<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [_]
Check the appropriate box:
[_] Preliminary Proxy Statement [_] Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[X] Definitive Additional Materials
[_] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-12
ARMOR ALL PRODUCTS CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
[_] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[_] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which
the filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[_] Fee paid previously with preliminary materials.
[_] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee
was paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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Notes:
<PAGE>
[LOGO OF ARMOR ALL]
ARMOR ALL PRODUCTS CORPORATION
6 LIBERTY
ALISO VIEJO, CA 92656
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 31, 1995
The Annual Meeting of Stockholders of Armor All Products Corporation, a
Delaware corporation (hereinafter called "Armor All" or the "Corporation"),
will be held at 10:00 A.M. on Monday, July 31, 1995 in the Lobby Level
Conference Room at 44 Montgomery Street, San Francisco, California 94104, to
consider and take action upon the election of seven directors, and such other
business as may properly come before the meeting or any adjournment thereof.
Holders of record of the Corporation's Common Stock at the close of business
on June 1, 1995 are entitled to receive notice of and to vote at the meeting.
To assure that your shares will be represented at the meeting, please
complete, sign, date and return the enclosed proxy promptly in the envelope
provided. You may revoke your proxy at any time before it is voted.
By Order of the Board of Directors
/s/ NANCY A. MILLER
Nancy A. Miller
Vice President and Secretary
June 21, 1995
<PAGE>
ARMOR ALL PRODUCTS CORPORATION
6 LIBERTY
ALISO VIEJO, CA 92656
PROXY STATEMENT
This Proxy Statement is being mailed on or about June 21, 1995 to
stockholders of Armor All Products Corporation ("Armor All" or the
"Corporation") in connection with the solicitation of proxies by the Board of
Directors of the Corporation for use at the Annual Meeting of Stockholders to
be held on July 31, 1995, and at any adjournment thereof, pursuant to the
accompanying Notice of Meeting. Shares represented by a properly executed proxy
received by the Corporation in time to permit its use at the meeting will be
voted as indicated on the proxy. Stockholders may revoke the authority granted
by their proxies at any time before the exercise of the powers conferred
thereby by notice in writing delivered to the Secretary of the Corporation; by
submitting a subsequently dated proxy; or by attending the meeting, withdrawing
the proxy, and voting in person.
It is proposed that at the meeting action will be taken upon the election of
seven directors to hold office for the ensuing year. The Board of Directors
knows of no other business to come before the meeting. If any other business
should properly come before the meeting, the persons named on the enclosed
proxy will have discretionary authority to vote thereon in accordance with
their best judgment.
The cost of soliciting proxies will be borne by the Corporation. In addition
to solicitations by mail, officers and regular employees of the Corporation may
solicit proxies personally or by telephone, telegraph or other means without
additional compensation. Arrangements will also be made with banks, brokerage
houses and other custodians, nominees and fiduciaries to forward solicitation
material to the beneficial owners of stock held of record by such persons, and
the Corporation will, upon request, reimburse them for their reasonable
expenses in so doing.
At the close of business on June 1, 1995, there were outstanding and entitled
to vote at the meeting 21,274,635 shares of Common Stock. Each share of stock
outstanding on such date entitles the stockholder of record to one vote on all
matters submitted at the meeting. The presence in person or by proxy of
stockholders entitled to cast a majority of all the votes entitled to be cast
will constitute a quorum for the transaction of business at the meeting.
Abstentions and broker non-votes will be counted for purposes of determining
the presence or absence of a quorum. If a quorum is present, a plurality of the
votes cast at the meeting is required for the election of directors. Any other
matter submitted to stockholders for approval would require the affirmative
vote of a majority of the aggregate number of shares present at the meeting and
entitled to vote on the matter. Thus, an abstention has the same practical
effect as a negative vote, but a broker non-vote has no effect.
Participants in the Corporation's Profit-Sharing Investment Plan are entitled
to instruct the Plan trustee, on a confidential basis, how to vote all shares
of Armor All Common Stock allocated to their accounts under the Plan and will
receive a separate voting instruction card for that purpose. All shares as to
which the trustee receives no voting instructions from participants will be
voted by the trustee in the same proportion as shares as to which instructions
are received.
1
<PAGE>
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as of June 1, 1995, with respect
to the only persons known by the Corporation to be the beneficial owners of
more than five percent of its outstanding Common Stock, which is the
Corporation's only class of voting securities.
