 1985
Allied-Signal Inc.
Mr. Shumway is the retired Vice Chairman of the Board of
Allied-Signal Inc. (manufacturer of products in the
aerospace, aviation, chemical and energy industries).
Previously, he was Chief Executive Officer (1968-1985) and
Chairman of the Board (1980-1985) of The Signal Companies,
Inc. until its merger into Allied-Signal Inc. Mr. Shumway is
a director of Aluminum Company of America, American President
Companies, Ltd., First Interstate Bancorp and Transamerica [PHOTO]
Corporation. Age: 68.
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G. CRAIG SULLIVAN Chairman of the Board and Chief Executive 1992
Officer of the Company.
Mr. Sullivan has been Chairman of the Board and Chief
Executive Officer of the Company since July 1, 1992.
Previously, he was Vice Chairman and Chief Executive Officer
(May-June, 1992); Group Vice President (1989-1992); Vice
President-Household Products (1984-1989); and Vice
President-Food Service Products Division (1981-1984). He
joined the Com-
pany in 1971. Mr. Sullivan is a director of American [PHOTO]
President Companies, Ltd. Age: 55.
- ---------------------------------------------------------------------------------
JAMES A. VOHS Retired Chairman of Kaiser Foundation Health 1988
Plan, Inc. and Kaiser Foundation Hospitals.
Mr. Vohs retired as Chairman of the Board of Kaiser
Foundation Health Plan, Inc. and Kaiser Foundation Hospitals
in March 1992. Previously, he had served as President
(1975-1991) and Chief Executive Officer (1980-1991).
Currently, Mr. Vohs serves as Deputy Chairman of the Board of
Directors of the Federal Reserve Bank of San Francisco.
Age: 66. [PHOTO]
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</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
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NAME, PRINCIPAL OCCUPATION DIRECTOR
AND OTHER INFORMATION SINCE
- -----------------------------------------------------------------------------------------
<S> <C> <C>
C. A. (AL) WOLFE President, Al Wolfe Associates, Inc. 1991
Mr. Wolfe is the President of Al Wolfe Associates, Inc., a
marketing and advertising consulting firm. He is the retired
President of the U.S. Division of DDB Needham Worldwide, a
major advertising agency. Previously, Mr. Wolfe had been
Executive Vice President of N.W. Ayer and Executive Vice
President and General Manager of Wells, Rich,
Greene advertising agencies. He is a director of Dolphin [PHOTO]
Software, Inc. Age: 63.
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</TABLE>
ORGANIZATION OF THE BOARD OF DIRECTORS
The board of directors has established six standing committees: the Executive
Committee, the Finance Committee, the Audit Committee, the Nominating Committee,
the Employee Benefits and Management Compensation Committee, and the Board
Administration and Public Policy Committee. The Finance, Audit, Nominating,
Employee Benefits and Management Compensation, and the Board Administration and
Public Policy Committees consist only of non-management, independent directors,
with the exception of the Board Administration and Public Policy Committee on
which Mr. Sullivan serves as the chairman and secretary.
EXECUTIVE COMMITTEE. The Executive Committee, consisting of directors Collins,
Fairchild, Krautter, Manchot, Morton, Scarff, Shumway, Sullivan and Vohs, is
delegated all of the powers of the board of directors except certain powers
reserved by law to the full board. In addition to being available to meet
between regular board meetings on occasions when board action is required but
the convening of a full board is impracticable, the Executive Committee is
authorized to handle special assignments as requested from time to time by the
board. The Executive Committee held no meetings during fiscal year 1995.
FINANCE COMMITTEE. The Finance Committee consists of directors Boggan, Collins,
Krautter, Manchot, Morton, Scarff and Shumway and, working with the Company's
finance and operating personnel, considers and recommends to the board major
financial policies and actions of the Company. The Finance Committee held five
meetings during fiscal year 1995.
AUDIT COMMITTEE. The Audit Committee, composed of directors Fairchild,
Krautter, Scarff, Scott and Wolfe, is the principal link between the board and
the Company's independent public accountants. The Audit Committee makes
recommendations to the board regarding selection and employment of the Company's
independent auditors and, working with the Company's internal and external
auditors, monitors internal audit and control procedures. The Audit Committee
held three meetings during fiscal year 1995.
NOMINATING COMMITTEE. Directors Boggan, Fairchild, Scarff, Vohs and Wolfe are
members of the Nominating Committee. The Nominating Committee identifies and
recommends to the board of directors prospective candidates to be considered as
nominees for election to the board, including those recommended in writing by
any stockholder. The Nominating Committee held no meetings during fiscal year
1995. The Nominating Committee recommended director nominee Dr. Klaus Morwind to
the board of directors in July 1995.
COMPENSATION COMMITTEE. The Employee Benefits and Management Compensation
Committee (the "Compensation Committee") consists of directors Fairchild,
Manchot, Morton, Scott, Shumway and Vohs. The Compensation Committee establishes
and monitors the policies under which compensation is paid or awarded to the
Company's executive officers, determines executive compensation, grants stock
options, restricted stock and other cash or stock awards under the Company's
stock option, management incentive
6
<PAGE>
compensation and restricted stock plans, and reviews pension and other
retirement plans for adequacy and compliance with applicable regulations. The
Compensation Committee held three meetings during fiscal year 1995.
BOARD ADMINISTRATION AND PUBLIC POLICY COMMITTEE. The Board Administration and
Public Policy Committee consists of directors Boggan, Collins, Fairchild,
Krautter, Manchot, Morton, Scarff, Scott, Shumway, Sullivan, Vohs and Wolfe. The
Board Administration and Public Policy Committee establishes the rules and
procedures for board governance, is the principal link between the board and the
public community and has oversight responsibility for environmental matters. The
Board Administration and Public Policy Committee held one meeting during fiscal
year 1995.
The board of directors held nine meetings during fiscal year 1995. All directors
attended more than 75% of the meetings of the board and committees of which they
were members during fiscal year 1995.
Non-management directors received an annual fee of $27,500 for the 1995 fiscal
year. In addition, each non-management director received $1,000 for each meeting
of the board attended and $875 for each meeting of a board committee attended.
