As filed with the Securities and Exchange Commission
on July 12, 1996.
Registration No. 33-41131
- --------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
AMENDMENT NO. 2
TO
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
THE CLOROX COMPANY
(Exact Name of Registrant as Specified in Its Charter)
Delaware 31-0595760
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
1221 Broadway, Oakland, CA 94612-1888
(Address of Principal Executive Offices) (Zip Code)
THE CLOROX COMPANY
VALUE SHARING PLAN
(formerly The Clorox Company
Tax Reduction Investment Plan)
(Full Title of the Plan)
Edward A. Cutter
Senior Vice President, General Counsel and Secretary
The Clorox Company
1221 Broadway
Oakland, CA 94612-1888
(Name and Address of Agent For Service)
510-271-7000
(Telephone Number, Including Area Code,
of Agent For Service)
- --------------------------------------------------------------
<PAGE>
EXPLANATORY NOTE
This Amendment No. 2 to the Registration Statement (No. 33-41131)
is being filed soley for the purpose of filing Exhibits 4.3 and
23.1 to the Registration Statement.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe
that it meets all of the requirements for filing on Form S-8
and has duly caused this Registration Statement to be signed
on its behalf by the undersigned, thereunto duly authorized,
in the City of Oakland, State of California, on July 11, 1996.
THE CLOROX COMPANY
By: /s/G.C. Sullivan
----------------
G.C. Sullivan
Chairman of the Board,
Chief Executive
Officer and President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement has been signed by the following
persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- ----------------------------------------------------------------------------------------
<S> <C> <C>
/s/ G.C. Sullivan Chairman of the Board, July 11 , 1996
G. C. Sullivan Chief Executive Officer
and President
/s/ W.F. Ausfahl Group Vice President and July 11 , 1996
W. F. Ausfahl Director
(Principal Financial Officer)
/s/ D. Boggan Jr.* Director July 11 , 1996
D. Boggan, Jr.
Director July 11 , 1996
J. W. Collins
II-1
<PAGE>
/s/ U. Fairchild* Director July 11, 1996
U. Fairchild
Director July 11, 1996
J. Krautter
Director July 11, 1996
J. Manchot
Director July 11, 1996
D. O. Morton
/s/ E.L. Scarff* Director July 11, 1996
E. L. Scarff
/s/ L.R. Scott* Director July 11, 1996
L. R. Scott
/s/ F.N. Shumway* Director July 11, 1996
F. N. Shumway
Director July 11, 1996
J. A. Vohs
Director July 11, 1996
C. A. Wolfe
II-2
<PAGE>
/s/ H.J. Salvo, Jr. Vice President-Controller July 11, 1996
(Principal Accounting Officer)
*By: /s/Edward Cutter July 11, 1996
Edward Cutter
Attorney-in-Fact
</TABLE>
Exhibit 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Amendment No. 2
to The Clorox Company Registration Statement on Form S-8
(No. 33-41131) of our report dated August 9, 1995, incorporated
by reference in the Company's Annual Report on Form 10-K for
the year ended June 30, 1995.
/s/ Deloitte & Touche LLP
July 11, 1996
II-4
THE CLOROX COMPANY
VALUE SHARING PLAN
Amended and Restated effective June 30, 1996
THE CLOROX COMPANY
VALUE SHARING PLAN
TABLE OF CONTENTS
Page
ARTICLE I HISTORY 1
ARTICLE II DEFINITIONS 1
ARTICLE III SERVICE 7
ARTICLE IV PARTICIPATION 8
ARTICLE V CONTRIBUTIONS 8
ARTICLE VI INVESTMENT FUNDS AND COMMON STOCK 13
ARTICLE VII VALUATION 14
ARTICLE VIII VESTING 14
ARTICLE IX IN-SERVICE WITHDRAWALS 16
ARTICLE X LOANS 17
ARTICLE XI DISTRIBUTION OF BENEFITS 19
ARTICLE XII BENEFICIARY DESIGNATIONS 23
ARTICLE XIII CLAIMS PROCEDURE 25
ARTICLE XIV ALIENATION AND QUALIFIED DOMESTIC
RELATIONS ORDERS 25
ARTICLE XV ADMINISTRATION 25
ARTICLE XVI AMENDMENTS 26
ARTICLE XVII TERMINATION, MERGER AND TRANSFER 27
ARTICLE XVIII MISCELLANEOUS 27
APPENDIX I: HIGHLY COMPENSATED EMPLOYEE 30
APPENDIX II: TESTING 401(K) AND MATCHING
CONTRIBUTIONS 32
APPENDIX III: LIMITATIONS ON ALLOCATIONS 36
APPENDIX IV: TOP HEAVY PROVISIONS 39
APPENDIX V: DISTRIBUTION PROVISIONS 42
APPENDIX VI: ADDITIONAL RULES FOR PUERTO
RICAN PARTICIPANTS 45
THE CLOROX COMPANY
VALUE SHARING PLAN
ARTICLE I
HISTORY
In June of 1996, The Clorox Company maintained The Clorox
Company Profit Sharing Plan ("Profit Sharing Plan") and The
Clorox Company Tax Reduction Investment Plan ("TRIP"). The
Profit Sharing Plan was originally adopted effective as of
July 1, 1955 and TRIP was originally adopted effective as of
October 1, 1983. This document constitutes a complete amendment
and restatement of the Profit Sharing Plan. The principal
purposes of this amendment and restatement are to merge TRIP
into the Profit Sharing Plan, to change the name of the Profit
Sharing Plan to The Clorox Company Value Sharing Plan ("Plan"),
to make certain administrative changes to the eligibility,
contribution, and benefit provisions of the Plan, and to
terminate the Payroll-Based Stock Ownership ("PAYSOP") plans
and provisions contained in the TRIP document on the date that
TRIP was merged into this Plan.
Effective as of 11:59 PM on June 30, 1996, all TRIP assets and
liabilities are merged into this Plan and, together with the
assets of this Plan, constitute a single plan within the
meaning of Code Section 414(l). The rights and benefits of a
TRIP participant who ceased to be an Employee on or prior to
June 30, 1996 will be determined in accordance with the
provisions of TRIP in effect on the date on which that
participant ceased to be an Employee, and in accordance
with any provisions of this Plan that are specifically made
effective to that date.
Similarly, the rights and benefits of a Profit Sharing Plan
participant who ceased to be an Employee on or prior to
June 30, 1996 will be determined in accordance with the
provisions of the Profit Sharing Plan in effect on the date
on which that participant ceased to be an Employee, and in
accordance with any provisions of this Plan that are
specifically made effective to that date.
ARTICLE II
DEFINITIONS
This Plan is subject to technical restrictions that are
outlined in Appendices which, by this reference, are
incorporated into the Plan. Terms used in a single Article
or Appendix are generally defined in that Article or
Appendix. The following terms are used throughout the Plan.
2.01 "Account" means the value of all Accounts maintained
on behalf of a Participant or Beneficiary. An Account may
include a Salary Deferral Contributions Account, a Matching
Contributions Account, a Rollover Account, a Value Sharing
Contributions Account (containing profit sharing contributions),
a Special Contributions Account, a PAYSOP Account, a
Voluntary Contributions ("VOCON") Account, a Cash-or-Deferred
Value Sharing Bonus Deferral Account, and a Grandfathered
Account (containing profit sharing contributions made
before July 1, 1996).
2.02 "Affiliated Company" means a Participating Company
and, with respect to a Participating Company, (i) any
corporation that, pursuant to Code Section 414(b), is a
member of a controlled group of corporations of which the
Participating Company is a member; (ii) any employer that,
pursuant to Code Section 414(c), is under common control with
the Participating Company; (iii) any employer that, pursuant
to Code Section 414(m), is a member of an affiliated service
group of which the Participating Company is a member and (iv)
any employer that, pursuant to Code Section 414(o), is
required to be aggregated with the Participating Company.
2.03 "Annuity Starting Date" means the first day of the
first period for which an amount is payable as an annuity or,
in the case of a benefit not payable as an annuity, the
first day on which all events have occurred that entitle
the Participant to such a benefit.
2.04 "Beneficiary" means the person or persons, natural or
otherwise, designated pursuant to Article XII or, with regard
to the Plan's installment payment option, pursuant to the
"Installments" provisions of Article XI, to receive a
Participant's vested Account if the Participant dies before
distribution of his or her entire Account.
2.05 "Clorox Stock" means the Company's common stock.
2.06 "Code" means the Internal Revenue Code of 1986,
as amended.
2.07 "Committee" means the entity that, pursuant to
Article XV, administers the Plan.
2.08 "Company" means The Clorox Company, a Delaware
corporation, and any successor to all or a major portion
of the assets or business of The Clorox Company that, by
appropriate action, adopts the Plan.
2.09 "Compensation" means, except as provided below, wages
as defined in Code Section 3401(a) and all other payments
for which a statement is required to be furnished to an
Employee by a Participating Company under Code Sections
6041(d), 6051(d), and 6052; provided, however, that rules
that limit inclusion of payments because of the nature or
location of the employment or the services performed shall
be disregarded.
(a) Exclusions. Notwithstanding the foregoing,
Compensation does not include, settlements, compensation
adjustments made due to foreign service, payments made by
third party payors, reimbursements or other expense
allowances, welfare benefits (e.g., severance benefits,
short term disability benefits other than sick pay for
Employees, the terms of whose employment is governed by a
Collective Bargaining Agreement, long term disability benefits),
fringe benefits, moving expenses, contributions to or
distributions from a deferred compensation plan, or amounts
included in income due to the following: (i) the grant or
exercise of qualified or non-qualified stock options, stock
appreciation rights, or phantom stock, (ii) the grant of
restricted stock, (iii) a Code Section 83(b) election, (iv)
the lapse of forfeiture restrictions on restricted property,
(v) the sale of stock obtained under a compensatory plan,
and (vi) the receipt of dividends on restricted stock.
Except as specifically provided to the contrary in Article V
(Special Cash-or-Deferred Value Sharing Bonus Deferral),
Compensation does not include Cash-or-Deferred Valuing
Sharing Bonuses (whether taken in cash or deferred).
(b) Inclusions. Notwithstanding the foregoing,
Compensation includes elective contributions that are not
includible in income under Code Sections 125 (cafeteria plans),
402(e)(3) (elective deferrals) other than deferrals of
Cash-or-Deferred Value Sharing Bonuses, or 402(h) (simplified
employee pensions).
(c) Date. Compensation includes only Compensation
paid while an Employee is a Participant and an Eligible
Employee. Notwithstanding the foregoing, Compensation also
includes amounts earned while an Employee is a Participant and
an Eligible Employee but, due to the timing of pay periods and
pay days, paid during the first few weeks after the individual
ceases to be a Participant and an Eligible Employee (e.g.,
cashouts of vacation pay upon termination of employment or
receipt of a final paycheck after termination of employment).
For purposes of allocating the Value Sharing Contribution
described in Article V of this document, the following
additional rules apply.
(i) Compensation as described in the preceding
paragraph, is further limited to include only Compensation
paid after an Eligible Employee has satisfied the "One Year
Hold Out" requirement in Section 5.04 of this Plan.
(ii) For the Plan Year ending June 30, 1996,
Compensation of hourly nonunion employees, salaried
production employees, and salaried Atlanta plant team leaders
who first became Participants in The Clorox Company Profit
Sharing Plan on January 1, 1996 (each a "New Employee") will
be recognized to the extent that the Compensation was paid
on or after the date that the New Employee would have become
a Participant if New Employees had been categorized as
Eligible Employees on and after July 1, 1995.
(d) Limit. For a Plan Year, the Compensation of a
Participant will not exceed $150,000 (indexed). The
indexing in effect for a calendar year applies to any
period, not exceeding 12 months, over which Compensation
is determined beginning in that calendar year. If a Plan
Year consists of fewer than 12 months, the $150,000 (indexed)
limit will be multiplied by a fraction, the numerator of
which is the number of months in the Plan Year, and the
denominator of which is 12.