<TABLE>
<CAPTION>
AMOUNT AND
NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT
OF BENEFICIAL OWNER OWNERSHIP OF CLASS
------------------- ---------------- --------
<S> <C> <C>
McKesson Corporation........................... 11,624,900(1) 54.6
One Post Street Sole voting and
San Francisco, CA 94104 investment power
Ariel Capital Management, Inc.................. 2,093,379(2) 9.8
307 North Michigan Ave.
Chicago, IL 60601
RCM Capital Management......................... 1,625,700(3) 7.6
Four Embarcadero Center
Suite 3000
San Francisco, CA 94111
</TABLE>
- --------
(1) In November 1994, Eli Lilly and Company acquired what was formerly the
Corporation's majority stockholder, McKesson Corporation, a Delaware
corporation, and renamed it PCS Holding Corporation. Immediately prior to
consummation of this transaction, the former McKesson Corporation
distributed to its stockholders all of the common stock of a newly created
Delaware corporation, SP Ventures, Inc., since renamed McKesson
Corporation. This new company holds all of the former McKesson
Corporation's assets, businesses and stock interests, including its
majority interest in the Corporation, other than the pharmaceutical
benefits management business, which has been retained by PCS Holding
Corporation. In connection with the spin-off, the new McKesson Corporation
has become a co-obligor on the former McKesson Corporation's 4 1/2%
Exchangeable Subordinated Debentures due 2004 (the "Debentures"), and has
assumed responsibility for satisfying PCS Holding Corporation's obligations
thereunder, including its obligation to deliver shares of the Corporation's
Common Stock or cash in lieu thereof upon an exchange of Debentures.
(2) This information is based on an amendment to a Schedule 13G filed with the
Securities and Exchange Commission, reporting that as of December 31, 1994,
Ariel Capital Management, Inc., a registered investment adviser, had sole
voting power as to 1,451,729 shares, shared voting power as to 129,900
shares, and sole dispositive power as to 2,093,379 shares.
(3) This information is based upon information received from RCM Capital
Management ("RCM"), on its own behalf and that of its general partner, RCM
Limited L.P., and RCM Limited L.P.'s general partner, RCM General
Corporation, that as of March 31, 1995, RCM, a registered investment
adviser, had sole voting power as to 1,341,700 shares, no voting power as
to 284,000 shares, shared dispositive power as to 22,000 shares, and sole
dispositive power as to 1,603,700 shares.
McKesson Corporation ("McKesson") intends to vote its shares in favor of the
nominees for election to the Board of Directors listed herein. Since the
holders of Common Stock do not have cumulative voting rights and since
McKesson's shares represent more than 50% of the outstanding shares of Common
Stock entitled to be voted at the meeting, McKesson will be able to elect the
entire Board of Directors.
2
<PAGE>
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
The following table indicates as to each director and each of the executive
officers named in the Summary Compensation Table who were employed by the
Corporation on March 31, 1995 and as to all directors and officers as a group,
the number of shares and percentage of the Corporation's Common Stock
beneficially owned as of June 1, 1995:
<TABLE>
<CAPTION>
AMOUNT AND NATURE
OF BENEFICIAL
NAME OWNERSHIP(1)
---- -----------------
<S> <C>
William A. Armstrong................................... -0-
Jon S. Cartwright...................................... 6,000(2)
Kenneth M. Evans....................................... 110,961(2)(3)
David L. Mahoney....................................... -0-
David E. McDowell...................................... -0-
Karen Gordon Mills..................................... 5,000(2)
Alan Seelenfreund...................................... -0-
Michael A. Caron....................................... 44,250(2)(3)
Steven L. Kliff........................................ 20,505(2)(3)
All Directors and Officers as a Group (17) persons..... 365,556(2)(3)
</TABLE>
- --------
(1) Unless otherwise indicated, the nature of beneficial ownership for all
shares is sole voting and investment power (or with voting and investment
power shared with a spouse). The shares represent less than 1% of the
outstanding shares for every person, and 1.7% for all directors and
officers as a group.
(2) Includes shares that may be acquired within 60 days after June 1, 1995
through the exercise of stock options granted under the Corporation's 1986
Stock Option Plan, as follows: Mr. Evans, 71,250; Mr. Caron, 28,501; Mr.