The chairperson of each committee received an additional $625 for each committee
meeting attended. In addition, each non-management director is entitled to
receive $1,000 per day for any special assignment requested of any such director
by the board. However, no such special assignment fees were paid in fiscal year
1995. Management directors receive no extra compensation for their service as
directors. Directors may elect to defer all or a part of such compensation. Any
such deferred amounts are credited with interest annually. Through October 1,
1994, the interest paid was based on the rate of interest paid by Wells Fargo
Bank on July 1 of each year for a $100,000 certificate of deposit with a
one-year term. Effective October 1, 1994, the interest paid became based on the
rate of interest paid by Wells Fargo Bank as its Prime Rate on July 1 of each
year. Wells Fargo Bank's Prime Rate on July 1, 1994 and July 1, 1995 was 7.25%
and 9%, respectively. All deferred fees are payable only in cash. In addition,
under the retirement plan for non-management directors, any directors who have
had at least five years' service may, after termination of service and upon
attainment of age 65, receive annual payments equal to the annual retainer they
received during their last twelve months of service for the number of calendar
years and quarters they served as a non-management director. Directors are
covered by the Company's business travel accident insurance plan for travel to
and from meetings of the board of directors.
Pursuant to the Company's 1993 Directors' Stock Option Plan, each non-management
director received a grant of stock options covering 500 shares of Common Stock
during fiscal year 1995. Such stock options vest in two equal installments on
each of the first two anniversary dates of the grant date and have an exercise
price equal to the fair market value on the grant date. Other than the
non-management director fees, the retirement benefits, the business travel
accident insurance coverage, and the stock option grants described above,
directors who are not employees of the Company do not receive any additional
form of direct compensation, nor do they participate in any of the Company's
employee plans.
7
<PAGE>
BENEFICIAL OWNERSHIP OF VOTING SECURITIES
The following table shows, as of July 31, 1995, the holdings of the Common Stock
by (i) the only entity or person known to the Company to be the beneficial owner
of more than 5% of the Common Stock, (ii) each director or nominee for director
and each of the five executive officers named in the Summary Compensation Table
on page 13, and (iii) all directors, nominees and executive officers of the
Company as a group:
<TABLE>
<CAPTION>
AMOUNT AND
NATURE OF
NAME OF BENEFICIAL
BENEFICIAL OWNER(1) OWNERSHIP(2) PERCENT OF CLASS(3)
- ------------------------------------------------ --------------- -------------------
<S> <C> <C>
HC Investments, Inc. (4) 15,428,100 29.42%
William F. Ausfahl 96,776 *
Daniel Boggan, Jr. 1,437 *
John W. Collins 24,155 *
Neil P. DeFeo 40,818 *
Ursula Fairchild 4,250 *
Jochen Krautter 2,250 *
Ramon A. Llenado 28,440 *
Peter N. Louras 49,234 *
Juergen Manchot 2,250 *
Dean O. Morton 3,250 *
Klaus Morwind 200 *
Edward L. Scarff 6,250 *
Lary R. Scott 4,548 *
Forrest N. Shumway 6,250 *
G. Craig Sullivan 118,821 *
James O. Vohs 2,250 *
C. A. (Al) Wolfe 3,250 *
All directors, nominees and executive officers 869,896 1.66%
as a group (34 persons) (5)
<FN>
- ---------
Notes:
* Does not exceed one percent of the outstanding shares.
(1) Correspondence to all executive officers and directors of the Company may
be mailed to 1221 Broadway, Oakland, California 94612. The address of HC
Investments, Inc. is 1100 North Market Street, Suite 780, Wilmington,
Delaware 19801.
(2) Each beneficial owner listed has sole voting and dispositive power (or
shares such power with her or his spouse) concerning the shares indicated.
These totals include the following number of shares of Common Stock which
such persons have the right to acquire through stock options exercisable
within 60 days of July 31, 1995: Mr. Sullivan -- 85,022; Mr. DeFeo --
25,113; Mr. Ausfahl -- 58,511; Mr. Louras -- 35,971; Mr. Llenado -- 19,018;
Mr. Collins -- 21,520; Mr. Krautter -- 250; each of the other directors --
1,250; and all directors, nominees and executive officers as a group (34
persons) -- 597,182.
(3) On July 31, 1995, there were 52,437,995 shares of Common Stock issued and
outstanding.
(4) Indirect wholly-owned United States subsidiary of Henkel KGaA of
Duesseldorf, Germany (manufacturer of household products and chemicals).
(5) Executive officers include the chief executive officer and all the vice
presidents of the Company.
</TABLE>
8
<PAGE>
CERTAIN RELATIONSHIPS AND TRANSACTIONS
The Company and Henkel KGaA are parties to a June 1981 letter agreement (as
amended in July 1986 and March 1987), relating to ownership by Henkel KGaA of
Common Stock and representation on the Company's board of directors. The July
1986 amendment assures Henkel KGaA of the right to nominate for election to the
board a minimum of two representatives so long as Henkel KGaA beneficially owns
at least 5% of the outstanding shares of Common Stock. Under the letter
agreement, as amended, Henkel KGaA's maximum permitted ownership of Common Stock
without consultation with the Company is limited to 30%, and Henkel KGaA has
affirmed that it considers its investment in the Company as long-term and its
role in the Company as that of a significant minority stockholder without an
active role in the management of the Company.
The Company and Henkel KGaA have entered into certain joint manufacturing,
marketing and product development arrangements in the United States and
internationally, either directly or through affiliates or joint venture
collaboration. No such arrangements, either individually or in the aggregate,
were material to the Company or Henkel KGaA during fiscal year 1995.
During fiscal year 1995, in connection with joining the Company, Frank A.
Tataseo, Vice President -- Sales of the Company, received a $150,000 mortgage
loan without interest for five years from the Company.
EMPLOYEE BENEFITS AND MANAGEMENT COMPENSATION
COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The membership of the Compensation Committee consists entirely of directors who
have never been employees of the Company (see page 6). The Compensation
Committee establishes and regularly determines executive compensation levels and
policies.
COMPENSATION PHILOSOPHY.
Compensation for executives is based on the principles that compensation must
(a) be competitive with other businesses to attract, motivate and retain the
talent needed to lead and grow the Company's business; (b) be linked to the
Company's performance in achieving its short-term and long-term goals; (c)
provide strong incentives for superior Company and individual performance and
adverse consequences for below target performance; and (d) encourage executive
officers to build their holdings of the Company's stock to align their goals
with those of the stockholders.
COMPENSATION OF EXECUTIVE OFFICERS.