(e) Family Aggregation. In determining the $150,000
(indexed) limit, the family aggregation rules of Code Section
414(q)(6) apply, but the term "family" includes only the
spouse of the Participant and any lineal descendants of the
Participant who have not attained age 19 before the close of
the Plan Year. To the extent required by applicable Regulations,
if the limitation is reached for a family group, then the
limitation amount will be prorated among each member of the
family group in the proportion that each family member's
compensation bears to the total Compensation of the family group.
(f) Implementation of $150,000 Limit. With regard to
a Participant's 401(k) Contributions under this Plan, the
$150,000 limit described above will be established by adding
together (i) the Participant's Cash-or-Deferred Value Sharing
Bonus to the extent that the Participant deferred that bonus
under this Plan during the Plan Year, and (ii) the sum of the
Compensation amounts (excluding any Cash-or-Deferred Value
Sharing Bonus) for each period within the Plan Year for which
a Participant elects to defer Compensation other than a
Cash-or-Deferred Value Sharing Bonus under the Salary Deferral
provisions of this Plan.
(g) Nonresidents with No US Source Income. US payroll
income earned by nonresidents from Affiliated Companies will be
treated as Compensation to the extent that it would have
been treated as Compensation under the above definition if the
income were US source income.
2.10 "Directors" means the Board of Directors of the Company.
2.11 "Disability" means the mental or physical inability of
a Participant to perform his or her normal job, as evidenced by
receipt of disability benefits under the Social Security Act.
2.12 "Eligible Employee" means, subject to Section 18.06,
any Employee of a Participating Company other than (i) a
Leased Employee, (ii) a non-resident alien with no United States
source income unless the non-resident alien is on a Participating
Company's United States payroll, (iii) Employees sent, on or
after April 8, 1996, to a Participating Company by an
international subsidiary to participate in a training or
development program sponsored by that Participating Company
and Employees hired by a Participating Company with the
understanding that they will be sent to an international
subsidiary after participating in a training or development
program, and (iv) Employees whose compensation and conditions
of employment are governed by the terms of a collective
bargaining agreement unless and to the extent that a written
agreement between a Participating Company or its delegate
and the relevant union makes such coverage available.
2.13 "Employee" means a common law employee of an
Affiliated Company and any Leased Employee.
2.14 "ERISA" means the Employee Retirement Income Security
Act of 1974, as amended.
2.15 "401(k) Contributions" means Salary Deferral
Contributions and Cash-or-Deferred Value Sharing Bonus
Deferrals under this Plan.
2.16 "Highly Compensated Employee" is defined in an
Appendix to the Plan.
2.17 "Hour of Service" is defined in Article III.
2.18 "Leased Employee" means an individual who is not
otherwise an Employee and who, pursuant to Code Section 414(n),
performs services historically performed by employees in
the business area of the Participating Company on a
substantially full-time basis. Notwithstanding the foregoing,
and subject to Section 18.06, an individual will not be a
Leased Employee for a Plan Year if either (a) or (b) below
is applicable for that Plan Year:
(a) Safeharbor Plan. The individual is covered by
a money purchase pension plan meeting the requirements of
Code Section 414(n)(5)(B) and leased employees do not
constitute more than 20% of all Non-Highly Compensated
Employees of all Affiliated Companies.
(b) Recordkeeping Exception. The Committee has not
been notified by the individual that the individual is a
leased employee, the qualified plans (within the meaning of
Code Section 401(a)) that are maintained by each Affiliated
Company exclude leased employees from participation, none of
these plans is top heavy (within the meaning of Code Section
416), and the number of leased persons who, during that Plan
Year, perform at least 1500 Hours of Service of work
described in Code Sections 414(n)(2)(A) and (C) for any
Affiliated Company is less than 5% of the number of Employees
(excluding leased persons and Highly Compensated Employees)
covered by the qualified plans (within the meaning of Code
Section 401(a)) of all Affiliated Companies at any time
during the Plan Year.
2.19 "Non-Highly Compensated Employee" is an Employee who
is not a Highly Compensated Employee.
2.20 "Participant" means any Employee who became a
Participant and who retains an Account under the Plan.
2.21 "Participating Company" means the Company and any
Affiliated Company that is authorized by the Directors (or
by a committee appointed by the Directors) to participate in
the Plan, and that elects to participate in the Plan on
behalf of its Eligible Employees.
2.22 "Permitted Securities" means any stock, bond, mutual
fund share, mortgage, deed of trust or other like investment
instrument, all of which must be freely negotiable, not
subject to any restrictions on transfer and approved by the
Committee.
2.23 "Plan" means The Clorox Company Value Sharing Plan
set forth in this document, as amended from time to time.
2.24 "Plan Year" means July 1 through June 30.
2.25 "Regulations" means the federal Income Tax Regulations,
as amended.
2.26 "Remuneration" means compensation as defined in Code
Section 415(c)(3) and accompanying regulations. This
alternate definition of compensation must be used in
certain Appendices to this Plan. For purposes of the
Highly Compensated Employee Appendix to this Plan and the
Top Heavy Appendix to this Plan, Remuneration also includes
an Employee's elective deferrals under a qualified cash or
deferred arrangement described in Code Sections 401(k) and
402(e)(3), a simplified employee pension plan described in
Code Section 408(k)(6), and a cafeteria plan described in
Code Section 125. US payroll income earned by nonresidents
from Affiliated Companies will be treated as Remuneration
to the extent that it would have been treated as
Remuneration under the above definition if the income were
US source income.
2.27 "Trust Agreement" means an agreement entered into
between the Company (on behalf of all Participating
Companies) and a Trustee to provide for the investment,
management and control of Plan assets.
2.28 "Trustee" means any person or entity appointed by the
Company to hold the Plan's assets. The Plan may have more
than one Trustee.
2.29 "TRIP" means The Clorox Company Tax Reduction Investment
Plan ("TRIP") in effect prior to July 1, 1996.
2.30 "Valuation Date" means the last business day of each
Plan Year, and such other date or dates as may be designated
by the Committee for the valuation of Accounts.
2.31 "Year of Service" is defined in Article III of the Plan.
ARTICLE III
SERVICE
Unless otherwise indicated, the following provisions apply
for purposes of determining eligibility to participate in the
Plan and for computing vesting service under the Plan.
3.01 Hour of Service. An Hour of Service is each hour for
which an Employee is paid or entitled to payment from an
Affiliated Company for the performance of services for an
Affiliated Company.
3.02 Year of Service. A Year of Service is a consecutive or
non-consecutive 12-month period beginning on the first date
that an Employee performs an Hour of Service, on a
Reemployment Date (as defined below) or on an anniversary of
either of these dates. If an Employee is terminated and
rehired within a 12-month period, any period of less than 12
consecutive months during which an Employee does not perform
an Hour of Service will be counted when computing Years of
Service. A One Year (or longer) Period of Severance (as
defined below) will not be counted when computing Years of
Service.
3.03 One Year Period of Severance. A One Year Period of
Severance is a 12 consecutive month period that begins on an
individual's Severance from Service Date, or on an anniversary
of that date, during which the individual does not perform an
Hour of Service.
3.04 Severance from Service Date. An Employee's Severance
from Service Date is the earliest of the date on which the
Employee quits, retires, is discharged or dies, or the first
anniversary of the first date of an Employee's absence for any
other reason (e.g., illness, disability, vacation, a temporary
layoff, public service).
(a) Crediting. Notwithstanding the foregoing, the
Severance from Service Date for a Participant who is on an
Authorized Leave of Absence (as defined below) will be the date
that his or her Authorized Leave of Absence has terminated.
In addition, for the purpose of determining whether a
Participant has incurred a One Year Period of Severance, a
Participant will not incur the first One Year Period of
Severance that would otherwise be counted if severance is
due to an Authorized Leave of Absence (as defined below) or
a Maternity/Paternity Leave (as defined below).
(b) Authorized Leave of Absence. Authorized Leave of
Absence means a cessation from active employment with an
Affiliated Company pursuant to an established policy, due to
illness, disability, vacation, a temporary layoff, public
service, or any other reason.
(c) Maternity/Paternity Leave. Maternity/Paternity
Leave means an unpaid absence from work for any period by
reason of the Employee's pregnancy, birth of the Employee's
child, placement of a child with the Employee in connection
with the adoption of such child, or any absence for the
purpose of caring for such child for a period immediately
following such birth or placement.
3.05 Reemployment Date. An Employee's Reemployment Date
is the first date on which the Employee performs an Hour of
Service after a One Year Period of Severance.
3.06 Military Service. To the extent required by applicable
law, Hours of Service will be credited for periods of
military service.
3.07 Prior Service. The Company (or a committee appointed
by the Directors) may grant credit for prior service to
individuals who become Eligible Employees on or after June 30,
1996. Individuals who become Participants on June 30, 1996
will continue to be credited with all service with which
they were credited under TRIP as of June 29, 1996.
ARTICLE IV
PARTICIPATION
4.01 Service. Every Eligible Employee who was a
Participant in this Plan and/or in TRIP on the date that
TRIP is merged into this Plan will continue to be a
Participant in this Plan. Subject to Section 4.02, every
Eligible Employee who was not a Participant in this Plan or
in TRIP on the date that TRIP is merged into this Plan will
become a Participant in this Plan on the later of July 1,
1996 or the first day on which the Eligible Employee first
performs an Hour of Service as an Eligible Employee.
4.02 Cessation and Resumption. An individual ceases to be
a Participant when he or she ceases to have an Account.
Such an individual will again become a Participant on the
date that the individual again performs an Hour of Service
as an Eligible Employee.
ARTICLE V
CONTRIBUTIONS
5.01 Salary Deferral Contributions. Effective July 1,
1996 and subject to Section 18.06, a Participant who is an
Eligible Employee may elect to have a Participating Company
reduce the amount of his or her Compensation for each
payroll period by from 2% to 12% (or such other percentages
as the Committee or its delegate may determine from time to
time) and to have that amount contributed to the Plan as a
Salary Deferral Contribution on his or her behalf. A
Participant may initiate or change the percentage of
Salary Deferral Contribution (in 1% increments) by
providing notice to the Committee or its delegate that
satisfies such requirements as the Committee may determine.
(a) Special Cash-or-Deferred Value Sharing Bonus
Deferral. Subject to Section 18.06, a Participant who is
an Eligible Employee may submit a special election to the
Committee or its delegate that satisfies such requirements
as the Committee may determine, to defer up to 100% of any
Cash-or-Deferred Value Sharing Bonus that becomes payable
to that Participant after the Participant submits this
election and during the Plan Year for which this election
is effective. Notwithstanding the foregoing, if a
Participant is eligible to defer all or part of a
Cash-or-Deferred Value Sharing Bonus under any other deferred
compensation plan (including, but not limited to The Clorox
Company Nonqualified Deferred Compensation Plan), the
Participant will not be eligible to defer any part of that
Cash-or-Deferred Value Sharing Bonus under this Plan.
(b) Timing. 401(k) Contributions will be paid to the
Trustee as soon as practical after the date on which those
amounts would have been paid to Participants in the absence
of a deferral election and in no event later than 90 days
after that date.
5.02 Matching Contributions. Subject to (a) and (b) below,
effective July 1, 1996, each Participating Company will
contribute a Matching Contribution equal to 100% of the Salary
Deferral Contribution received by a Trustee on behalf of a
Participant for a Plan Year up to a maximum of $750 for any
one Plan Year.
(a) Cash-or-Deferred Value Sharing Bonus.
Notwithstanding the foregoing, no Cash-or-Deferred Value
Sharing Bonus that is deferred under the preceding Section
will attract a Matching Contribution.
(b) One Year Hold Out. Notwithstanding anything to
the contrary in this Plan except Section 18.06, an Employee
who is hired or rehired on or after January 1, 1996, will not
be eligible to receive a Matching Contribution under this Plan
until that Employee completes One Year of Service. For this
purpose, prior service will be counted to the extent provided
in Article III.
5.03 One-Time $50 Matching Contribution. Section 3.2 of the
TRIP document in effect on January 1, 1996 provided that each
TRIP participant would receive a one-time matching contribution
if that participant elected to make salary deferral contributions
as of the earliest date that he or she was eligible to participate
in TRIP. Notwithstanding anything to the contrary in this Plan
except Section 18.06, no Eligible Employee who first becomes a
Participant on or after July 1, 1996 will be eligible to receive
the one-time matching contribution described in Section 3.2 of
the TRIP document in effect on January 1, 1996.