Kliff, 11,376; Mr. Cartwright, 5,000; Ms. Mills, 5,000; and all directors
and officers as a group, 247,403.
(3) Includes shares held under the Corporation's Profit-Sharing Investment Plan
and as to which the participant has sole voting but no investment power, as
follows: Mr. Evans, 1,118; Mr. Caron, 2,498; Mr. Kliff, 129; and all
directors and officers as a group, 11,081; 36,575 shares subject to
possible forfeiture granted to Mr. Evans, 8,600 to Mr. Caron, 9,000 to Mr.
Kliff, and 84,975 shares to all directors and officers as a group under the
Corporation's 1988 Restricted Stock Plan; 500 shares as to which a member
of the group disclaims beneficial ownership; and 500 shares held in a
family trust by a member of the group, as to which the holder and his
spouse have shared voting and investment power.
ELECTION OF DIRECTORS
It is the intention of the persons named in the enclosed form of proxy,
unless authorization to do so is withheld, to vote for the election of the
seven nominees named below, to serve as directors until the next annual meeting
of stockholders and until their successors shall have been elected and
qualified. If any nominee should be unavailable for election, an event which is
not presently anticipated, the proxies will be voted for the election of such
other person or persons as shall be determined by the persons named in the
enclosed form of proxy in accordance with their judgment, or the number of
authorized directors may be reduced.
Following is information concerning the nominees for election at the meeting.
Each nominee has consented to being named in this Proxy Statement and to serve
if elected. All nominees are currently serving as directors and were elected by
the stockholders at the 1994 Annual Meeting. Ages shown are as of June 1, 1995.
3
<PAGE>
WILLIAM A. ARMSTRONG
Age 53. Vice President Human Resources and Administration of McKesson since
April 1, 1993; Vice President Administration from January 1992 to April 1993;
Vice President from July 1991 until January 1992; Executive Assistant to the
Office of the Chief Executive from April 1990 until January 1992. Mr. Armstrong
has been a director of the Corporation since 1991 and is a member of the
Compensation Committee.
JON S. CARTWRIGHT
Age 58. Professor Emeritus of Management and Organization of the University
of Southern California ("USC") School of Business Administration since January
1995; Executive Director of the Center for Telecommunications Management, a
nonprofit research and education center affiliated with the USC Graduate School
of Business Administration, from January 1990 to January 1995; Associate
Professor from January 1990 to June 1992, and Professor of Management and
Organization at the USC Graduate School of Business Administration from June
1992 to January 1995. Mr. Cartwright has been a director of the Corporation
since 1993 and is Chairman of the Audit Committee and a member of the
Compensation Committee.
KENNETH M. EVANS
Age 53. President and Chief Executive Officer since April 1991. Group Vice-
President of the Do-it-Yourself Products Group of L. & F. Products, a
subsidiary of Eastman Kodak, from 1989 to April 1991. Mr. Evans has been a
director of the Corporation since 1991. He is also a director of the O'Brien
Corporation.
DAVID L. MAHONEY
Age 40. Vice President of McKesson since 1990, and President of McKesson's
Healthcare Delivery Systems, Inc. subsidiary since September 1994; Vice
President Strategic Planning of McKesson from July 1990 to September 1994;
formerly a Principal (from 1987 to 1990) of McKinsey & Company, an
international management consulting firm. Mr. Mahoney has been a director of
the Corporation since 1992.
DAVID E. MCDOWELL
Age 52. Chairman of the Board since April 1992. President and Chief Operating
Officer of McKesson since January 1992. Vice President and General Manager,
Quality and Chief Information Officer of International Business Machines
Corporation ("IBM") from November 1990 until January 1992; President of IBM's
National Service Division from July 1987 until November 1990. Mr. McDowell has
been a director of the Corporation since 1992 and is Chairman of the
Compensation Committee and a member of the Audit Committee. He is also a
director of McKesson.
KAREN GORDON MILLS
Age 41. President of MMP Group, Inc., a management company providing
consulting and investment banking services, since 1993; Managing Director and
Chief Operating Officer, Industrial Group, E. S. Jacobs & Company, from 1983 to
1993. Director of Triangle Pacific Corp., Arrow Electronics, Inc., Telex
Communications, Inc., and The Scotts Company. Ms. Mills has been a director of
the Corporation since 1994 and is a member of the Audit Committee.