The key components of the executive compensation program are base annual salary,
annual short-term incentive awards in the form of stock or cash under the
Management Incentive Compensation Plan (the "MIC Plan"), and long-term incentive
awards in the form of stock options and restricted stock under the Company's
1987 Long-Term Compensation Program. The mix of compensation elements is
determined by competitive data collected from the comparator peer group
discussed below and internal ranking within the executive officer group. General
targeted competitive levels for all elements of pay are the 50th percentile of
such comparator peer group when adjusted for size. There is opportunity for the
executive officers to earn more than the targeted 50th percentile if the
Company's performance exceeds the measures discussed in this report.
BASE ANNUAL SALARY. Base annual salaries for executive officers are determined
by the following factors: (1) parity to market; (2) the individual's
performance; (3) promotions resulting in increases in responsibility; and (4)
equity in relationship to other executive positions within the Company. With the
assistance of the Company's compensation consulting firm, surveys are conducted
of benchmark positions in 26 other peer companies (the "Peer Companies"), most
of which compete with the Company in one or more of its primary businesses.
Those which are not direct competitors are in closely-related fields. The
Compensation Committee takes into account both the size and performance of the
Company relative to the size and performance of the Peer Companies. It also
considers the competitiveness of the entire compensation package of the
Company's executive officers compared to the Peer Companies. The Compensation
Committee reviews
9
<PAGE>
which peer companies are selected for compensation analysis and updates the
composition of the Peer Companies periodically. For fiscal year 1995, the
Compensation Committee established salary ranges for executive officer positions
with midpoints which approximate the 50th percentile or median level of the
comparable, benchmarked positions. An individual executive officer's position
within a salary range depends upon her or his length of service in the position
and the executive officer's performance, as judged by her or his immediate
superior and the chief executive officer. The performance of the six executive
officers who serve as members of the management executive committee is judged by
the chief executive officer and the Compensation Committee, or in the chief
executive officer's case, by the Compensation Committee alone. Elements of
performance assessed for all executive officers include achieving financial
performance goals tied to their particular responsibilities in the Company and
individual objectives, some of which are not of a financial nature. All such
objectives are agreed to in advance by the executive officer and her or his
immediate superior, or in the chief executive officer's case, by him and the
Compensation Committee. An executive officer may also receive a promotional
salary increase to reflect increases in her or his job responsibility.
MANAGEMENT INCENTIVE COMPENSATION PLAN. The MIC Plan is an annual bonus plan in
which the top 290 managers of the Company participate. For fiscal year 1995, the
MIC Plan, as it applied to executive officers, established a linkage between the
annual bonus awards and both the Company's performance and the individual
performance of each executive officer. The Compensation Committee determined
that awards under the MIC Plan also would include an element of adverse
consequences for poor financial results, including no MIC Plan award funding for
the Company's financial performance component described below unless the Company
achieved an earnings before taxes target previously established by the
Compensation Committee. That earnings before taxes target was exceeded in fiscal
year 1995.
In keeping with the Company's desire to have executive officers build their
holdings of the Company's stock, in fiscal year 1995 executive officers
continued to be able to elect to receive all or a portion of their MIC Plan
award in the Company's stock rather than cash. Those participants electing stock
received a premium equal to 20% of the bonus amount elected to be paid in the
Company's stock based on the fair market value on September 1, 1995 and such MIC
Plan stock award is subject to transfer restrictions for two years, or the
premium will be forfeited.
For the MIC Plan, the Compensation Committee divided the executive officer group
into two subcategories. The six executive officers who serve as members of the
management executive committee are the five executive officers named in the
Summary Compensation Table on page 13, plus Mr. Edward A. Cutter, Senior Vice
President -- General Counsel and Secretary. For those six executive officers,
75% of the MIC Plan award was determined by achieving corporate financial
performance measures previously established by the Compensation Committee based
on a computation consisting of targeted operating margin level, asset turnover
rate and volume growth. In the computation, the targeted operating margin level
and asset turnover rate were weighted equivalently and counted approximately 75%
in the determination of the financial measures. Volume growth was weighted at
approximately 25%. The targeted corporate financial measures were exceeded as
measured at the end of fiscal year 1995. The remaining 25% of the MIC Plan award
was based on achieving pre-established individual objectives related to budget
performance and other goals that cannot be measured by traditional accounting
tools, including the development and execution of strategic plans, the
development of management and employees and the exercise of leadership within
the industry and in the communities that the Company serves. Individual
objectives and the weight given each individual objective varied for the members
of the management executive committee. The target MIC Plan award for the six
management executive committee members was 50% of base annual salary at June 30,
1995 (60% for the chief executive officer) if the corporate financial
performance and individual objectives were achieved. The maximum MIC Plan award
was 100% of base annual salary at June 30, 1995 (120% for the chief executive
officer) if the goals were substantially exceeded, and the minimum MIC Plan
award was 0 if the goals came in substantially lower than the targets. All MIC
Plan awards are determined by the chief executive officer and the Compensation
Committee or, in the chief executive officer's case, by the Compensation
Committee.
10
<PAGE>
The MIC Plan awards to other members of the executive officer group were
determined based on an equally divided weighing of (i) the same corporate
financial performance measures used for the six management executive committee
members; and (ii) achieving individual objectives, including, for operating
division officers, operating division financial performance measures and other
individual objectives, and for staff executive officers, individual objectives,
such as the achievement of selected strategic goals and the successful
development of human resources. Individual objectives and the weight given each
individual objective varied from person to person depending on job
responsibilities. The target MIC Plan award for the other members of the
executive officer group was 40% of base annual salary at June 30, 1995 if goals
were achieved up to a maximum of 80% if the goals were substantially exceeded
and down to a minimum of 0 if the goals came in substantially lower than the
targets.
LONG-TERM COMPENSATION PROGRAM. For the past several years, a major goal of the
Compensation Committee has been to increase the level of ownership of the
Company's stock by the executive officer group. In the previous fiscal year,
1994, the Compensation Committee provided significantly larger grants of stock
options and restricted stock to all executive officers than it had in prior
years. Because of the sizes of the fiscal year 1994 grants, the only grants of
stock options or restricted stock to executive officers made during fiscal year
1995 were to recognize promotions or a significant increase in the recipient's
responsibilities. No member of the management executive committee received any
such grants except for shares of restricted stock awarded to members who elected
to receive some or all of their fiscal year 1995 MIC Plan award in stock rather
than cash.