5.04 Value Sharing Contribution. For each Plan Year, the
Participating Companies will make a Value Sharing Contribution
to the Trust in an amount determined by the Company.
(a) Condition. The Value Sharing Contribution for a
Plan Year will be conditioned on the contribution not exceeding
the maximum amount currently deductible by the Company in
determining its consolidated taxable income under the Code,
after first subtracting the amount of all deductible
contributions (including matching contributions) to all
pension plans for all employees of all Affiliated Companies.
(b) Allocations. Subject to Section 18.06, the Value
Sharing Contribution for each Plan Year and any forfeitures
for that Plan Year will be allocated as follows:
(i) Grandfathered Allocation. First, for the
Plan Year ending June 30, 1996, the Value Sharing Contribution
will be allocated to the Value Sharing Contributions Accounts
of Grandfathered Participants (as defined below) in the same
proportion that each Grandfathered Participant's Compensation
from all Participating Companies for the Plan Year bears to
the total Compensation of all Grandfathered Participants from
all Participating Companies for that Plan Year. Allocations
to Grandfathered Participants under this paragraph (i) will
be equal to the amount of Value Sharing Contribution that
each Grandfathered Participant would have received under the
profit sharing computation and allocation provisions contained
in Article III and in Section 4.2 of The Clorox Company Profit
Sharing Plan document in effect on June 30, 1995.
(ii) Standard Allocation. Second, the balance of
the Value Sharing Contribution will be allocated to the Value
Sharing Contributions Accounts of Qualified Participants (as
defined below) in the same proportion that each Qualified
Participant's Compensation from all Participating Companies for
the Plan Year bears to the total Compensation of all Qualified
Participants from all Participating Companies for that Plan Year.
The maximum amount of Value Sharing Contribution allocated
under this paragraph (ii) to a Qualified Participant for a
Plan Year may not exceed 7% of that Qualified Participant's
Compensation from all Participating Companies for the Plan
Year.
(iii) Unvested Participant Allocation. Third,
the balance of the Value Sharing Contribution will be allocated
to the Value Sharing Contributions Accounts of Qualified
Participants who were not 100% vested in their Value Sharing
Contributions Accounts on the last day of the Plan Year for
which the allocation is made (each an "Unvested Participant")
in the same proportion that each Unvested Participant's
Compensation from all Participating Companies for the Plan
Year bears to the total Compensation of all Unvested
Participants from all Participating Companies for that Plan
Year.
(iv) Allocation of Forfeitures in 1996. For the
Plan Year ending June 30, 1996, available forfeitures will be
allocated to the Value Sharing Contributions Accounts of
Qualified Participants and Grandfathered Participants in the
same proportion that the Qualified Participant's or the
Grandfathered Participant's Compensation from all Participating
Companies for the Plan Year bears to the total Compensation of
all Qualified Participants and all Grandfathered Participants
from all Participating Companies for that Plan Year.
(v) Allocation of Forfeitures after 1996. For Plan
Years ending after June 30, 1996, available forfeitures will be
allocated to the Value Sharing Contributions Account of a
Qualified Participant in the same proportion that the Qualified
Participant's Compensation from all Participating Companies
for the Plan Year bears to the total Compensation of all
Qualified Participants from all Participating Companies for
that Plan Year.
(vi) Qualified Participant. A Qualified Participant
is a Participant who was an Eligible Employee on the last day of
the Plan Year. A Participant who separates from service as an
Eligible Employee during a Plan Year due to his or her death,
Disability, attainment of age 60, attainment of age 55 with
10 or more years of Service or, as determined by the Committee,
a plant closing, a reduction in force, or a divestiture, will be
considered, for purposes of this definition, to have been an
Eligible Employee on the last day of that Plan Year.
Notwithstanding the foregoing, a Qualified Participant does not
include a Grandfathered Participant (as defined below), unless
and until the Grandfathered Participant again becomes an
Eligible Employee after January 1, 1996.
(vii) Grandfathered Participant. A Grandfathered
Participant is a Participant who was an Eligible Employee on
July 1, 1995 and who separated from service with all
Participating Companies on or after July 1, 1995 and before
January 1, 1996 due to his or her death, Disability, attainment
of age 60, attainment of age 55 with 10 or more years of Service
or, as determined by the Committee, a plant closing, a reduction
in force, or a divestiture.
(viii) One Year Hold Out. Notwithstanding anything
to the contrary in this Plan except Section 18.06, an Eligible
Employee will not be eligible to receive a Value Sharing Contribution
under this Plan for a Plan Year unless that Employee has
completed One Year of Service prior to the end of the Plan Year
for which the Value Sharing Contribution is made. For this
purpose, prior service will be counted to the extent provided in
Article III.
5.05 Special Contributions. A Participating Company may
authorize qualified nonelective employer contributions to the
extent, and only to the extent, needed to satisfy the tests
described in the Testing 401(k) and Matching Contributions
Appendix to this Plan. These qualified nonelective employer
contributions will be allocated to Non-Highly Compensated
Eligible Employees from the lowest paid to the highest paid in
an amount up to or equal to their Code Section 415 allocation
limit.
5.06 Rollover Contributions. The Committee or its delegate
may authorize a Trustee to accept a Rollover Contribution made
in cash and attributable to a distribution received by an Eligible
Employee from another tax-qualified plan. Rollover Contributions
will be held in the Participant's Rollover Account unless they are
used to satisfy the buy back provision in Article VIII of the Plan.
If the Committee should determine that a rollover was improperly
contributed to this Plan, that amount, adjusted for earnings and
losses, will immediately be (1) segregated from all other Plan
assets, (2) treated as a nonqualified trust established by and for
the benefit of the individuals on whose behalf the contribution was
made, and (3) distributed to those individuals. Any such
nonqualifying contribution will be deemed never to have been
a part of the Plan.
5.07 Trust-to-Trust Transfers. The Committee or its
delegate may authorize a Trustee to accept a Trust-to-Trust
Transfer of assets (other than assets that are subject to the
survivor annuity requirements of Code Section 401(a)(11)), from
another tax-qualified plan.
5.08 Voluntary Contributions. The Plan will not accept any
voluntary (after-tax) employee contributions other than buy
back contributions pursuant to Article VIII, and any such
voluntary contributions made by a Participant pursuant to the
terms of a prior plan will be held in the Participant's
Voluntary Contributions ("VOCON") Account.
5.09 Restoration. If a Participant was improperly excluded
at any time from an allocation or was allocated an insufficient
amount, an amount computed on the same basis as the allocation
will be added to that Participant's Account, after that amount
has been adjusted to reflect the gain or loss that was allocated
to Participants' Accounts in each Plan Year since the Plan Year
for which the restoration is to be made.
5.10 Deductibility. To the extent that a Participating Company
is not allowed a current deduction under the Code for any
contribution made to the Plan, the Participating Company may,
within one year following a final determination of the disallowance,
whether by agreement with the Internal Revenue Service or by final
decision of a court of competent jurisdiction, demand repayment
of the disallowed contribution, and the Trustee shall return the
contribution within one year following the disallowance. Earnings
of the Plan attributable to such a contribution may not be returned
to the Participating Company, but losses attributable to such a
contribution will reduce the amount returned.
5.11 Mistake. If, within one year of making a contribution to
the Plan, the Committee certifies to the Trustee that the contribution
was made by the Company under a mistake of fact, the Trustee will,
before the expiration of that year, return the contribution to the
Company.
5.12 Limits. As more fully discussed in the
Appendices to this Plan, 401(k) Contributions, Matching
Contributions, Value Sharing Contributions, and Special
Contributions are subject to additional limits.
ARTICLE VI
INVESTMENT FUNDS AND COMMON STOCK
6.01 Individual Direction of Investments. At the direction
of the Committee, the Trustee may establish separate funds
to which Participants may direct the investment of their
Accounts. Investment in these funds will be subject to such
restrictions and administrative procedures as are imposed by
the Committee or its delegate, pursuant to their discretionary
authority to administer and interpret the Plan, including, but
not limited to, procedures for investment of amounts for
which no investment direction is given by a Participant.
6.02 PAYSOP Accounts and Common Stock.
(a) Definition. A PAYSOP Account is an account
established for a Participant under this Plan to record any
PAYSOP contributions made by the Company pursuant to the
terms of a prior plan document and amounts transferred from
The Clorox Company Payroll-Based Stock Ownership Plan for
Hourly Paid Employees, as adjusted for earnings and losses.
(b) Investment. Until the Company receives a
determination letter from the Internal Revenue Service confirming
the tax-qualified status of this Plan and the tax-qualified
status of the terminated TRIP Plan (including the terminated
PAYSOP provisions contained in that Plan), amounts held in PAYSOP
Accounts and interest received on those amounts will be held in
a Clorox Company Common Stock Fund identified in the Trust
Agreement and will be subject to the terms and conditions of
the Trust Agreement.
(i) Elections. Once a Participant who is also an
Employee has attained age 55 and has completed 10 years of
participation in a PAYSOP feature contained in this Plan
(including any years of participation in The Clorox Company
Payroll-Based Stock Ownership Plan for Hourly Paid Employees)
the Participant may elect, pursuant to procedures established
by the Committee or its delegate, to invest all or part of his
or her PAYSOP Account in one or more of the separate funds
established by the Committee pursuant Section 6.01 above. Such
an election is also available to Alternate Payees, to
Beneficiaries, and to Participants who are eligible to receive
a distribution from the Plan under the provisions of Article XI.
(ii) Deletion of PAYSOP Provisions. As soon as
administratively practicable after the Company receives a
determination letter from the Internal Revenue Service
confirming the tax-qualified status of this Plan and a
determination letter from the Internal Revenue Service
confirming the tax-qualified status of the TRIP Plan merged into
this Plan (including the terminated PAYSOP provisions formerly
contained in that Plan), this Section 6.02 and all references
to PAYSOP in this Plan document will be null and void, amounts
subject to this Section will be transferred to a Clorox Company
Common Stock Fund maintained pursuant to Section 6.01 above, and
amounts subject to this Section 6.02 will be treated, for all
purposes under this Plan, in the same manner that fully vested
Value Sharing Contributions are treated.
6.03 Responsibility. Except to the extent that a Participant's
PAYSOP Account is required to be invested in a Clorox Company
Stock Fund, each Participant is solely responsible for the
investment of his or her Account. No Plan fiduciary and no
Employee is authorized to advise a Participant regarding this
investment. The offering of an investment fund under this Plan
is not to be treated as a recommendation for investment in that
fund.
ARTICLE VII
VALUATION
The value of a Participant's Account on any date will be deemed
to be the net balance of the Account on the Valuation Date
immediately preceding the date as of which the value is to
be determined, adjusted by the Committee or its delegate,
pursuant to their discretionary authority to administer and
interpret the Plan and to determine eligibility for benefits
under the Plan. Adjustments will include increases due to
contributions to the Account since the relevant Valuation
Date; decreases due to Plan expenses, distributions, loans,
or withdrawals paid from the Account since the relevant
Valuation Date; and adjustments for income or loss.
ARTICLE VIII
VESTING
8.01 Vesting. The vesting service of a Participant in the
Value Sharing Plan and/or TRIP who does not have an Hour of
Service on or after the date that TRIP is merged into this Plan
will be governed by the terms of the former Profit Sharing
Plan and/or TRIP, as the case may be, in effect on the date
that the Participant ceased to be an Employee. Participants
who have an Hour of Service on or after July 1, 1996 will have
nonforfeitable, vested rights to their Salary Deferral
Contributions Accounts, Cash-or-Deferred Value Sharing Bonus
Deferral Accounts, Matching Contributions Accounts, Special
Contributions Accounts, Rollover Accounts, PAYSOP Accounts, and
Voluntary Contributions ("VOCON") Accounts at all times.
Subject to the Top Heavy Provisions of this Plan, the Value
Sharing Contributions Account of a Participant who has an Hour
of Service on or after January 1, 1996 will vest in accordance
with the following schedule.