4
<PAGE>
ALAN SEELENFREUND
Age 58. Chairman of the Board and Chief Executive Officer of McKesson since
November 1989.Mr. Seelenfreund has been a director of the Corporation since
1986. He is also a director of McKesson and Pacific Gas and Electric Company.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Under the federal securities laws, the Corporation's Directors, its executive
officers and any persons holding (as defined in the rules and regulations of
the Securities and Exchange Commission) more than ten percent of the
Corporation's Common Stock are required to report their initial ownership of
the Corporation's Common Stock and any subsequent changes in that ownership to
the Securities and Exchange Commission (the "Commission"), the NASDAQ Stock
Market and the Corporation. For fiscal year 1995, these filing requirements
were satisfied. In making this disclosure, the Corporation has relied solely on
written representations of its Directors and executive officers and its ten
percent holders and/or copies of the reports that they have filed with the
Commission.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors has designated two standing committees--an Audit
Committee and a Compensation Committee. The members of each standing committee
are appointed by the Board of Directors and serve a term coexistent with that
of the Board that appointed such committee.
The Audit Committee, composed of three directors, held two meetings during
the year ended March 31, 1995. The Audit Committee recommends to the Board the
retention or discharge of the Corporation's independent auditors and reviews
the scope, extent and procedures of the audit and the fees to be paid therefor.
The Committee also reviews the audit results, and approves the audited
financial statements and recommends to the Board their inclusion in the annual
report to stockholders; consults with the independent auditors, the internal
auditors and management on the adequacy of internal accounting controls; and
performs such other functions as may be necessary in the efficient discharge of
its duties.
The Compensation Committee, composed of three directors, held four meetings
during the year ended March 31, 1995. The Compensation Committee serves as the
administrative committee for the Corporation's stock option plan, restricted
stock plan, deferred compensation plan, and all other incentive plans; reviews
and makes recommendations to the Board with respect to the salary and other
terms and conditions of employment of the Chief Executive Officer and approves
salaries and other terms and conditions of employment of all other officers and
of other employees of the Corporation above specified salary grades, and
examines and makes recommendations to the Board regarding the Corporation's
overall compensation program for managerial level employees.
The Board of Directors held six meetings during the year ended March 31,
1995. Attendance at Board and Committee meetings combined averaged
approximately 96%. Each director, except for Mr. Seelenfreund, attended more
than 75% of the combined total meetings of the Board and Committees of the
Board on which the director served at any time during the year.
The Board of Directors will consider nominees for director recommended by
stockholders. Any stockholder who wishes to recommend a nominee should submit
the recommendation in writing to the Vice President and Secretary of the
Corporation, c/o McKesson Corporation, One Post Street, San Francisco, CA
94104.
5
<PAGE>
COMPENSATION OF DIRECTORS
During the fiscal year ended March 31, 1995, each director who was not an
employee of the Corporation or of McKesson received an annual retainer of
$12,000, payable quarterly; a stipend of $750 for each Board or Committee
meeting attended; and reimbursement for all expenses incurred in attending such
meetings. Directors who are employees of the Corporation or of McKesson receive
no additional compensation for their services as members of the Board or any
Board committee. In addition, the nonemployee directors also receive
nonqualified stock options under the provisions of the 1986 Stock Option Plan,
which provide that each nonemployee director, on the date of the Annual Meeting
of Stockholders at which he or she is first elected to the Board, is to receive
an option to purchase 5,000 shares of Common Stock, which is immediately
exercisable in full but expires in five equal annual installments. On the date
of each subsequent annual meeting, each continuing nonemployee director
automatically receives an option to purchase an additional 1,000 shares, which
is immediately exercisable in full. Subject to the above-mentioned expiration
provisions, the term of each option is five years.
Under the Corporation's Deferred Compensation Administration Plan (the
"DCAP"), any director entitled to compensation for services as a director may
make an irrevocable election to defer receipt of all or a portion of his or her
annual retainer and meeting fees, (but not less than $5,000), until such person
ceases to be a director or attains age 65, whichever is later, or at such other
time as is specified by the director, after which payments are made in any
number of approximately equal annual installments over such period of years,
not exceeding fifteen, as is elected by the director. In the event of a change
in control of the Corporation (as defined in the DCAP) deferred funds shall be
distributed immediately upon the effective date of the change. One director
currently participates in the DCAP.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
David E. McDowell, Chairman of the Compensation Committee, is President and
Chief Operating Officer and a Director of McKesson, and William A. Armstrong, a
member of the Committee, is Vice President Human Resources and Administration
of McKesson. The third member of the Committee, Jon S. Cartwright, is an
outside director. (See the discussion of Certain Relationships and Related
Transactions on page 16.)