The stock options awarded to executive officers during fiscal year 1994 had
ten-year lives, and 1/3 of the number of option shares vest on each of the
first, second and third anniversaries of the option grant. Option shares which
vested on the first anniversary of the grant have an exercise price of $52.94,
the fair market value on the option grant date. Option shares vesting on the
second and third anniversaries of the grant have exercise prices of $58.25 and
$63.50, premiums of 10% and 20%, respectively, over the $52.94 fair market value
on the option grant date.
The timing of the lapse of restrictions on performance shares awarded during
fiscal year 1994 will be determined at the end of fiscal year 1996, 1998 or 2000
and will be based on Company performance. The relative total stockholder return
(stock price appreciation plus dividends paid) of the Common Stock will at that
time be measured against two comparator groups: first, the total stockholder
return of the Standard & Poor's 500 Stock Index and second, the total
stockholder return of an index of the stocks of the Peer Companies. Each
comparator group will have an equal 50% weight. If, on average, the Company's
total stockholder return is in the 60th percentile or above relative to the
stockholder returns of the two groups, the restrictions on the performance
shares will lapse on the third anniversary of the grant date. If the
restrictions do not lapse on the third anniversary (1996) and the Company's
total stockholder return is above the 50th percentile in 1998, the shares will
vest in 1998. Failing that, the shares will not vest until 2000.
The Compensation Committee has endorsed target ownership levels by executive
officers to be achieved by fiscal year 1999, based on the fair market value of
the Common Stock at that time. The levels are the equivalent of four times base
annual salary for the chief executive officer, three times base annual salary
for the other executive officers who serve as members of the management
executive committee, and two times base annual salary for other executive
officers. No stock options will be counted in determining ownership levels,
which will be based on shares of Common Stock held, including restricted stock
and shares held via the Company's Tax Reduction Investment Plan.
BENEFITS. The Company provides various employee benefit programs to its
executive officers, including medical and life insurance benefits, retirement
benefits, an employee stock purchase plan and an employee savings plan with
401(k) features. Except for the Supplemental Executive Retirement Plan described
on page 16 and individual financial planning services, these benefit programs
are generally available to all employees of the Company.
11
<PAGE>
CHIEF EXECUTIVE OFFICER COMPENSATION.
The Compensation Committee increased Mr. Sullivan's base annual salary on
October 1, 1994 from $585,000 to $625,000. Commencing in fiscal year 1995, the
Compensation Committee moved its annual review of the salaries of the chief
executive officer and the other five members of the management executive
committee to its September meeting with increases to be effective for all six
officers on October 1st of each year. Because of the short time period since Mr.
Sullivan's previous increase, internal equity as well as external comparisons
with the Peer Companies were given a greater weight than they had been given in
determining Mr. Sullivan's previous increases.
Mr. Sullivan's MIC Plan award for fiscal year 1995 was based upon the weighted
corporate financial performance measures (75%) and individual objectives (25%)
established by the Compensation Committee as described above. The targets were
exceeded, and Mr. Sullivan's MIC Plan award formula called for a payment of
$541,900.
Mr. Sullivan received no stock option awards or grants of restricted stock in
fiscal year 1995 because of the size of the awards and grants he received during
fiscal year 1994.
ON-GOING REVIEW OF COMPENSATION.
The Company's compensation consulting firm has been conducting an ongoing review
of the Company's existing executive compensation programs for the Compensation
Committee to continue to ensure they support the future direction of the Company
and the principles on which executive compensation is based. The Compensation
Committee reserves the right to select and/or meet independently with any
consultant at its discretion. The Compensation Committee has access to and
reviews independent compensation data relating to executive compensation at
other companies.
The Compensation Committee has not yet developed a policy in order to qualify
any compensation to the five highest-paid executive officers in excess of $1
million per year for federal tax deductibility pursuant to Section 162(m) of the
Internal Revenue Code of 1986, as amended. The Compensation Committee is
considering the applicability of Section 162(m) to various types of executive
compensation. The Compensation Committee intends to balance the interests of the
Company in maintaining flexible incentive plans and how the Company benefits
from the compensation package paid to any executive officer against the possible
loss of a tax deduction when taxable compensation for any of the five
highest-paid executive officers exceeds $1 million per year.
Dean O. Morton, Chair Lary R. Scott
Ursula Fairchild Forrest N. Shumway
Juergen Manchot James A. Vohs
(Members of the Compensation Committee)
12
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation for each of the last three
fiscal years earned by or paid or awarded to the chief executive officer of the
Company and the four other most highly compensated executive officers of the
Company (the "Named Officers").