If Years of Service Percentage of
Equal Account Vested
1 0%
2 0%
3 34%
4 66%
5 100%
In addition, a Participant will have a fully vested,
nonforfeitable interest in the entire amount of his or her
Value Sharing Contributions Account on the first to occur of
the following events:
(a) The Participant's death while employed by an
Affiliated Company.
(b) The Participant's attainment of age 60 while
employed by an Affiliated Company.
(c) The Participant's separation from service with all
Affiliated Companies due to a Disability.
8.02 Forfeitures.
(a) Allocation of Forfeitures from Value Sharing
Contributions Accounts. If a Participant separates from
service before the Participant is fully vested in his or her
Account, then the unvested portion of that Account will be
forfeited immediately after a distribution is made of the
Participant's vested Account. If a Participant is not vested
in any part of his or her Account, the Participant's entire
Account will be deemed to have been distributed pursuant to the
preceding sentence. Even if the Participant's vested Account
is not distributed, the unvested portion of the Participant's
Account will be forfeited upon expiration of five consecutive
One Year Periods of Severance. These forfeited amounts will
be used, as determined by the Committee, in its sole discretion,
to pay administrative expenses, to reduce contributions to the
Plan, to make earnings adjustments to Participants' Accounts,
to restore forfeitures as provided in (c) below, and /or to
increase the amount allocated under the Value Sharing
Contribution provisions of this Plan.
(b) Failure to Vest. If a Participant incurs five
consecutive One Year Periods of Severance, Years of Service
after that five-year period will not be taken into account
for purposes of determining the vested percentage of amounts
that are forfeited pursuant to paragraph (a) above and not
restored under paragraph (c) below.
(c) Restoration. Should an individual resume
Employee status after terminating employment, but before
incurring five consecutive One Year Periods of Severance, then
any amount forfeited under paragraph (a) above will be restored
to that individual's Account without earnings if the individual
pays to this Plan the full amount of the distribution described
in paragraph (a) above, before the earlier of 5 years after the
individual resumed Employee status or the close of the first
period of 5 consecutive One Year Periods of Severance following
the date of the last distribution described in paragraph (a)
above. Funds for restoring forfeitures under this Section will
be drawn first from forfeitures in the Plan Year in which the
Participant resumes Employee status and then from a special
contribution to the Plan made by a Participating Company
designated by the Committee or its delegate. This special
contribution will not be subject to the provisions described
in the Limitations on Allocations Appendix to this Plan.
8.03 Change in Vesting Schedule. If the Plan's vesting
schedule is amended, the vested percentage of every Employee
who is a Participant on the amendment adoption date or the
amendment effective date, whichever is later, may not be less
than the Participant's vested percentage determined under the
Plan without regard to the amendment. In addition, if the
Plan's vesting schedule is amended, each such Participant
who has completed three Years of Service and whose vested
percentage is determined under the new vesting schedule may
elect to have his or her vested percentage determined under
the old vesting schedule if the old vesting schedule would
be more favorable.
ARTICLE IX
IN-SERVICE WITHDRAWALS
9.01 Hardship Withdrawals. Subject to Section 18.06 and
to such administrative procedures as the Committee or its
delegate may establish, if a Participant has an immediate
and heavy financial need (as defined below), and has no
other resources reasonably available to meet this need
(as defined below), the Participant may request a hardship
withdrawal from the vested portion of his or her Value Sharing
Contributions Account, Grandfathered Contributions Account,
Rollover Account, and/or a hardship withdrawal of an amount
equal to Salary Deferrals held in the Participant's Salary
Deferral Contributions Account and the Participant's
Cash-or-Deferred Value Sharing Bonus Deferral Account;
provided, however, that earnings on post-1988 401(k)
Contributions may not be withdrawn.
(a) Immediate and Heavy Financial Need. A
Participant's request for a hardship withdrawal may not
exceed the amount immediately required (including the
amount necessary to pay any federal, state or local income
taxes or penalties reasonably anticipated to result from
the withdrawal) by the Participant to (i) purchase the
Participant's primary residence (excluding mortgage payments),
(ii) pay deductible medical expenses incurred by the
Participant, the Participant's dependents or the Participant's
spouse, or necessary for those persons to obtain medical
care, (iii) prevent eviction from, or foreclosure of, the
Participant's primary residence, or (iv) pay for post-high
school tuition, related educational fees, and room and
board for the next 12 months for the Participant, the
Participant's spouse, or the Participant's dependents.
(b) No Other Resources Reasonably Available. A
Participant who makes a hardship withdrawal request must
represent in a form satisfactory to the Committee or its
delegate that his or her immediate and heavy financial
need cannot be relieved (i) through reimbursement or
compensation by insurance or otherwise, (ii) by reasonable
liquidation of the Participant's assets, to the extent
such liquidation would not itself cause an immediate and
heavy financial need, (iii) by cessation of 401(k)
Contributions to this Plan or of contributions to any
other plan of deferred compensation, (iv) by other
distributions (including distributions of a Participant's
Voluntary Contributions ("VOCON") Account, if any, under
this Plan) or nontaxable (at the time of the loan) loans
from plans maintained by any employer, or (v) by borrowing
from commercial sources on reasonable commercial terms.
For purpose of this Section, the Participant's assets are
deemed to include those assets of the Participant's spouse
and minor children that are reasonably available to the
Participant.
9.02 Voluntary Contributions ("VOCON") Accounts. A
Participant may elect to withdraw all or any part of his
or her Voluntary Contributions ("VOCON") Account, including
earnings thereon, in cash or Permitted Securities, by
giving notice to the Committee or its delegate in accordance
with rules established by the Committee. All such
withdrawals will be distributed by the Committee or its
delegate as soon as reasonably practicable after receipt
of the Participant's notice. All withdrawals made
pursuant to this provision will be deemed to be withdrawals
of and the return of Voluntary ("VOCON") Contributions
made before January 1, 1987, to the maximum extent
thereof, and only thereafter will any such withdrawals be
deemed to constitute the withdrawal of any earnings or
appreciation attributable to any assets held at any time
for a Voluntary ("VOCON") Contributions Account.
9.03 Frozen Assets. Notwithstanding anything to the
contrary in this Plan, frozen assets such as a Participant's
share of any frozen Confederation Life GIC are not available
for inservice withdrawals.
9.04 Form. Except as provided in Section 9.02 (VOCON
Accounts), all withdrawals from the Plan will be made in the
form of a single sum cash payment.
ARTICLE X
LOANS
10.01 Authorization. Effective July 1, 1996, the
Committee or its delegate may direct the Trustee to make a
new loan to a Participant who is employed by a Participating
Company and, to the extent that they are parties in interest
within the meaning of Section 408(b)(1) of ERISA (but only to
that extent), to other Participants and to Beneficiaries
(collectively referred to as "Borrowers").
(a) Available Funds. Funds in the following Accounts
are available for loans, to the extent those funds are vested.
o Rollover Account
o Grandfathered Contributions Account
o Value Sharing Contributions Account
o Salary Deferral Contributions Account
o Cash-or-Deferred Value Sharing Bonus Deferral Account
o Matching Contributions Account
(b) Number of Loans. A Borrower may not have more than
two loans outstanding from any Plan maintained by an Affiliated
Company at any one time. Loans merged into this Plan from TRIP
will be governed by the relevant provisions of the TRIP Plan
and will count against this two-loan limit.
(c) Frozen Assets. Notwithstanding anything to the
contrary in this Plan, frozen assets such as a Participant's
share of any frozen Confederation Life GIC are not subject to
the loan provisions of this Plan.
10.02 Amount. The amount of any loan will not be less than
$750. Immediately after the origination of the loan, the loan
may not exceed 50% of the Borrower's vested benefits under this
Plan. Furthermore, the amount of any loan, when added to the
outstanding balance of all other loans to the Borrower from
this Plan and the plans of Affiliated Companies, may not exceed
the lesser of (a) one half of the Borrower's vested benefits
under this Plan and the plans of Affiliated Companies, valued
as of each plan's most recent valuation date; and (b) $50,000
reduced by the excess, if any, of (i) the Borrower's highest
outstanding loan balance under this Plan and the plans of
Affiliated Companies during the 12-month period ending on the
day before the loan is made; over (ii) the Borrower's
outstanding loan balance under this Plan and the plans of
Affiliated Companies on the date the loan is made.
10.03 Security. Each loan will be secured by the portion
of the Participant's Account from which the loan is made and
by payroll deduction as provided below.
10.04 Individual Account. All loans will be investments of
the Borrower's Account. Costs charged by the Trustee to
establish, process or collect the loan will be charged to the
Borrower's Account.
10.05 Interest. Interest will be charged on Plan loans at a
formula rate based on factors considered by commercial entities
that make similar loans. At the discretion of the Committee or
its delegate, the interest rate will be redetermined as new loans
are made.
10.06 Repayment. The term of any loan will not exceed 5
years; provided, however, that a loan to purchase a principal
residence for the Borrower must not exceed 15 years. Except to
the extent provided in Regulations, substantially level
amortization of the loan, with payments not less frequently than
quarterly, will be required over the term of the loan. The loan
will be repaid by payroll deduction; provided, however, that
periodic cash payments may be made when payroll deduction is
not possible.
10.07 Default. If a Borrower fails to repay a loan within
the time prescribed by the Committee, the Trustee may levy on
the Borrower's Account at such time as the Borrower is eligible
for a distribution or a withdrawal under the Plan. In addition,
in the event of a failure to repay, the Trustee may exercise
every creditor's right at law or equity available to the Trustee.
10.08 Guidelines. The Committee or its delegate will develop
guidelines for administration of the Plan's loan program.
ARTICLE XI
DISTRIBUTION OF BENEFITS
11.01 Date Benefits Become Distributable. Vested Plan benefits
will become distributable under the following circumstances:
(a) Termination of Employment. The Participant's
termination of employment due to death, Disability, or
separation from service.
(b) Plan Termination. Termination of the Plan; provided,
however, that neither a Participant's Salary Deferral
Contributions Account, nor a Participant's Cash-or-Deferred
Value Sharing Bonus Deferral Account, nor a Participant's
Matching Contributions Account, nor a Participant's Special
Contributions Account may be distributed pursuant to this
paragraph unless the Participant elects to receive his or
her distribution in the form of a lump sum and there is no
successor plan.
(c) Sale of Assets. The sale of substantially all the
assets used by a Participating Company in a trade or business
to an unrelated corporation; provided, however, that neither a
Participant's Salary Deferral Contributions Account, nor a
Participant's Cash-or-Deferred Value Sharing Bonus Deferral
Account, nor a Participant's Matching Contributions Account,
nor a Participant's Special Contributions Account may be
distributed pursuant to this paragraph unless the Participant
continues employment with the unrelated corporation, the
Company continues to maintain this Plan, and the Participant
elects to receive his or her distribution in the form of a
lump sum.
(d) Sale of Subsidiary. The sale of a Participating
Company's interest in a subsidiary to an unrelated entity;
provided, however, that neither a Participant's Salary Deferral
Contributions Account, nor a Participant's Cash-or-Deferred
Value Sharing Bonus Deferral Account, nor a Participant's
Matching Contributions Account, nor a Participant's Special
Contributions Account may be distributed pursuant to this
paragraph unless the Participant continues employment with the
subsidiary, the Company continues to maintain this Plan, and the
Participant elects to receive his or her distribution in the form
of a lump sum.
11.02 Date Benefits Will Be Distributed. Once Plan benefits
become distributable, they will be distributed as soon as
practicable after the Participant or the Beneficiary, as the
case may be, has elected, pursuant to procedures established
by the Committee or its delegate, to receive a distribution.
11.03 No Election. If a Participant, or a Beneficiary, as
the case may be, does not elect a distribution, benefits will
be distributed pursuant to the Distribution Provisions
Appendix of this Plan. A Participant's or Beneficiary's
failure to affirmatively elect a distribution will be deemed
an election to defer payment of benefits under this Plan.
11.04 Retroactive Payment. If the amount of a distribution
cannot be ascertained by the date payment is required pursuant
to this Article, or it is not possible to make such payment
because the Committee has been unable to locate the Participant
or Beneficiary after making reasonable efforts to do so, a
payment may be made no later than 60 days after the earliest
date on which the amount of such payment can be ascertained
under the Plan, or the date on which the recipient is located.