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Corporation's executive compensation program is administered by the
Compensation Committee (the "Committee") of the Board of Directors. The
Committee is composed of three directors. Two are officers of McKesson and one
is an independent outside director. The Committee is responsible for
administering the Corporation's stock option and restricted stock plans,
reviewing and making recommendations to the full Board with respect to the
salary, incentive compensation and other terms and conditions of employment of
the Chief Executive Officer and approving salaries, incentive compensation and
other terms and conditions of employment of the other executive officers named
in the Summary Compensation Table (the "executive officers") and other officers
and key employees of the Corporation in and above specified salary grade
levels.
The following report was prepared by the members of the Committee (whose
names appear at the end of the report) to provide the Corporation's
stockholders with an explanation of Armor All's compensation policies, and the
criteria used in designing compensation programs and setting compensation
levels for the executive officers, and specifically, the compensation of the
Chief Executive Officer during fiscal year 1995.
6
<PAGE>
In its deliberations concerning compensation of executive officers, the
Committee considers the following factors: (1) the Corporation's performance in
comparison with previously set objectives and against prior year's achievement,
(2) the individual performance of each executive officer, (3) a number of
comparative compensation surveys, which are supplied by professional
compensation consultants approved by the Committee and retained by the
Corporation for this purpose, and other material concerning compensation levels
and stock grants at similar companies, such as compensation information
disclosed in the proxy statements of other companies, (4) the overall
competitive environment for executives and the level of compensation needed to
attract and retain executive talent, and (5) the recommendations of
professional compensation consultants. Companies used in comparative analyses
for executive compensation purposes are selected with the assistance of these
professional compensation consultants. Such companies represent a broad cross-
section of consumer product companies and are selected based on a variety of
factors including similarity in financial attributes, size and complexity to
the Corporation. The companies used in comparative analyses for executive
compensation purposes include some of the companies in the Peer Group Index
used in the Performance Graph, as well as other companies. The Committee relies
on a broad array of companies in various industries for comparative analysis of
executive compensation because it believes that the Corporation's competitors
for executive talent are more varied than the companies included in the Peer
Group Index chosen for comparing stockholder return in the Performance Graph.
The Corporation's compensation program is designed to enhance stockholder
value by linking a large part of the executives' compensation directly to
performance. The objective is to provide base salary for executives at
approximately the 60th percentile for executives at similar companies, while
providing an opportunity to achieve total compensation (including base salary,
annual bonus and long-term incentives) at the 75th percentile or above for
exceptional performance.
COMPONENTS OF COMPENSATION
The Corporation's compensation package consists of base salary, a short-term
incentive plan, and long-term incentives (stock and cash). Base pay is reviewed
annually. Actual base salary is based on individual performance, competitive
pay practices and level of responsibility. Competitive pay practices are
determined through job evaluation and market comparisons. The fiscal year 1995
salaries of executive officers were determined primarily on the basis of each
executive officer's performance and responsibility, the Corporation's
performance, and competitive salary level market data. Increases in fiscal year
1995 salaries reflected the Committee's determination that compensation levels
should be increased to remain competitive, given each executive officer's
performance, the Corporation's performance in fiscal year 1995 and the
competitive environment for executive talent.
The Short-Term Incentive Plan ("STIP") rewards participants for reaching
profit targets related to required rates of return. For fiscal year 1995, the
measures included goals for pre-tax income at specified levels of investment.
Individual executives' target values vary by level of responsibility, are set
as a percentage of base salary and are competitive with those paid to executive
officers at companies in the comparison group. The annual incentive award an
executive officer is eligible to receive can range from zero to three times the
incentive award percentage assigned to his or her position. Actual awards to
the executive officers for fiscal year 1995 depended on the degree to which the
Corporation achieved its target income objectives and the extent to which the
executive officer was judged to have contributed to the overall results.