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
------------------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
-------------------------------- ------------------------- --------
(A) (B) (C) (D) (E) (F) (G) (H) (I)
SECURITIES
RESTRICTED UNDERLYING ALL
OTHER ANNUAL STOCK OPTIONS/ LTIP OTHER
SALARY BONUS COMPENSATION AWARD(S) SARS PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR ($) ($)(1) ($)(2) ($)(1)(3)(4) (#)(3)(4) ($) ($)(2)(5)
- ------------------------------ ------- -------- -------- ------------ ------------ ---------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
G. Craig Sullivan ............ 1995 $615,000 $541,900 -- $ 93,466 -- $206,600 $15,812
Chairman of the Board and 1994 $551,250 $422,956 -- $1,061,343 114,963 $136,197 $25,993
Chief Executive Officer 1993 $457,500 $351,000 -- $ 125,563 18,516 $ 85,995 $17,885
Neil P. DeFeo ................ 1995(6) $368,750 $282,700 $19,676 $ 56,592 -- -- $27,207
Group Vice President -- U.S. 1994(6) $343,494 $175,000 $20,321 $ 619,485 60,339 -- $19,042
Operations 1993(6) -- -- -- -- -- -- --
William F. Ausfahl ........... 1995 $302,500 $222,300 -- $ 44,501 -- $ 87,971 $15,899
Group Vice President and 1994 $292,500 $174,050 -- $ 334,807 34,005 $131,289 $26,161
Chief Financial Officer 1993 $281,250 $154,375 -- $ 56,700 8,643 $ 81,081 $16,899
Peter N. Louras .............. 1995 $267,500 $201,600 -- $ 30,348 -- $ 68,422 $15,853
Group Vice President 1994 $251,250 $153,400 -- $ 330,457 37,782 $ 77,301 $26,107
1993 $219,000 $121,875 -- $ 39,681 6,051 $ 48,321 $18,073
Ramon A. Llenado ............. 1995 $259,500 $189,800 -- $ 37,995 -- $ 78,197 $15,843
Group Vice President -- 1994(7) $252,000 $154,665 -- $ 330,930 34,005 -- $26,108
Technical 1993(7) $240,000 $130,000 -- $ 50,400 7,683 -- $14,412
<FN>
- ------------
(1) Pursuant to the MIC Plan, starting with fiscal year 1994 awards, executive
officers were able to elect all or a portion of their annual bonus plan
awards in Common Stock rather than cash. Those participants electing stock
receive a premium equal to 20% of the gross bonus amount elected to be paid
in Common Stock based on the fair market value on September 1. Such stock
awards are subject to transfer restrictions for two years from the date of
grant or the premium will be forfeited. The amount of the bonus elected to
be paid in Common Stock is included in the bonus column (d) in the annual
compensation portion of this table. The 20% premium received with such
election, which is subject to forfeiture restrictions, is included in the
restricted stock awards column (f) in the long-term compensation portion of
this table. The net number of shares and value of the MIC Plan annual bonus
amounts paid in Common Stock awards, after deductions to the base awards
made for income tax purposes, were as follows: for fiscal year 1995, base
award -- 4,052 shares ($275,050) and premium -- 1,377 shares ($93,466) for
Mr. Sullivan; base award -- 2,691 shares ($182,651) and premium -- 834
shares ($56,592) for Mr. DeFeo; base award -- 2,116 shares ($143,627) and
premium -- 656 shares ($44,501) for Mr. Ausfahl; base award -- 1,182 shares
($80,207) and premium -- 447 shares ($30,348) for Mr. Louras; and base
award -- 1,807 shares ($122,629) and premium -- 560 shares ($37,995) for
Mr. Llenado; and for fiscal year 1994, base award -- 3,790 shares
($198,035) and premium -- 1,174 shares ($61,353) for Mr. Sullivan; base
award -- 2,075 shares ($108,424) and premium -- 670 shares ($35,000) for
Mr. DeFeo; base award -- 2,151 shares ($112,395) and premium -- 666 shares
($34,810) for Mr. Ausfahl; base award -- 1,000 shares ($52,250) and premium
-- 200 shares ($10,450) for Mr. Louras; and base award -- 1,911 shares
($99,855) and premium -- 592 shares ($30,933) for Mr. Llenado.
(2) In connection with joining the Company during fiscal year 1994, Mr. DeFeo
was reimbursed for his relocation costs by the Company in accordance with
the Company's general relocation policy for experienced new hires. The
amounts the Company paid Mr. DeFeo in excess of such relocation policy are
set forth in the table above as follows: (i) the amounts of $19,676 and
$20,321 in the other annual compensation column (e) represent the excess
tax gross-up paid to Mr. DeFeo in connection with his relocation in fiscal
year 1995 and 1994, respectively; and (ii) $10,720 and $18,580 of the
amounts listed in the all other compensation column (i) in fiscal year 1995
and 1994, respectively, represent other excess relocation cost
reimbursement received by Mr. DeFeo.
(3) Amounts include awards earned for the years indicated, consistent with past
practice. In support of the goal of increasing the level of ownership of
the Company's stock by the executive officer group, in fiscal year 1994
significantly larger grants of stock options and restricted stock were made
to all executive officers than in prior years. Because of the sizes of the
fiscal year 1994 grants, no Named Officer received any grants of stock
options or restricted stock during fiscal year 1995 except for shares of
restricted stock awarded to Named Officers who elected to receive some or
all of their respective fiscal year 1995 MIC Plan awards in stock rather
than cash. Except for 4,000 shares of restricted stock granted to Mr. DeFeo
in connection with his joining the Company (which vest 25% on each of the
first four anniversaries of the grant date), the vesting of restricted
stock awards granted in fiscal year 1994 will be determined by Company
performance. The vesting dates will be October 1, 1996, October 1, 1998 or
October 1, 2000, depending on when the relative total stockholder return
requirements set forth in the Compensation Committee Report on page 11
above are met. The restricted stock awards granted in fiscal year 1993 will
vest 50% in each of the fourth and fifth years following the grants. The
value of all restricted stock awards set forth in the table above was
determined by multiplying the fair market value of the Common Stock on the
date of grant by the number of shares awarded. As of June 30, 1995, the
number and value of aggregate restricted stock award holdings, based on
fair market value on June 30, 1995, were as follows: 26,724.37 shares
($1,743,765.14) for
</TABLE>
13
<PAGE>
<TABLE>
<S> <C>
Mr. Sullivan; 12,922.95 shares ($843,223) for Mr. DeFeo; 9,780.32 shares
($638,165.88) for Mr. Ausfahl; 8,152 shares ($531,918) for Mr. Louras; and
9,322.12 shares ($608,268.33) for Mr. Llenado. Dividends are paid on shares
of restricted stock awarded commencing from the date of grant.
(4) In the event of a "change in control," all periods of restriction on
restricted stock end and all stock options become exercisable. A change in
control will be deemed to occur if any person or entity other than Henkel
KGaA becomes the beneficial owner, directly or indirectly, of securities of
the Company then representing 50% or more of the combined voting power for
the election of the Company's directors. A feature of both the Restricted
Stock Plan and the 1987 and 1977 Stock Option Plans is the stock
withholding election, pursuant to which a recipient may elect to have the
Company withhold shares of Common Stock to pay any withholding tax
liability that arises when the restrictions on the restricted stock are
released or when non-qualified stock options are exercised, respectively.
In both cases, the value of shares which may be withheld is based on the
per share price of the Common Stock on the Composite Transactions Report
for the New York Stock Exchange on the last business day before the
withholding is made.
(5) Except for $10,720 and $18,580 related to Mr. DeFeo's relocation in fiscal
year 1995 and 1994, respectively, the amounts shown in the column are
pursuant to programs provided to salaried employees generally and represent
Company contributions under the Company's Tax Reduction Investment Plan and
Profit Sharing Trust Plan and term life insurance premiums paid by the
Company for the benefit of each respective Named Officer. The amounts for
1995 are based on estimated contributions to the Profit Sharing Trust Plan,
while the numbers for 1994 and 1993 are based on actual contributions.