11.05 Inability to Locate Recipient. If a benefit under the
Plan remains unpaid for two years from the date it becomes
payable, solely by reason of the inability of the Committee,
exercising due diligence, to locate the recipient of the payment,
the benefit shall be treated as a forfeiture pursuant to the
terms of the Plan. Any amount forfeited in this manner shall be
restored, without earnings, pursuant to the restoration of
forfeitures provisions of this Plan, upon presentation of an
authenticated claim by the recipient or the recipient's personal
representative.
11.06 Distribution to Minor or Incompetent. In the event a
distribution is to be made to a minor, or to an incompetent
person, the Committee may direct that the distribution be paid
to the legal guardian, or if none, to a parent of such person,
or to a responsible adult with whom the person maintains
residence, or to the custodian for the person under the Uniform
Gift to Minors Act or Gift to Minors Act, if permitted by the
laws of the state in which the person resides.
11.07 Small Account. Notwithstanding any provision of this
Plan, if the vested portion of a Participant's Account on the
date the Participant ceases to be an Employee is, and at the
time of any earlier distribution or withdrawal was, $3,500 or
less, the Participant's Account will be distributed, in cash,
to the Participant, or Beneficiary, as the case may be, as soon
as practicable, without the consent of the Participant or the
Participant's spouse.
11.08 Form of Distribution. Amounts held in a Participant's
Account will be paid in cash as a total distribution, unless
the Participant (or Beneficiary) elects otherwise pursuant to
(a) or (b) below:
(a) Installments. If a Participant has a Termination
of Employment as defined in Section 11.01(a) above, if that
Participant attained age 55 with 10 Years of Service (or age 60
without a Years of Service requirement) prior to Termination of
Employment, and if that Participant has amounts in his or her
Value Sharing Contributions Account attributable to contributions
made before July 1, 1996 ("Grandfathered Amount"), the
Participant may request that his or her Grandfathered Amount,
adjusted for investment gains and losses, be paid out in a
series of substantially equal monthly installments over a
period of 5, 10, 15, or 20 years; provided, however, that the
period selected by the Participant must satisfy the requirements
contained in the Distribution Provisions Appendix to this Plan.
(i) Beneficiary. If a Participant dies before
receiving all of his or her elected installments, the
Beneficiary named by the Participant when electing to receive
installments will receive the balance of these installments;
provided, however, that if that Beneficiary dies after the
Participant but before having received the balance of these
installments, the unpaid balance will be paid to the Beneficiary's
estate in a single sum payment as soon as administratively
practicable after the Beneficiary's death. If the Participant
dies after his or her Annuity Starting Date and after his or
her named Beneficiary has died, any remaining unpaid installments
will be paid, as soon as administratively practicable, to the
Participant's estate in a single sum payment.
(ii) Designation. The Participant will follow the
procedures outlined in Sections 12.01 and 12.02 (if applicable)
when naming a Beneficiary to receive any unpaid installments;
provided, however, that a Participant may name only one
Beneficiary to receive such installments.
(iii) Single Sum. A Participant or a Beneficiary
who is receiving installments may elect, at any time, to cease
receiving installments and to receive the remaining installments
in a single sum payment as soon as administratively practicable.
(b) Clorox Stock. When requesting a distribution as
provided in this Article, a Participant (or Beneficiary) may
elect to receive the portion of his or her Account that is
invested in a Clorox Company Common Stock Fund in cash or in
whole shares of Clorox Common Stock. Any balance representing
fractional units of a Clorox Company Common Stock Fund will be
distributed in cash.
11.09 Continued Employment.
(a) Cessation of Benefits. Subject to the Distribution
Provisions Appendix to this Plan, a Participant ("Reemployed
Participant") will cease to receive benefits from the Plan if he
or she is reemployed by an Affiliated Company (including the
Company).
(b) Annuity Starting Date. When a Reemployed Participant
ceases covered employment under the Plan, the Participant will
be treated as having a new Annuity Starting Date and his or her
subsequent Plan benefits will be redetermined to reflect prior
benefit payments.
(c) Death. If a Reemployed Participant dies while
benefits are suspended, any death benefits will be provided in
accordance with the Participant's most recent, properly completed,
Beneficiary designation.
11.10 Direct Rollover. Notwithstanding any provision of this
Plan to the contrary that would otherwise limit a Distributee's
election under this Plan, a Distributee may elect, at the time and
in the manner prescribed by the Committee or its delegate, to have
any portion of an Eligible Rollover Distribution paid directly to
an Eligible Retirement Plan specified by the Distributee in a
Direct Rollover. For these purposes, the following definitions
apply:
(a) Eligible Rollover Distribution. An Eligible
Rollover Distribution is any distribution of all or any portion
of the balance to the credit of the Distributee, except that
an Eligible Rollover Distribution does not include: any
distribution that is one of a series of substantially equal
periodic payments (not less frequently than annually) made
for the life (or life expectancy) of the Distributee or the
joint lives (or joint life expectancies) of the Distributee
and the Distributee's designated Beneficiary, or for a
specified period of 10 years or more; any distribution to the
extent that distribution is required under Section 401(a)(9) of
the Code; and the portion of any distribution that is not
includible in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities).
(b) Eligible Retirement Plan. An Eligible Retirement
Plan is an individual retirement account described in Code
Section 408(a), an individual retirement annuity described in
Code Section 408(b), an annuity plan described in Code Section
403(a), or a qualified trust described in Code Section 401(a),
that accepts the Distributee's Eligible Rollover Distribution.
However, in the case of an Eligible Rollover Distribution to the
surviving spouse, an Eligible Retirement Plan is an individual
retirement account or individual retirement annuity.
(c) Distributee. A Distributee includes an Employee or
former Employee. In addition, the Employee's or former Employee's
surviving spouse and the Employee's or former Employee's spouse
or former spouse who is the Alternate Payee under a Qualified
Domestic Relations Order, as defined in Code Section 414(p), are
Distributees with regard to the interest of the spouse or former
spouse.
(d) Direct Rollover. A Direct Rollover is a payment by
the Plan to the Eligible Retirement Plan specified by the
Distributee.
11.11 Notice. The Committee or its delegate will provide each
Participant with a general notice of distribution no less than
30 nor more than 90 days before the participant's Annuity Starting
Date. The notice will set forth the following information
(i) an explanation of the eligibility requirements for, the
material features of, and the relative values of the optional
forms of benefits available under the Plan, (ii) the
Participant's right to defer receipt of a distribution
under the Plan, and (iii) the Participant's right (if any)
to authorize a rollover of his or her Plan benefits.
11.12 Waiver. Notwithstanding anything to the contrary
in this Plan, if a distribution is one to which Sections
401(a)(11) and 417 of the Internal Revenue Code do not apply,
that distribution may begin less than 30 days after the notice
required under Regulation 1.411(a)-11(c) and the notice under
Code Section 402(f) is given, provided that (1) the Committee
or its delegate clearly informs the Participant that the
Participant has a right to a period of at least 30 days after
receiving the notice to consider the decision of whether or
not to elect a distribution (and, if applicable, a particular
distribution option), and (2) the Participant, after receiving
the notice, affirmatively elects a distribution.
ARTICLE XII
BENEFICIARY DESIGNATIONS
12.01 All Participants. A Participant may designate one or
more primary Beneficiaries and one or more secondary
Beneficiaries to receive any benefit payable from the
Participant's Account on the Participant's death. A
Participant's Beneficiary designation will be made pursuant to
such procedures as the Committee may establish, and shall be
delivered to the Committee or its delegate before the
Participant's death. The Participant may revoke or change
this designation at any time before his or her death by
following such procedures as the Committee or its delegate
may establish. Subject to Section 18.06, the Beneficiary
of a Participant who is living on June 30, 1996 and whose
TRIP benefits are merged into this Plan on or after June 30,
1996 will be the Beneficiary who would receive the Participant's
benefits under the terms of this Plan and such a Participant's
beneficiary designation under TRIP will be null and void as of
midnight on June 30, 1996.
12.02 Married Participants. If the Participant is married,
and if the Participant names a Beneficiary other than his or
her surviving spouse as a primary Beneficiary, the Participant's
surviving spouse must irrevocably waive his or her right to the
Participant's Account in a written document, delivered to the
Committee or its delegate, that acknowledges the effect of the
waiver, and that is witnessed or notarized by a notary public
or, to the extent permitted by the Company, witnessed by a
Company representative. In the waiver, the Participant's
surviving spouse must consent to the specific non-spouse
Beneficiary(s) named by the Participant. The waiver will be
effective only with respect to that spouse. If the Participant
is legally separated or abandoned and the Participant has a
court order to that effect (and there is no qualified domestic
relations order that provides otherwise), or the surviving
spouse cannot be located, then a waiver need not be filed with
the Committee or its delegate when a married Participant names
a Beneficiary other than his or her spouse. Spousal consent
will be irrevocable unless the Participant changes his or her
Beneficiary or form of distribution designation; upon such
event, spousal consent shall be deemed to be revoked. If the
spouse consents to the designation of a trust as the
Participant's beneficiary, spousal consent will not be
required for the designation of or change in trust
beneficiaries.
12.03 Ineffective Designation. If the Company has not
received a Participant's Beneficiary designation before the
Participant's death or if the Participant does not otherwise
have an effective Beneficiary designation on file when he or
she dies, the Participant's Account will be distributed to
the Participant's spouse if surviving at the Participant's
death, or if there is no such spouse, the Participant's estate.
12.04 Installments. The "Installments" provision in
Article XI contains additional information regarding
designation of a Beneficiary for purposes of the Plan's
installment payment option.
ARTICLE XIII
CLAIMS PROCEDURE
If a Participant or Beneficiary ("Claimant") believes that he
or she is entitled to a benefit under the Plan, the Claimant
may submit a signed, written application to the Committee or
its delegate within 90 days of having been denied such a
benefit. The Claimant will generally be notified of the
approval or denial of this application within 90 days (180
days in unusual circumstances) of the date that the Committee
or its delegate receives the application. If the claim is
denied, the notification will state specific reasons for the
denial and the Claimant will have 60 days to file a signed,
written request for a review of the denial with the Committee
or its delegate. This request will include the reasons for
requesting a review, facts supporting the request and any other
relevant comments. The Committee or its delegate, operating
pursuant to its discretionary authority to administer and
interpret the Plan and to determine eligibility for benefits
under the terms of the Plan, will generally make a final,
written determination of the Claimant's eligibility for
benefits within 60 days (120 days in unusual circumstances)
of receipt of the request for review.
ARTICLE XIV
ALIENATION AND QUALIFIED DOMESTIC RELATIONS ORDERS
14.01 Prohibition. Plan benefits may not be assigned or
alienated and will not be subject to the claims of creditors.
The Plan will, however, honor properly executed federal tax
levies, executions on federal tax judgments, Qualified Domestic
Relations Orders within the meaning of Code Section 414(p), a
direction to pay third parties pursuant to Regulation
1.401(a)-13(e), and the provisions of this Plan regarding
loans and distributions to minors and incompetent persons.
14.02 Qualified Domestic Relations Order. A distribution to
an Alternate Payee authorized by a Qualified Domestic Relations
Order may be made even if the affected Participant would not be
eligible to receive a similar distribution from the Plan at
that time. The Committee has full discretionary authority to
determine whether a domestic relations order is "Qualified"
within the meaning of Code Section 414(p). Rights and
benefits provided to a Participant or Beneficiary are subject
to the rights and benefits of an Alternate Payee under a
Qualified Domestic Relations Order.
ARTICLE XV
ADMINISTRATION
15.01 Committee. The Directors may appoint a Committee to
administer the Plan. The Committee will hold office at the
pleasure of the Directors and will be a named fiduciary of
the Plan. To the extent that the Directors have not
appointed a Committee, the term Committee, as used in this
Article, shall be deemed to refer to the Company.
