<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1995
Registration number 33-52465
A. Full title of the plan:
THE GILLETTE COMPANY
GLOBAL EMPLOYEE STOCK OWNERSHIP PLAN
B. Name of the issuer of the securities held pursuant to the plan and the
address of its principal executive office:
The Gillette Company
Prudential Tower Building
Boston, MA 02199
Financial Statements of The Gillette Company
Global Employee Stock Ownership Plan
The following audited financial statements are enclosed with this report:
Statement of Net Assets Available for Plan Benefits as of December 31, 1995.
Statement of Changes in Net Assets Available for Plan Benefits for the Period
from January 1, 1995 to December 31, 1995.
Exhibits
23.1 Independent Auditors' Report
23.2 Independent Auditors' Consent
<PAGE> 2
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Administrative Committee of The Gillette Company Global Employee Stock Ownership
Plan has caused this annual report to be signed on its behalf by the undersigned
hereunto duly authorized.
The Gillette Company Global
Employee Stock Ownership Plan
BY ROBERT E. DICENSO
Robert E. DiCenso
Date: March 29, 1996
<PAGE> 3
<TABLE>
THE GILLETTE COMPANY
GLOBAL EMPLOYEE STOCK OWNERSHIP PLAN
Statements of Net Assets Available for Plan Benefits
December 31, 1995 and 1994
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Assets:
The Gillette Company common stock, at market value $7,659,298 1,526,887
Cash 733 248
Employee contributions receivable 454,240 212,119
Employer contributions receivable 137,699 64,997
---------- ---------
Net assets available for plan benefits $8,251,970 1,804,251
========== =========
</TABLE>
See accompanying notes to financial statements.
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<TABLE>
THE GILLETTE COMPANY
GLOBAL EMPLOYEE STOCK OWNERSHIP PLAN
Statements of Changes in Net Assets Available for Plan Benefits
Year ended December 31, 1995 and seven months ended December 31, 1994
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Additions to net assets attributed to:
Investment income:
Dividends on The Gillette Company common stock $ 42,515 3,178
Realized gains on investments sold 45,023 378
Change in unrealized appreciation in the market value of
investments 1,349,268 67,414
---------- ---------
1,436,806 70,970
---------- ---------
Contributions:
Employee 4,044,450 1,339,168
Employer 1,218,085 400,468
---------- ---------
5,262,535 1,739,636
---------- ---------
Total additions 6,699,341 1,810,606
Deductions from net assets attributed to:
Benefit payments 251,622 6,355
---------- ---------
Net increase 6,447,719 1,804,251
Net assets available for plan benefits:
Beginning of period 1,804,251 -
---------- ---------
End of period $8,251,970 1,804,251
========== =========
</TABLE>
See accompanying notes to financial statements.
<PAGE> 5
THE GILLETTE COMPANY
GLOBAL EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1995 and 1994
(1) DESCRIPTION OF THE PLAN
The Gillette Company Global Employee Stock Ownership Plan (the "Plan") is a
defined contribution plan sponsored by The Gillette Company (the "Company"). The
following provides only general information. Participants should refer to the
Plan document for a more complete description of the Plan's provisions.
General
The Plan was adopted by the Board of Directors of the Company on December
16, 1993 to become effective June 1, 1994. Its goal is to provide eligible
Gillette employees the opportunity to purchase common stock of the Company
through payroll deduction and Company contributions. All Plan assets are held by
the Plan Fiduciary, Banque Internationale a Luxembourg (the "Fiduciary"). Buck
Consultants is the record keeper for the Plan.
Eligibility
Employees eligible to participate in the Plan include all regular employees
of participating subsidiaries of the Company with the exception of employees
considered to be an executive officer, director, or 10% shareholder of the
Company and employees eligible for a savings plan maintained in the United
States, Canada, or Puerto Rico. Eligible employees may enroll in the Plan on the
first day of each calendar quarter and on the initial participation date for
each participating subsidiary.
Contributions
Eligible employees may contribute 2% to 10% of their compensation to the
Plan through payroll deductions. A participating employee may change the
contribution rate once each calendar quarter.
Employer contributions are made to the accounts of participants who are
contributing to the Plan in amounts equal to 1% of each participant's eligible
pay.
Investments
All employee and employer contributions are converted into U.S. dollars and
then invested in shares of the Company stock generally on the 15th day of each
month (or if that date is not a business day, the next preceding business day).
Sales of Company stock are made generally on the last business day of each month
and subsequently converted into the applicable local currencies to pay Plan
benefits. Any dividends on shares of the Company stock are invested in
additional shares of the Company stock.
Vesting
Participants are immediately vested in all shares of Company stock credited
to their respective Plan accounts.
(Continued)
<PAGE> 6
2
THE GILLETTE COMPANY
GLOBAL EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
Benefit Payments
Distributions of account balances will be made when the employment of a
participant ceases unless upon retirement the participant's account is credited
with at least 100 shares of Company stock and the participant elects to defer
payment. If an election is made to defer the distribution, retirees may make up
to two requests a year for distributions of all or a portion of their account
balance.
For those retirees who do not elect to defer payment and for all other
participants who terminate employment for reasons other than retirement, a
distribution of Plan benefits is made in the form of a lump sum payment.
All distributions are made in cash, unless the participant elects to
receive the benefit payment in the form of shares of the Company common stock;
however, in the event of a participant or retiree's death, all distributions
will be made in the form of a lump sum cash payment.