(6) Mr. DeFeo was first employed in July 1993. In addition to the 1994 fiscal
year grants of restricted stock and stock options made to all the Named
Officers, Mr. DeFeo received initial grants of restricted stock (4,000
shares) and stock options (15,000 shares) in August 1993. As part of his
employment with the Company, Mr. DeFeo received a pre-determined annual
bonus of $175,000 for fiscal year 1994 only, which was the target bonus
goal established for him.
(7) Mr. Llenado was first employed during the 1992 fiscal year. His first
Long-Term Incentive Plan payout occurred for the first three years ending
June 30, 1995.
</TABLE>
OPTIONS AND STOCK APPRECIATION RIGHTS
The following table shows options and stock appreciation rights ("SARs")
exercised during fiscal year 1995 by the Named Officers, and the value of the
options and SARs held by the Named Officers at the end of fiscal year 1995.
AGGREGATED OPTIONS/SAR EXERCISES IN LAST FISCAL YEAR,
AND FY-END OPTIONS/SAR VALUES
<TABLE>
<CAPTION>
(A) (B) (C) (D) (E)
VALUE OF
UNEXERCISED IN-THE-
NUMBER OF SECURITIES MONEY OPTIONS/ SARS
UNDERLYING UNEXERCISED AT FY-END($)
SHARES ACQUIRED VALUE OPTIONS/SARS AT FY-END (#) EXERCISABLE/
NAME ON EXERCISE(#) REALIZED($) EXERCISABLE/ UNEXERCISABLE(2) UNEXERCISABLE(1)(2)
- --------------------- ------------------ ----------- ----------------------------- -------------------
<S> <C> <C> <C> <C>
G. Craig Sullivan.... 3,576 $ 114,991 78,850/82,814 $1,619,383/$468,007
Neil P. DeFeo........ -0- -0- 20,113/40,226 $256,704/$273,489
William F. Ausfahl... 8,100 $ 310,369 55,630/25,551 $1,554,198/$161,123
Peter N. Louras...... 500 $ 19,438 33,954/27,205 $835,136/$153,563
Ramon A. Llenado..... -0- -0- 16,457/25,231 $249,685/$154,243
<FN>
- ------------
(1) The value of the unexercised options was determined by multiplying the
number of shares subject to unexercised options on the fiscal year end,
June 30, 1995, by $65.25, the fair market value of the Common Stock on such
date, minus the exercise price of each unexercised option.
(2) None of the unexercisable options were granted under the 1977 Stock Option
Plan. The number of shares covered and the value of the unexercisable
options listed in columns (d) and (e) of the table above were all granted
under the 1987 Stock Option Plan.
</TABLE>
14
<PAGE>
COMPARATIVE STOCK PERFORMANCE
The graph below compares the cumulative total stockholder return on the Common
Stock for the last five fiscal years with the cumulative total return of the
Standard & Poor's 500 Stock Index and a composite index composed of the Standard
& Poor's Household Products Index and the Standard & Poor's Housewares Index for
a five-year period ending June 30, 1995. The composite index is weighted based
on market capitalization as of the end of each quarter during each of the last
five years.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
THE CLOROX COMPANY COMBINED INDUSTRY INDEX S&P 500
<S> <C> <C> <C>
June 1990 100.00 100.00 100.00
June 1991 96.88 96.57 107.39
June 1992 116.14 123.15 121.73
June 1993 138.22 135.90 138.26
June 1994 134.19 139.90 140.24
June 1995 185.08 190.94 176.69
</TABLE>
PENSION PLAN
The Company's Pension Plan is a qualified non-contributory plan under pertinent
income tax laws and essentially all salaried employees as well as non-union
hourly employees with at least one year of service participate. The Company
contributes annually an amount determined actuarially on the entry age normal
cost method. A participant obtains 100% vesting of her or his interests under
the Pension Plan after 5 years of service. Benefits are based on average salary
and years of service of each participant. No deduction is made for Social
Security benefits. Pension benefits for married retirees will be on a 50% joint
and survivor annuity basis unless the retiree elects otherwise. For an unmarried
retiree the benefit is on a straight life
15
<PAGE>
annuity basis. The table below shows the estimated pensions payable to an
unmarried person on retirement under the Pension Plan at age 65 or later for
representative years of service at various levels of average covered annual
salary.
<TABLE>
<CAPTION>
YEARS OF SERVICE
AVERAGE COVERED ----------------------------------------------------------
ANNUAL SALARY(1)(2) 15 20 25 30 35
- ----------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$ 125,000.................... $ 28,125 $ 37,500 $ 46,875 $ 56,250 $ 65,625
$ 150,000.................... $ 33,750 $ 45,000 $ 56,250 $ 67,500 $ 78,750
$ 175,000.................... $ 39,000 $ 52,125 $ 65,250 $ 78,375 $ 91,500
$ 200,000.................... $ 44,250 $ 59,250 $ 74,250 $ 89,250 $ 104,250
$ 250,000.................... $ 52,442 $ 71,192 $ 89,942 $ 108,692 $ 118,800
$ 300,000.................... $ 59,192 $ 81,692 $ 104,192 $ 118,800 $ 118,800
$ 350,000.................... $ 65,942 $ 92,192 $ 118,442 $ 118,800 $ 118,800
$ 400,000.................... $ 72,692 $ 102,692 $ 118,800 $ 118,800 $ 118,800
$ 450,000.................... $ 79,442 $ 113,192 $ 118,800 $ 118,800 $ 118,800
$ 500,000.................... $ 86,192 $ 118,800 $ 118,800 $ 118,800 $ 118,800
$ 600,000.................... $ 99,692 $ 118,800 $ 118,800 $ 118,800 $ 118,800
$ 700,000.................... $ 113,192 $ 118,800 $ 118,800 $ 118,800 $ 118,800
$ 800,000.................... $ 118,800 $ 118,800 $ 118,800 $ 118,800 $ 118,800
$ 900,000.................... $ 118,800 $ 118,800 $ 118,800 $ 118,800 $ 118,800
$1,000,000................... $ 118,800 $ 118,800 $ 118,800 $ 118,800 $ 118,800
<FN>
- ---------
(1) The number of years of credited service for each of the Named Officers are:
Mr. Sullivan, 24; Mr. DeFeo, 2; Mr. Ausfahl, 13; Mr. Louras, 15; and Mr.
Llenado, 3.
(2) For the executive officers, the foregoing pensions will likely be
supplemented as described and illustrated below in the section entitled
"Supplemental Executive Retirement Plan."