15.02 Power. The Committee has full discretionary
authority to administer and interpret the Plan, including
discretionary authority to determine eligibility for
participation and for benefits under the Plan, to appoint
one or more investment managers, to correct errors, and to
construe ambiguous terms. The Committee may delegate its
discretionary authority and such duties and responsibilities
as it deems appropriate to facilitate the day-to-day
administration of the Plan and, unless the Committee
provides otherwise, such a delegation will carry with it
the fully discretionary authority to accomplish the
delegation. Determinations by the Committee or the its
delegate will be final and conclusive upon all persons.
15.03 Indemnification. The Participating Companies will
indemnify and hold harmless the Directors, the members of the
Committee, and any Employees, from and against any and all
liabilities, claims, costs and expenses, including attorneys'
fees, arising out of an alleged breach in the performance of
their fiduciary duties under the Plan and under ERISA, other
than such liabilities, claims, costs and expenses as may
result from the gross negligence or willful misconduct of
such persons. The Participating Companies shall have the
right, but not the obligation, to conduct the defense of such
persons in any proceeding to which this Section applies.
15.04 Expenses. All proper expenses incurred in
administering the Plan will be paid from the Trust if not paid
by the Participating Companies. If expenses are initially
paid by a Participating Company, the Participating Company
may be reimbursed from the Trust. Committee members will
receive no compensation for their services in administering
the Plan.
15.05 Allocation of Responsibility. Except to the extent
provided in Section 405 of ERISA, no fiduciary shall have any
liability for a breach of fiduciary responsibility of another
fiduciary with respect to the Plan and Trust.
ARTICLE XVI
AMENDMENTS
The Directors, by written action, may amend the Plan
(prospectively or retroactively). The Directors may delegate
this authority to a committee of Directors. Upon adoption,
the amendment will become effective in accordance with its
terms. Except as provided elsewhere in this Plan, no amendment
will (a) cause Plan assets to revert to a Participating
Company or to be used for purposes other than the exclusive
benefit of Participants and Beneficiaries and payment of
reasonable expenses, (b) deprive any Participant of a benefit
already accrued, or (c) change the duties or liabilities of a
Trustee without consent of the Trustee.
ARTICLE XVII
TERMINATION, MERGER AND TRANSFER
17.01 Participating Companies. A Participating Company may,
in its sole discretion, by written action of its board of
directors or by a committee appointed by its board of
directors, discontinue contributions to or terminate the Plan,
in whole or in part, at any time with respect to its own
Employees.
17.02 Company. The Directors reserve the right to terminate
the Plan, at any time, in their sole and absolute discretion
by written action. The Directors may delegate this authority
to a committee of Directors. If the Plan is terminated with
respect to all Participating Companies, the Trustees will
pay to each Participant affected by the termination, or that
Participant's Beneficiary, within a reasonable time, the net
value of the Participant's Account in accordance with the
written directions of the Committee; provided that, if
termination of the Plan does not constitute a distribution
event within the meaning of the requirements of Code Section
401(k), the Participants' Salary Deferral Contributions Account,
Cash-or-Deferred Value Sharing Bonus Deferral Account, Matching
Contributions Account, and Special Contributions Account will
continue to be held in trust for subsequent distribution in
accordance with the applicable requirements.
17.03 Determination of Partial Termination. A partial
termination of the Plan will not be deemed to occur solely by
reason of the sale or transfer of all or substantially all of
the assets of a Participating Company, but will be deemed to
occur only if there is a determination, either made or agreed
to by the Committee, or made by the Internal Revenue Service
and upheld by a decision of a court of last resort, that a
particular event or transaction constitutes a partial
termination within the meaning of Code Section 411(d)(3)(A).
17.04 Mergers and Transfers. This Plan may be merged or
consolidated with another tax-qualified retirement Plan and
assets and liabilities may be transferred from this Plan to
any other retirement plan qualified under Section 401 of the
Code if each Participant is entitled to receive from this
Plan, or from the surviving or transferee plan, immediately
after the merger, consolidation or transfer, a benefit equal
to or greater than the benefit the Participant would have
been entitled to receive under this Plan if this Plan had
been terminated immediately before the merger,
consolidation or transfer.
ARTICLE XVIII
MISCELLANEOUS
18.01 Limitation of Rights. Participation in this Plan
will not give to any Employee the right to be retained in the
employ of an Affiliated Company, nor any right or interest
in this Plan other than as provided in this Plan document.
18.02 Satisfaction of Claims. Any payment to (or on
behalf of) a Participant, the Participant's legal representative
or Beneficiary, in accordance with the terms of this Plan
will, to the extent thereof, be in full satisfaction of all
claims that person may have against the Trust, the Plan,
each Trustee, the Committee and all Participating Companies,
any of whom may require the recipient, as a condition
precedent to such payment, to execute a receipt and release
therefor in such form as shall be determined by the Trustee,
the Committee or a Participating Company, as the case may
be. The Participating Companies do not guarantee the Trust,
the Participants, or their Beneficiaries against loss of or
depreciation in value of any right or benefit that any of
them may acquire under this Plan.
18.03 Construction. Although contributions made by the
Participating Companies are not limited to profits, the Plan
is intended to be a profit sharing plan. The Plan is to be
construed and administered in accordance with ERISA and other
pertinent federal laws and in accordance with the laws of
the State of California to the extent not preempted by
ERISA; provided, however, that if any provision is
susceptible of more than one interpretation, such
interpretation shall be given thereto as is consistent
with the intent that this Plan and its related Trusts be
exempt from federal income tax under Code Sections 401(a)
and 501(a), respectively. The headings and subheadings of
this instrument are inserted for convenience of reference
only and are not to be considered in the construction
of this Plan.
18.04 Severability. If a provision of this Plan is held by
a court of competent jurisdiction to be invalid or
unenforceable, the remaining provisions of the Plan will
remain fully effective.
18.05 Source of Benefits. All benefits payable under the
Plan shall be paid and provided for solely from the Trust,
and the Participating Companies assume no liability or
responsibility therefor.
18.06 Transition Provisions. A Plan provision that refers
to this Section 18.06 will not apply to Employees whose
employment is governed by the terms of a collective
bargaining agreement unless and to the extent that a
Participating Company or its delegate enters into a written
agreement with the relevant union to provide for the
applicability of that provision. To the extent that a Plan
provision is governed by this Section 18.06 and to the
extent that no such written agreement has been entered into,
the affected Employee will receive under this Plan the
benefits, if any, that he or she would have received if
The Clorox Company Profit Sharing Plan and The Clorox Company
Tax Reduction Investment Plan as in effect on December 31,
1995 had remained in effect.
IN WITNESS WHEREOF, the Company has caused this Plan to
be executed this day of , 1996.
THE CLOROX COMPANY
By:
------------------------
<PAGE>
APPENDIX I: HIGHLY COMPENSATED EMPLOYEE
1.01 Definition. Highly Compensated Employee means,
with respect to a Plan Year ("current year"), an Employee
who, during the Plan Year or the preceding 12-month
period: was a 5% owner within the meaning of Code Section
416(i)(1)(B)(i), received Remuneration from all Affiliated
Companies in excess of $75,000 (or a greater amount permitted
under Code Section 414(q)(1)), received Remuneration from all
Affiliated Companies in excess of $50,000 (or a greater amount
permitted under Code Section 414(q)(1)) and was among the top
20% of Employees when ranked on the basis of Remuneration
paid during that year, or was at any time an officer and
received Remuneration greater than 50% of the dollar limit
under Code Section 415(b)(1)(A) for that year or (if no
officer received such Remuneration), the officer who received
the most Remuneration.
1.02 Top 100. For the current year, no Employee (other than
a 5% owner) who was not a Highly Compensated Employee in the
preceding year will be a Highly Compensated Employee unless
the Employee is among the 100 Employees paid the greatest
Remuneration by all Affiliated Companies in the current year.
1.03 Family. Members of a 5% owner's family, or of the
family of a Highly Compensated Employee who is one of the 10
most Highly Compensated Employees, will be aggregated and
treated as a single Employee, with a single Remuneration,
and a single Plan benefit. "Family," for purposes of the
preceding sentence, includes a Participant's spouse, and the
Participant's lineal ascendant and descendants, and their
spouses.
1.04 Top 20%. When determining the number of Employees in
the top 20% of Employees by Remuneration, the Committee will
exclude Employees who (i) have not completed 6 months of
service, (ii) normally work less than 17-1/2 hours per week,
(iii) normally work during not more than 6 months during any
year, (iv) have not attained age 21, (v) are included in a
unit of employees covered by a collective bargaining
agreement (except to the extent provided in Treasury
Regulations), (vi) are nonresident aliens and receive no
earned income from a Participating Company that constitutes
income from sources within the United States, or (vii)
rendered no services to any Affiliated Company during the year.
1.05 Officers. No more than 50 Employees (or, if less, the
greater of 3 Employees or 10% of the Employees) will be
treated as officers.
1.06 Elections. Notwithstanding anything to the contrary
in this Appendix, in the discretion of the Committee or its
delegate, the determination of Highly Compensated Employees for
any Plan Year will be made using the calendar year calculation
election in Regulation 1.414(q)-3T Q&A 14 and/or using the
simplified method for determining highly compensated
employees contained in Code Section 414(q)(12), and/or using
the snapshot method in IRS Revenue Procedure 95-34, and/or
using the simplified method in IRS Revenue Procedure 93-42.
1.07 Affiliated Companies. This Appendix will be
administered separately with regard to Affiliated Companies
(if any) that are unrelated within the meaning of Code
Section 414.
<PAGE>
APPENDIX II: TESTING 401(K) AND MATCHING CONTRIBUTIONS
1.01 Individual Limit on Elective Deferrals.
(a) Definition. "Elective Deferrals" means contributions
on behalf of a Participant under a qualified cash or deferred
arrangement described in Code Section 402(e)(3), under a
simplified employee pension plan described in Code Section
408(k)(6), and under a salary reduction agreement to purchase
an annuity contract described in Code Section 403(b).
(b) Limit. A Participant's 401(k) Contributions under
the Plan for any calendar year may not exceed the $7,000
(indexed) limit of Code Section 401(a)(30).
(c) Distribution. If a Participant notifies the
Committee or its delegate following the close of the
Participant's taxable year, pursuant to procedures established
by the Committee or its delegate, that the Participant's total
Elective Deferrals for the taxable year exceed the $7,000
(indexed) limit of Code Section 402(g) or if 401(k)
Contributions exceed the amount permitted by Code Section
401(a)(30), the excess, together with income earned on the
excess during the calendar year will be distributed to the
Participant by April 15 following the year in which the
excess contribution was made. Income will be determined
using a method used for allocating income to Participants'
Accounts during the Plan Year and will not include income
earned after the end of the Plan Year.
1.02 Limit on 401(k) Contributions.
(a) Deferral Percentage means, for a group of Eligible
Employees, the average of the ratios (calculated separately
for each individual) of (i) to (ii) where (i) is the 401(k)
Contributions allocated for the Plan Year to the individual,
and (ii) is the Code Section 414(s) compensation of the
individual for the Plan Year. The Deferral Percentage for an
Eligible Employee who does not elect to make 401(k) Contributions
is zero.
(b) Family Member means, with respect to a Participant,
the Participant's spouse, and the Participant's lineal
ascendant and descendants and their spouses.
(c) Family Group means a group of two or more Participants
that includes a 5% owner, as defined in Code Section
416(i)(1)(B)(i), and/or one of the 10 most Highly Compensated
Employees, and one or more of the Participants' Family Members.
(d) $150,000 Limit means that, with respect to this
Appendix, the annual Code Section 414(s) compensation of any
Participant taken into account in any Plan Year will be subject
to the same $150,000 (indexed) limit applied to the Plan's
definition of Compensation.
(e) Tests. 401(k) Contributions must satisfy one of the
following tests:
(i) The Deferral Percentage for Highly Compensated
Employees must not be more than 125% of the Deferral Percentage
for Non-Highly Compensated Employees.
(ii) The Deferral Percentage for Highly Compensated
Employees must not be more than 2 percentage points plus the
Deferral Percentage for Non-Highly Compensated Employees.
(f) Deferral Percentage Test Operational Rules.
(i) Family Groups. To the extent required by law,
a single Deferral Percentage will apply to all members of a
Family Group, and will be the greater of (i) a Deferral
Percentage determined by totalling the amounts credited as
401(k) Contributions to all members of the Family Group who are
Highly Compensated Employees and dividing by the total Code
Section 414(s) compensation received by these members, or
(ii) a Deferral Percentage determined as in (i), but based on
all members of the Family Group.