While employed, participants may elect to take up to two in-service
withdrawals from their account balances during a calendar year. Shares purchased
with Company contributions and dividends thereon are not eligible for in-service
withdrawal until 24 months from their date of purchase.
Plan Expenses
Brokerage commissions, fees and other security transaction costs are paid
by participants as part of the purchase and sale of Company Stock.
All contributions and cash dividends awaiting investment are held in an
interest bearing account maintained by the Plan Fiduciary. Any interest earned
on the account is used to pay administrative expenses of the Plan. Any remaining
costs of administering the Plan are allocated and paid by the Company
subsidiaries participating in the Plan.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements are presented on the accrual basis of
accounting.
Investments
Investments in the Company common stock are stated at market value, based
on the composite closing price of the stock on the New York Stock Exchange as
reported by Reuters. Purchases and sales of the Company's common stock are
recorded on the trade date (the date the order to buy or sell is executed).
Dividend income is recorded on the ex-dividend date net of any U.S.
withholding taxes. Realized gains and losses are based upon the identified cost
method.
(Continued)
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3
THE GILLETTE COMPANY
GLOBAL EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
Cash
Amounts shown as cash are foreign cash balances held by the Fiduciary that
are to be invested in Company stock in the following month. The balances have
been translated into U.S. dollars using the effective exchange rates as of
December 31, 1995 and 1994.
Contributions Receivable
Contributions held at the participating subsidiaries and pending transfer
to the Fiduciary have been translated into U.S. dollars using the effective
exchange rates as of December 31, 1995 and 1994.
<TABLE>
(3) INVESTMENT IN GILLETTE COMPANY COMMON STOCK
Investments in the Gillette Company common stock held by the Plan at
December 31, 1995 and 1994 were as follows:
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Number of shares 146,941 20,427
Cost $6,242,616 1,459,473
Market Value $7,659,298 1,526,887
</TABLE>
<TABLE>
The realized gains on sales of The Gillette Company common stock were determined
as follows:
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Proceeds on sales of shares $251,172 6,345
Cost 206,149 5,967
-------- -----
$ 45,023 378
======== =====
</TABLE>
(4) PLAN PARTICIPANTS
As of December 31, 1995 the Plan had 3,825 participants employed at Company
subsidiaries located in Germany, the United Kingdom, Switzerland, Austria, New
Zealand, Argentina, Chile, Denmark, Finland, France, Indonesia, Ireland, Mexico,
the Netherlands, Norway, Peru, the Philippines, Poland, Portugal, Singapore,
Spain, Sweden, and Thailand.
(5) PLAN AMENDMENT AND TERMINATION
Although the Company intends to continue the Plan indefinitely, it reserves
the right on behalf of itself and its participating subsidiaries to modify or
terminate the Plan at any time; however, the Plan may not be amended to
adversely affect the rights of participants with respect to shares previously
credited to their accounts.
In the event of termination, the assets held by the Plan Fiduciary may
continue to be held subject to the provisions of the Plan, or at the direction
of the Board of Directors of the Company, the assets of the Plan may be
distributed to the participants.
(Continued)
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4
THE GILLETTE COMPANY
GLOBAL EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
(6) TAX STATUS
The Plan is not qualified under Section 401(a) of the Internal Revenue
Code, and is exempt from the provisions of Title I of ERISA pursuant to Section
4(b)(4) thereof. The Company believes that the Fiduciary should be viewed as a
directed custodian and that, for U.S. tax purposes, the participating employees
should be treated as the owners of the shares of Company stock held for their
account under the Plan.
The Company has applied to the Internal Revenue Service for rulings on the
withholding of U.S. taxes on dividends paid by the Company with respect to the
shares of Company stock held under the Plan and on related matters.
(7) SUBSEQUENT EVENTS
Subsequent to December 31, 1995, the Company's subsidiaries in Ecuador and
Taiwan commenced participation in the Plan.
<PAGE> 1
Exhibit 23.1
Independent Auditors' Report
----------------------------
The Administrative Committee
The Gillette Company Global Employee Stock Ownership Plan:
We have audited the statements of net assets available for plan benefits of The
Gillette Company Global Employee Stock Ownership Plan as of December 31, 1995
and 1994 and the related statements of changes in net assets available for plan
benefits for the year ended December 31, 1995 and the seven months ended
December 31, 1994. These financial statements are the responsibility of the
Plan's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for plan benefits as of December
31, 1995 and 1994 and the changes in net assets available for plan benefits for
the year ended December 31, 1995 and the seven months ended December 31, 1994,
in conformity with generally accepted accounting principles.
KPMG Peat Marwick LLP
March 22, 1996
<PAGE> 1
Exhibit 23.2
Consent of Independent Auditors
The Administrative Committee
The Gillette Company Global Employee Stock Ownership Plan:
We consent to the incorporation by reference in the registration statement No.
33-52465 on Form S-8 of The Gillette Company Global Employee Stock Ownership
Plan of our report dated March 22, 1996, relating to the statements of net
assets available for plan benefits of The Gillette Company Global Employee Stock
Ownership Plan as of December 31, 1995 and 1994 and the related statements of
changes in net assets available for plan benefits for the year ended December
31, 1995 and the seven months ended December 31, 1994, which report appears in
the December 31, 1995 annual report on Form 11-K of The Gillette Company Global
Employee Stock Ownership Plan.
KPMG Peat Marwick LLP
Boston, Massachusetts
March 29, 1996
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