</TABLE>
SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
The retirement benefits shown in the table below are based on the Company's
Supplemental Executive Retirement Plan ("SERP"). The SERP is designed to
supplement in certain instances the combined retirement income of executive
officers. The benefits payable under the SERP assure the achievement of a fixed
objective for the combined benefit amounts payable under the Company's qualified
plans (Profit Sharing, Pension and the Company's matching contributions to the
Tax Reduction Investment Plan) and primary Social Security. The fixed objective
is shown in the table below and is 55% of the average annual compensation for
the three consecutive years of highest compensation. Compensation consists of
base annual salary and the MIC Plan bonus. For the Named Officers, those amounts
are shown in the salary and bonus columns (a) and (b) of the Summary
Compensation Table on page 13. The actual amount paid from the SERP is the
difference, if any, between the fixed objective and the benefits received from
primary Social Security and the Company's qualified plans. The benefits shown in
the table below are calculated for an
16
<PAGE>
unmarried person and are based on retirement at age 65 with at least 15 years of
service with the Company. They would be proportionately reduced for early
retirement or for shorter periods of service to a minimum of 10 years.
<TABLE>
<CAPTION>
YEARS OF SERVICE
----------------------------------------------------------
COMPENSATION(1) 15 20 25 30 35
- ----------------------------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
$ 125,000.................... $ 68,750 $ 68,750 $ 68,750 $ 68,750 $ 68,750
$ 150,000.................... $ 82,500 $ 82,500 $ 82,500 $ 82,500 $ 82,500
$ 175,000.................... $ 96,250 $ 96,250 $ 96,250 $ 96,250 $ 96,250
$ 200,000.................... $ 110,000 $ 110,000 $ 110,000 $ 110,000 $ 110,000
$ 250,000.................... $ 137,500 $ 137,500 $ 137,500 $ 137,500 $ 137,500
$ 300,000.................... $ 165,000 $ 165,000 $ 165,000 $ 165,000 $ 165,000
$ 350,000.................... $ 192,500 $ 192,500 $ 192,500 $ 192,500 $ 192,500
$ 400,000.................... $ 220,000 $ 220,000 $ 220,000 $ 220,000 $ 220,000
$ 450,000.................... $ 247,500 $ 247,500 $ 247,500 $ 247,500 $ 247,500
$ 500,000.................... $ 275,000 $ 275,000 $ 275,000 $ 275,000 $ 275,000
$ 600,000.................... $ 330,000 $ 330,000 $ 330,000 $ 330,000 $ 330,000
$ 700,000.................... $ 385,000 $ 385,000 $ 385,000 $ 385,000 $ 385,000
$ 800,000.................... $ 440,000 $ 440,000 $ 440,000 $ 440,000 $ 440,000
$ 900,000.................... $ 495,000 $ 495,000 $ 495,000 $ 495,000 $ 495,000
$1,000,000................... $ 550,000 $ 550,000 $ 550,000 $ 550,000 $ 550,000
<FN>
- ---------
(1) The number of years of credited service for each of the Named Officers are
as follows: Mr. Sullivan, 24; Mr. DeFeo, 2; Mr. Ausfahl, 13; Mr. Louras,
15; and Mr. Llenado, 3.
</TABLE>
EMPLOYMENT CONTRACTS
The Company has entered into employment contracts with each of the Named
Officers named in the Summary Compensation Table on page 13 above. The term of
the employment contract for Mr. Sullivan is five years and for each of the other
Named Officers is three years. Such contract terms are "evergreen" in that they
maintain a five-year term, in the case of the chief executive officer, or a
three-year term, in the case of the other Named Officers, unless either party
gives five-year notice of termination, in the case of the chief executive
officer's employment contract, and three-year notice of termination, in the case
of the other Named Officers' employment contracts. The employment contracts are
also terminable at any time by the Company either for "cause," as that term is
defined in them, or "at will" by either the Named Officer or the Company. In the
case of an "at will" termination by the Company, a Named Officer is entitled to
receive annually severance benefits of his then current base salary, plus 75% of
his target MIC Plan award for the previous fiscal year, for the length of the
remaining term of his employment contract, subject to offset for other earned
income. He is also entitled to continue to participate in the Company's medical
and dental insurance programs for the same period. In addition, the Named
Officer would receive a pro-rated MIC Plan award for the year in which
termination occurs. Following a "change in control" (as described in footnote
(4) to the Summary Compensation Table on page 14), the Named Officer may, within
the remaining term period of his contract, terminate his employment in the event
of a reduction or elimination in rank, responsibilities, compensation or
benefits, and receive similar severance benefits to those set forth above.
Assuming a termination on July 1, 1995, the Named Officers would have received
the following annual payments for the periods indicated, subject to reduction by
the amount of any earned income from another source: Mr. Sullivan -- $906,250
per year for 5 years; Mr. DeFeo -- $515,625 per year for 3 years; Mr. Ausfahl --
$419,375 per year for 3 years; Mr. Louras -- $371,250 per year for 3 years; and
Mr. Llenado -- $360,250 per year for 3 years. The Company has also entered into
employment contracts on similar terms with each of the other executive officers
of the Company. The termination notice periods for these contracts range from
three years to one year depending upon the executive officer's level in the
organization and her or his tenure as an executive officer.
17
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934 and Securities and Exchange
Commission regulations require the Company's directors, certain officers and
greater than ten percent stockholders to file reports of ownership on Form 3 and
changes in ownership on Forms 4 or 5 with the Securities and Exchange
Commission. The Company undertakes to file such forms on behalf of the reporting
person pursuant to a power of attorney given to certain attorneys-in-fact. Such
reporting officers, directors and ten percent stockholders are also required by
Securities and Exchange Commission rules to furnish the Company with copies of
all Section 16(a) reports they file.
Based solely on its review of copies of such reports received or written
representations from such executive officers, directors and ten percent
stockholders, the Company believes that all Section 16(a) filing requirements
applicable to its directors, executive officers and ten percent stockholders
were complied with during fiscal year 1995, except the following officers
inadvertently omitted reporting the following transactions: Ms. Janet Brady --
two transactions relating to stock options which occurred between October 1994
and February 1995, which were disclosed in a Form 4 filing in September 1995;
Mr. Richard T. Conti -- two sale transactions in connection with the release of
restricted stock which occurred in September 1992 and March 1993, which were
disclosed in a Form 4 filing in September 1995; Mr. Robert C. Klaus -- a sale
transaction which occurred in March 1992, which was disclosed in a Form 4 filing
in December 1994; Mr. Ramon A. Llenado -- a purchase transaction which occurred
in September 1991, which was disclosed in a Form 4 filing in September 1995; and
Mr. Frank Tataseo -- a restricted stock grant which occurred in September 1994,
which was disclosed in an amended Form 3 filing in March 1995. Mr. Donald C.