(ii) Aggregated Plans. If 2 or more plans that
include cash or deferred arrangements are considered a single
plan for purposes of Code Section 401(a)(4) or Code Section 410(b)
(other than for purposes of the average benefits test of Code
Section 410(b)), the cash or deferred arrangements included in
those plans will be treated as a single arrangement.
(iii) Highly Compensated. If an eligible Highly
Compensated Employee is a participant under two or more cash
or deferred arrangements of an Affiliated Employer, for
purposes of determining that Employee's Deferral Percentage,
all such cash or deferred arrangements will be treated as a
single cash or deferred arrangement.
(iv) Disregarded Employees. Any Employee who is
not, at any time during the Plan Year, eligible to authorize a
401(k) Contribution will be disregarded.
(g) Satisfaction of Deferral Percentage Test.
(i) Reduction of Contributions. If, at any time,
the Committee or its delegate determines that the Deferral
Percentage test is not likely to be satisfied, the Committee
or its delegate may reduce the 401(k) Contributions of
Highly Compensated Employees or a Participating Company make
a Special Contribution to the Plan.
(ii) Recalculation. If the Plan does not satisfy
the Deferral Percentage test the Deferral Percentage for the
Highly Compensated Employee with the greatest Deferral
Percentage will be reduced to the extent required to enable
the Plan to satisfy the Deferral Percentage test, or to
cause the Deferral Percentage of the Highly Compensated
Employee with the greatest Deferral Percentage to equal the
Deferral Percentage of the Highly Compensated Employee with
the next greatest Deferral Percentage. The Deferral
Percentages of these Highly Compensated Employees will then
be reduced together and this process will be repeated as
necessary until the Plan satisfies the Deferral Percentage test.
(iii) Recalculation for Family Group. To the extent
required by law, Deferral Percentages of members of a Family
Group will be recalculated pursuant to Regulations applying
Code Section 414(q)(6) to the Code Section 401(k).
(iv) Excess Contributions. A Highly Compensated
Employee's excess contributions are the amount by which the
401(k) Contribution made on behalf of the Highly Compensated
Employee for the Plan Year must be reduced pursuant to the
recalculation provisions of this paragraph (2) for the Plan
to satisfy the Deferral Percentage test. Subject to the
following provisions, excess contributions will be distributed
to the Participant for whom they were contributed.
(v) Adjustments. Distributions of excess
contributions will be adjusted for income and loss using a
method used for allocating income to Participants' Accounts
during the Plan Year and they will be reduced by the excess
deferrals distributed pursuant to Section 1.01 of this
Appendix. Income earned after the end of the Plan Year will
not be distributed. Federal, state or local income tax
withholding obligations attributable to the distribution
may be satisfied out of the distribution. Distributions
of excess contributions will be reduced by distributions of
excess deferrals. Unmatched 401(k) Contributions will be
distributed before matched Salary Deferral Contributions.
If matched 401(k) Contributions must also be distributed,
they will be accompanied by the forfeiture of a proportionate
share of Matching Contributions.
(vi) Timing. Excess contributions for a Plan Year
will be distributed no later than the last day of the Plan
Year immediately following the Plan Year for which the
contributions were made.
1.03 Limit on Matching Contributions. Matching Contributions
will be tested like 401(k) Contributions under the Limit on
Salary Deferral Contributions provisions outlined above.
In addition, 401(k) Contributions and Matching Contributions
may be tested under the rules in Regulation 1.401(m)-2.
1.04 Affiliated Companies. All of this Appendix except
Section 1.01 will be administered separately with regard to
Affiliated Companies (if any) that are unrelated within the
meaning of Code Section 414 and with regard to separate
lines of business, if any, within the meaning of Code Section
414.
1.05 Collective Bargaining Units. The Deferral Percentage
Test and any corrective action resulting from that test will
be applied separately to Employees who are eligible to
participate in the Plan as a result of a collective
bargaining agreement ("CB Employees") and CB Employees will be
excluded from the Limit on Matching Contributions testing
referred to above. In the discretion of the Committee or its
delegate, for purposes of this Appendix, CB Employees may be
grouped based on the collective bargaining agreement that
governs the terms of their employment or all CB employees
may be treated as a single group.
<PAGE>
APPENDIX III: LIMITATIONS ON ALLOCATIONS
1.01 Allocation Limitation Definitions. For purposes of
this Appendix, the following definitions apply:
(a) "Annual Additions" shall mean for any Limitation
Year the sum of the following amounts credited to a
Participant's accounts in all qualified defined contribution
plans maintained by an Employer: (i) Employer contributions,
(ii) employee contributions, and (iii) forfeitures. In
addition, amounts allocated to an individual medical account,
as defined in Code Section 415(1)(2), which are part of a
defined benefit plan maintained by an Employer, and amounts
which are attributable to post-retirement medical benefits
allocated to the separate account of a key employee, as defined
in Section 419A(d)(3) of the Code, under a welfare benefit
fund, as defined in Section 419(e) of the Code, maintained by
an Employer, also shall be treated as Annual Additions.
(b) "Employer" includes a corporation which is a member
of a controlled group of corporations or a trade or business
which is under common control as defined in Section 414(b) or
(c) of the Code (as modified by Section 415(h)); a service
organization which is a member of an affiliated service group
which includes an Employer adopting this Plan, as defined in
Section 414(m) of the Code; a leasing organization with
respect to which an Employer adopting this Plan is a "recipient"
within the meaning of Section 414(n) of the Code; and any other
entity required to be aggregated with an Employer pursuant to
regulations under Section 414(o) of the Code.
(c) "Defined Benefit Fraction" shall mean a fraction,
the numerator of which is the Projected Annual Benefit of the
Participant under all defined benefit plans maintained by an
Employer (determined as of the close of the Limitation Year)
and the denominator of which is the lesser of:
(i) the product of 1.25 multiplied by the maximum
dollar limitation under Section 415(b)(1)(A) of the Code, as
adjusted in accordance with regulations issued by the Secretary
of the Treasury, or
(ii) the product of 1.4 multiplied by an amount
which is 100% of the Participant's average Remuneration for
the three consecutive calendar years while he was a Participant
in the plan in which his Remuneration was the highest.
A Participant's "Projected Annual Benefit" is the annual benefit
(as defined in Treasury Regulation Section 1.415-3(b)(1)(i))
a Participant would receive if he continued employment,
receiving his current Remuneration in each Limitation Year,
until the later of age 65 or the Participant's current age, and
if all relevant factors used to determine benefits under the
Plan for the current Limitation Year remained constant for
all future Limitation Years.
(d) "Defined Contribution Fraction" shall mean a
fraction, the numerator of which is the sum of the Annual
Additions to the accounts of the Participant in all defined
contribution plans (as defined in Section 414(i) of the Code)
maintained by an Employer (as of the end of the Limitation
Year), and the denominator of which is the sum of the lesser
of the following amounts determined for such Limitation Year
and for each prior year of service with the Employer:
(i) the product of 1.25 multiplied by the maximum
dollar limitation for a defined contribution plan under
Section 415(c)(1)(A) of the Code (determined without regard to
Section 415(c)(6) of the Code), as adjusted in accordance with
regulations issued by the Secretary of the Treasury, or
(ii) the product of 1.4 multiplied by an amount
equal to 25% of the Participant's Remuneration.
(e) The Company may elect that for purposes of
determining the Defined Contribution Fraction, above, for any
Limitation Year ending after December 31, 1982, the denominator
for each Participant for Limitation Years ending before
January 1, 1983, shall be an amount equal to the product of
(i) and (ii), below:
(i) The amount determined as the denominator of
the defined contribution plan fraction under the provisions of
Section 415 of the Code, which provisions were in effect for
the Limitation Year ending in 1982, and which amount is
determined in accordance with paragraph (d), above, for the
year ending in 1982, multiplied by
(ii) A fraction in which the numerator is the lesser
of (A) $51,875, or (B) 1.4 multiplied by 25% of the Participant's
Remuneration for the Limitation Year ending in 1981, and the
denominator is the lesser of (C) $41,500 or (D) 25% of the
Participant's Remuneration for the Limitation Year ending
in 1981.
(f) "Limitation Year" shall mean the Fiscal Year.
1.02 General Rule. Notwithstanding anything to the contrary
contained in this Plan, the Annual Additions to a Participant's
Account for any Plan Year shall not exceed the lesser of
$30,000 or 25% of the Participant's Remuneration for the
Plan Year.
1.03 Excess Annual Additions. If the Annual Additions to a
Participant's Account would exceed the limitation described
in Section 1.02, the Participant's 401(k) Contributions
(plus earnings) for the Limitation Year in which the excess
Annual Additions arise shall be reduced and distributed to
Participants in order that the limitation set forth in
Section 1.02 shall be met. If after such reduction, the
Annual Additions to a Participant's Account still exceed the
limitation described in Section 1.02, the Participant's
Matching Contributions and then the Participant's Value
Sharing Contributions for the Limitation Year in which the
excess Annual Additions arise shall be reduced in order
that the limitations set forth in Section 1.02 shall be met.
The excess Annual Additions reduced shall be credited to a
suspense account and shall be used to reduce Employer
contributions to the Plan on behalf of all Participants in
the next Plan Year and in succeeding Plan Years, as necessary.
Excess amounts, while retained in a suspense account, shall
not participate in the allocation of investment gains and
losses until reapplied to the Participants Accounts and shall
not be distributed to Participants. In the event of termination
of the Plan, the suspense account shall revert to the Company
to the extent that it may not then be allocated to any
Participant's Account. Notwithstanding anything in the Plan
to the contrary, an Employer shall not knowingly contribute
any amount that would cause an allocation to a suspense
account as of the date the contribution is allocated.
1.04 Participation in Defined Benefit Plan. If a Participant
is also a participant in any defined benefit plan (as defined
in Section 414(j) of the Code) maintained by an Employer, then
in addition to the limitation contained in Section 1.02, the sum
of (i) the Defined Benefit Fraction and (ii) the Defined
Contribution Fraction with respect to such Participant shall
not exceed 1.0. If the limitation of this Section 1.04 is
exceeded, the Participant's benefit under the defined benefit
plan shall be reduced in order to satisfy such limitation.
1.05 Aggregation of Plans. For purposes of this Appendix, all
defined contribution plans of an Employer (whether or not
terminated) shall be treated as one defined contribution plan,
and all defined benefit plans of an Employer (whether or not
terminated) shall be treated as one defined benefit plan of
an Employer.
<PAGE>
APPENDIX IV: TOP HEAVY PROVISIONS
1.01 Definitions. For purposes of this Appendix:
(a) "Company" includes all employers aggregated under
Sections 414(b), (c) and (m) of the Code.
(b) "Determination Date" shall mean, in the case of the
first Plan Year, the last day of such Plan Year, or, in the
case of any other Plan Year, the last day of the preceding
Plan Year. When more than one plan is aggregated, the
determination of whether the plans are Top-Heavy shall be made
at a time consistent with regulations issued by the Secretary
of the Treasury.
(c) "Key Employee" shall mean an Employee or former
Employee and his or her Beneficiaries who, within the meaning
of Section 416(i) of the Code and the regulations thereunder,
is or at any time during the 4 preceding Plan Years has been:
(i) An officer of the Company whose annual
Remuneration exceeds 150% of the amount in effect under
Section 415(b)(1)(A) of the Code for any such Plan Year;
(ii) One of the 10 Employees whose annual
Remuneration from the Company exceeds the limitation in
effect under Section 415(c)(1)(A) and who owns or is considered
as owning more than a 1/2% ownership interest and one of the
10 largest percentage ownership interests in the Company;
(iii) A 5% owner of the Company; or
(iv) A 1% owner of the Company having an annual
Remuneration of more than $150,000.
For purposes of this definition, no more than 50 employees
(or, if less than 50, either 3 employees or 10% of all
employees, whichever is greater) shall be treated as officers.