Murray filed a Form 4 in September 1995 to correctly indicate the number of
shares held by him at the end of fiscal year 1995. Mr. Lary R. Scott filed a
Form 5 in September 1995 to disclose dividend reinvestment acquisitions over the
past two years.
RATIFICATION OF INDEPENDENT AUDITORS
The Audit Committee of the board of directors has recommended, and the board of
directors has selected, Deloitte & Touche LLP as independent auditors for the
fiscal year ending June 30, 1996. This firm has been so engaged since 1957.
During fiscal year 1995, Deloitte & Touche LLP examined the Company's
consolidated financial statements, made limited reviews of the interim financial
reports, reviewed filings with the Securities and Exchange Commission and
provided general advice regarding related accounting matters.
Ratification of the selection of Deloitte & Touche LLP by stockholders is not
required by law. However, as a matter of policy, such selection is being
submitted to the stockholders for ratification at the Annual Meeting (and it is
the present intention of the board of directors to continue this policy). The
board of directors recommends the adoption of the following resolution which
will be presented to the Annual Meeting:
RESOLVED, that the stockholders of The Clorox Company hereby ratify the
selection of Deloitte & Touche LLP as independent auditors for the fiscal
year ending June 30, 1996.
The persons designated in the enclosed proxy will vote your shares FOR
ratification unless instructions to the contrary are indicated in the enclosed
proxy. If the stockholders fail to ratify the selection of this firm, the board
of directors will reconsider the matter.
Representatives of Deloitte & Touche LLP are expected to be present at the
Annual Meeting, to respond to appropriate questions and to make a statement
should they desire to do so.
OTHER BUSINESS
The board of directors is not aware of any other matters to come before the
Annual Meeting. If any matter not mentioned herein is properly brought before
the Annual Meeting, the persons named in the enclosed proxy will have
discretionary authority to vote all proxies with respect thereto in accordance
with their judgment.
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SOLICITATION OF PROXIES
The Company has not retained an outside firm in connection with the solicitation
of the enclosed proxy. However, executive officers, directors and regular
employees of the Company, who will receive no extra compensation for their
services, may solicit proxies by telephone, telegraph or personal call.
STOCKHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
Stockholders who may wish to present proposals for inclusion in the Company's
proxy material and for consideration at the 1996 annual meeting must submit such
proposals in writing to the Secretary at the address shown on the top of the
notice accompanying this proxy statement not later than May 31, 1996.
By Order of the Board of Directors
Edward A. Cutter,
SENIOR VICE PRESIDENT -- GENERAL
COUNSEL
AND SECRETARY
September 28, 1995
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[Recycled Symbol]
Printed on Recycled Paper
<PAGE>
PROXY
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE CLOROX
COMPANY
The undersigned, whose signature appears on the reverse, hereby appoints G. C.
SULLIVAN, W. F. AUSFAHL and E. A. CUTTER, and each of them, with full power of
substitution and revocation, the proxy or proxies of the undersigned to vote the
shares of common stock which the undersigned would be entitled to vote if
personally present at the Annual Meeting of Stockholders to be held on November
15, 1995, and at any and all adjournments thereof and on all matters that may
properly come before the meeting.
Your shares will be voted as directed herein. If signed and no direction is
given for any item, it will be voted in favor of Items 1 and 2.
If you have any comments or change of address, MARK THE APPROPRIATE BOX ON THE
REVERSE SIDE and use the following space:
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INSTRUCTIONS:
1. Use the reverse side to specify your voting instructions for each proposal.
2. Sign and date form.
3. Tear off at perforation and RETURN THIS PORTION OF THE FORM ONLY.
YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU OWN. BY RETURNING
YOUR VOTING INSTRUCTIONS PROMPTLY, YOU CAN AVOID THE INCONVENIENCE OF RECEIVING
FOLLOW-UP MAILINGS PLUS HELP AVOID THE EXPENSES ASSOCIATED WITH SUCH ADDITIONAL
MAILINGS.
<PAGE>
/ x / PLEASE MARK CHOICES IN BLUE OR BLACK INK AS IN THIS SAMPLE. 0129
The Board of Directors unanimously recommends a vote FOR the election of the
nominees for director and FOR proposal 2.
1. Election of Directors.
(see list below)
FOR, EXCEPT VOTE WITHHELD FROM THE FOLLOWING NOMINEE(S):
FOR / / WITHHELD / /
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Withheld authority for all Nominees
2. Proposal to ratify the selection of Deloitte & Touche LLP as independent
auditors for The Clorox Company for the fiscal year ending June 30, 1996.
For Against Abstain
/ / / / / /
Check this box only if you have comments or change of address and use the back
of form.
/ /
Check this box only if you wish to attend and vote at the meeting.
Signature(s)
/ /
SIGNATURE(S) DATE
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Note: Your signature should conform with your name as printed above. If signing
as attorney, executor, administrator, trustee or guardian, please give your full
title as such. If stock is owned by a partnership or corporation, please
indicate your capacity in signing the proxy. If stock is held in joint
ownership, all co-owners must sign. Please sign, date and return promptly.
PLEASE TEAR OFF AT PERFORATION AND RETURN SIGNED PORTION AS SOON AS POSSIBLE.
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THE CLOROX COMPANY
ANNUAL MEETING NOVEMBER 15, 1995
Nominees for Director:
William F. Ausfahl, Daniel Boggan, Jr., John W. Collins, Ursula Fairchild,
Juergen Manchot, Dean O. Morton, Klaus Morwind, Edward L. Scarff, Lary R. Scott,
Forrest N. Shumway, G. Craig Sullivan, James A. Vohs, C.A. (Al) Wolfe
**********IMPORTANT**********
DETACH AT PERFORATION AND RETAIN THIS PORTION.
THE PROXY VOTING INSTRUCTIONS SHOULD BE
RETURNED AS SOON AS POSSIBLE