For purposes of determining the number of officers taken into
account, employees described in Section 414(q)(8) of the Code
shall be excluded. In addition, for purposes of determining
ownership percentages hereunder, the constructive ownership
rules of Section 318 of the Code shall apply as provided by
Section 416(i)(1)(B) of the Code. For purposes of paragraph
(ii) above, if 2 Employees have the same interest in the
Company, the Employee having greater annual compensation from
the Company shall be treated as having a larger interest.
(d) "Non-Key Employee" shall mean any Employee who is
not a Key Employee.
(e) "Permissive Aggregation Group" shall mean any other
plans which the Company, in its discretion, elects to aggregate
with the Required Aggregation Group, provided that the
resulting group of plans satisfies Sections 401(a)(4) and 410
of the Code.
(f) "Required Aggregation Group" shall mean (i) each
plan of the Company in which a Key Employee participates
(regardless of whether the Plan has terminated), and (ii) each
other plan of the Company which enables any plan described in
clause (i), above, to meet the requirements of Section 401(a)(4)
or 410 of the Code.
(g) "Top-Heavy" shall mean a plan in which, as of the
Determination Date, the Top-Heavy Ratio exceeds 60%. The
determination of whether a plan is Top-Heavy shall be made in
accordance with Section 416(g) of the Code.
(h) "Top-Heavy Ratio" shall mean for this Plan or the
Required Aggregation Group or Permissive Aggregation Group, as
applicable, the fraction, the numerator of which is the sum of
the account balances under the aggregated defined contribution
plans of all Key Employees as of the Determination Date
(including any part of any account balance distributed in the
5-year period ending on the Determination Date) and the present
value of accrued benefits (including any part of any accrued
benefit distributed in the 5-year period ending on the
Determination Date) under the aggregated defined benefit plans
of all Key Employees as of the Determination Date, and the
denominator of which is the sum of all account balances
(including any part of any account balance distributed in the
5-year period ending on the Determination Date) under the
aggregated defined contribution plans for all Participants and
the present value of accrued benefits under the defined benefit
plans (including any part of any accrued benefit distributed
in the 5-year period ending on the Determination Date) for all
Participants as of the Determination Date, determined in
accordance with Section 416 of the Code and the regulations
thereunder. The accrued benefit of a Participant other than
a Key Employee shall be determined under (a) the method, if any,
that uniformly applies for accrual purposes under all defined
benefit plans maintained by the Company, or (b) if no such
method exists, as if such benefit accrued not more rapidly
than the slowest accrual rate permitted under the fractional
rule of Section 411(b)(1)(C) of the Code.
1.02 General Rule. Notwithstanding anything in this Plan
to the contrary, the provisions of this Appendix will apply in
the event that the Plan is determined to be Top-Heavy.
1.03 Minimum Contribution Requirement.
(a) Notwithstanding anything in this Plan to the
contrary, and subject to the limitations set forth in paragraph
(b) below, in any Plan Year in which the Plan is Top-Heavy, the
Company shall contribute an additional amount so as to provide
allocations for each Non-Key Employee who is employed on the
last day of the Plan Year (whether or not such Non-Key Employee
is otherwise a Participant) of Employer contributions under
this Plan which equal 3% of the Participant's Remuneration
provided, however, that if the Participant also participates
in a defined benefit plan maintained by an Employer, the
Participant shall receive, in lieu of such contribution, the
minimum Top-Heavy benefit under the defined benefit plan.
(b) No minimum contribution will be required for a
Participant under this Plan for any Plan Year if the Company
maintains another qualified plan under which a minimum benefit
or contribution is being accrued or made for such Participant
in accordance with Section 416(c) of the Code.
1.04 Minimum Vesting Requirements. In each Plan Year in
which the Plan is Top-Heavy, a Participant's nonforfeitable
interest shall be determined under a schedule which is not less
favorable than the following schedule:
If Years of Service Percentage of
Equal Account Vested
2 20%
3 34%
4 66%
5 100%
Any change in the Plan's vesting schedule resulting from a change
in the Plan's Top-Heavy status shall be made in accordance with
Article VIII of the Plan.
1.05 Adjustments to Limitations on Contributions and
Benefits. If the Plan becomes Top-Heavy, (a) Sections 415(d)(2)(B)
and (e)(3)(B) of the Code shall be applied by substituting
"1.0" for "1.25"; and (b) Section 415(d)(6)(B)(i) of the Code
shall be applied by substituting "$41,500" for "$51,875."
<PAGE>
APPENDIX V: DISTRIBUTION PROVISIONS
The information contained in this Appendix is consistent
with the Plan's distribution provisions, and is generally
required by law to be explicitly stated in the Plan.
1.01 Incorporation by Reference of 401(a)(9) Regulations.
Effective January 1, 1985, distributions will be made in
accordance with the Regulations under Code Section 401(a)(9),
including the minimum distribution incidental benefit
requirement of Code Section 401(a)(9)(G).
1.02 Installment Distributions. Once a Participant has
attained age 70-1/2, the amount of the installments
distributed each calendar year must be at least an amount
("401(a)(9) amount") equal to the quotient obtained by
dividing the Participant's entire interest in the Plan by
the life expectancy of the Participant. Life expectancies
will not be recalculated. To the extent that the minimum
distribution requirements under Code Section 401(a)(9) are
not satisfied for a given calendar year, an Employee will
receive installments distributed each calendar year that
are in an amount at least equal to the Employee's 401(a)(9)
amount. Such an Employee will have a new Annuity Starting
Date upon the occurrence of a standard distribution event
under this Plan (e.g., the Employee's termination of
employment or the termination of the Plan), and that
Employee's subsequent Plan benefits will be redetermined
to reflect prior benefit payments.
1.03 401(a)(9) Deferral Limitations for Participants.
Notwithstanding anything to the contrary in this Plan, a
Participant may not defer commencement of his or her benefits
past his or her required beginning date. A Participant's
required beginning date is April 1 of the calendar year
following the calendar year in which the Participant attains
age 70-1/2, or an earlier date on which payments have
irrevocably begun as an annuity, unless the Participant
satisfies one of the following conditions:
(a) Age 70-1/2 before 1988. If a Participant is not
a 5% owner of an Affiliated Company, the Participant attained
age 70-1/2 before January 1, 1988, and the Participant is
still employed by an Affiliated Company, the Participant's
required beginning date will be the date that he or she
separates from service with an Affiliated Company.
(b) Age 70-1/2 in 1988. If a Participant is not a
5% owner of an Affiliated Company, the Participant attained
age 70-1/2 in 1988, and the Participant is still employed by
an Affiliated Company, the Participant's required beginning
date will be April 1, 1990.
1.04 401(a)(9) Deferral Limitations for Beneficiaries.
(a) Death After Required Beginning Date. If a
Participant dies after the Participant's required beginning
date, the remaining portion of that Participant's Account
will continue to be distributed at least as rapidly as
under the method of distribution in effect before the
Participant's death.
(b) Death Before Required Beginning Date. If the
Participant dies before the Participant's required beginning
date, distribution of the Participant's entire Account shall
be completed by December 31 of the calendar year containing
the fifth anniversary of the Participant's death, except to
the extent that an election is made in accordance with the
following paragraphs:
(1) Designated Beneficiary. If any portion of
the Participant's Account is payable to a designated
Beneficiary, distributions may be made for a period certain
not greater than the life expectancy of the designated
Beneficiary commencing on or before December 31 of the
calendar year immediately following the calendar year in
which the Participant died.
(2) Surviving Spouse. If the designated
Beneficiary is the Participant's surviving spouse, the date
that distributions payable for a period certain not greater
than the life expectancy of the Participant's surviving
spouse are required to begin to the Participant's surviving
spouse shall not be earlier than the later of December 31
of the calendar year immediately following the calendar year
in which the Participant died, and December 31 of the calendar
year in which the Participant would have attained age 70-1/2.
(3) Death of Spouse. If the surviving spouse
dies after the Participant, but before payments to the
spouse begin, the provisions of this subsection, with the
exception of paragraph (2), shall be applied as if the
surviving spouse were the Participant.
1.05 TEFRA 242(b) Election. If a Participant made a
written election, prior to January 1, 1984, to defer
commencement of his or her distribution in a manner
consistent with the Tax Equity and Fiscal Responsibility
Act of 1982, such an election will be honored.
1.06 Timing. Subject to Regulation 1.411(a)-11(c)(7) and
the provisions of this Plan, benefits of a former Participant
shall become payable no later than 60 days after the last to
occur of (a) the last day of the Plan Year in which the
Participant attains age 65, (b) the last day of the Plan Year
in which the Participant separates from employment with the
Company, or (c) the 10th anniversary of the last day of the
Plan Year in which the Participant commenced participation
in the Plan.
1.07 Normal Retirement Date means the first day of the
month coinciding with or next following a Participant's
attainment of age 65 ("Normal Retirement Age").
<PAGE>
APPENDIX VI: ADDITIONAL RULES FOR PUERTO RICAN PARTICIPANTS
1.01 Purpose and Effect. The purpose of this Appendix
is to permit the Plan to comply with the requirements of
Sections 1165 (a) and (e) of the Puerto Rico Internal
Revenue Code of 1994 as amended ("PR-Code"). The provisions
of this Appendix apply only to those Employees of
Participating Companies whose Compensation is subject to
Puerto Rico Income Tax (each a "Puerto Rico Participant").
1.02 Type of Plan. It is the intent of the Company that
the Plan be a profit sharing plan as defined in Article 1165-1
of the proposed Puerto Rico Income Tax Regulations and that it
include a qualified cash or deferred arrangement pursuant to
Section 1165(e) of the PR-Code.
1.03 Puerto Rico Participant's Salary Deferral
Contributions and Cash-or-Deferred Value Sharing Bonus
Deferrals. In general, Puerto Rico Participants' Salary
Deferral Contributions and Cash-or-Deferred Value Sharing
Bonus Deferrals under the Plan may not exceed the lesser of
10% of the Puerto Rico Participant's Compensation or $7,500
or such greater amount permitted by applicable Puerto Rican
law; provided that such amount shall not exceed the amount
set forth in Section 402(g) of the Code. This limit will be
applied by aggregating all PR-Code Section 1165 retirement
plans that are maintained by an Affiliated Company and that
provide for elective deferrals.
1.04 Highly Compensated Puerto Rico Participant. Any
Puerto Rico Participant who, determined on the basis of
Remuneration for each Plan Year, has greater Remuneration
than two-thirds of all other Puerto Rico Participants will
be considered a Highly Compensated Puerto Rico Participant.
1.05 Limitations on Puerto Rico Participants Salary
Deferral Contributions and Cash-or-Deferred Value Sharing
Bonus Deferrals. For each Plan Year, in addition to
satisfying the actual deferral percentage test of Code
Section 401(k), the Plan will satisfy the average deferral
percentage test of Section 1165(e)(3) of the PR-Code and the
regulations thereunder. In no event will the actual
deferral percentage of the Highly Compensated Puerto Rico
Participants for any calendar year exceed the greater of:
(a) The actual deferral percentage of all other
Puerto Rico Participants for the calendar year multiplied by
1.25; or
(b) The actual deferral percentage of all other
Puerto Rico Participants for such calendar year multiplied
by 2.0; provided that the actual deferral percentage of
Highly Compensated Puerto Rico Participants does not exceed
that of all other Puerto Rico Participants by more that two
percentage points.
The "actual deferral percentage" of a group of Puerto Rico
Participants for a Plan Year will be the average of the ratios,
calculated separately for each Puerto Rico Participant in
such group of the amount of Salary Deferral Contributions and
Cash-or-Deferred Value Sharing Bonus Deferrals actually paid
to the Trust on behalf of such Puerto Rico Participants for
such Plan Year to the Remuneration of such Puerto Rico
Participants for such Plan Year.
1.06 Rollover Contributions. A rollover contribution
means a contribution to the Plan of the total amount paid
or distributed by a qualified trust to a Puerto Rico
Participant, if made in a manner which would constitute a
Rollover Contribution as defined in the Plan and in Section
1165(b)(2) of the PR-Code.
1.07 Use of Terms. All terms and provisions of the Plan
shall apply to this Appendix, except where the terms and
provisions of the Plan and this Appendix conflict, the
terms and provisions of this Appendix shall govern.