The Corporation has three executive compensation plans to help achieve long-
term performance objectives. The three plans are the Stock Option Plan, the
Restricted Stock Plan and the Long-Term Incentive
7
<PAGE>
Plan ("LTIP"). One-third of competitive long-term incentive value is intended
to be provided by stock options, one-third by restricted stock and one-third by
the cash LTIP. The LTIP provides cash awards based solely on the Corporation's
results over three-year periods. Goals for this plan are set annually for the
successive three-year period. These goals are designed to focus an executive
officer's attention on long-term growth balanced with return to stockholders.
The measures of financial performance currently in use are profit before tax in
excess of a specified percentage return on assets employed. The LTIP awards to
the executive officers for the three-year period ended March 31, 1995 reflected
the Corporation's achievement of 113% of the LTIP targets. Although the
Corporation plans to discontinue the LTIP, it was amended by the Board of
Directors on December 1, 1994 to provide for a one-time incentive period
beginning April 1, 1993 and ending on March 31, 1996 and providing that 50% of
the target award shall be paid in cash and that 50% shall be an award of
restricted stock.
The Corporation's 1986 Stock Option Plan is designed to strengthen the link
between the interests of shareholders and management. Stock options are
generally granted annually and provide executives a ten-year period, subject to
specified vesting requirements, to purchase shares of Common Stock at the full
market price of the stock on the day the option is granted. Annual grants are
generally equal to the target percent of pay described above modified by
performance. In addition, the Committee considers the size of prior grants, but
does not take into account the number of options currently held by an executive
officer in determining annual award levels. The number of options needed to
provide the target percent of pay is determined by use of a modified Black-
Scholes model for valuing stock options.
The Corporation's 1988 Restricted Stock Plan was established to provide
strong incentive for highly qualified executives to remain with the Corporation
as well as to strengthen their link to shareholders through increased stock
ownership. Grants of restricted stock are considered annually. The current
general practice is for restrictions to lapse only if performance goals are met
during a four-year period. The measure used to determine if restrictions will
lapse on the performance-based shares awarded in fiscal year 1995 will be the
compounded increase in profit before tax over a four-year period.
The Corporation has not yet adopted a policy regarding the recently enacted
$1 million annual limitation on the federal income tax deductibility of
compensation paid to any executive officer. However, it has been determined
that the new limitations did not impact the Corporation in fiscal year 1995. At
the present time, there are no executive officers whose compensation meets or
exceeds the $1 million annual limit nor is it expected that an executive
officer will reach this limit in fiscal year 1996. The Committee's present
intention is to comply with the requirements of Section 162(m) unless the
Committee concludes that required changes would not be in the best interests of
the Corporation or its stockholders.
COMPENSATION OF THE PRESIDENT AND CHIEF EXECUTIVE OFFICER
During fiscal year 1995, the Committee reviewed the performance of the
President and CEO, Kenneth M. Evans, and made recommendations to the Board
concerning his base salary and STIP award and approved his stock option and
restricted stock awards using the same criteria that were used to determine
salaries and incentive compensation levels for the executive officers discussed
at the beginning of this report. Mr. Evans' compensation for fiscal year 1995
is shown in the Summary Compensation Table on page 12.
The Corporation's performance in fiscal year 1995 reflected strong
improvement over the prior year and against aggressive performance goals that
had been set. The Corporation's international business exceeded performance
targets with increased revenues and profits over fiscal year 1994. Domestic
business exceeded its goal in revenues, while an aggressive goal of profit
before tax was only partially attained. The Corporation's
8
<PAGE>
share of the U.S. Automotive Appearance products market increased to 36%, as
revenues increased at twice the rate of industry growth. Customer acceptance of
four new products exceeded expectations. Three of these products were developed
and marketed by the Home Care Division, establishing a platform for future
growth in the Home Care industry. During fiscal year 1995, Mr. Evans' salary
was determined based on the Corporation's performance and competitive market
data on salary levels. The Committee increased his salary from $285,000 to
$300,000, effective April 1, 1994. His STIP award represented 36% of his annual
compensation and reflected the difficulty in the attainment of the goals set
for the Corporation during the year and his success in achieving those goals.
He also received an LTIP award for the three-year period ending March 31, 1995
based upon the Corporation's exceeding performance targets during the period.
The stock option award for Mr. Evans was based on the Committee's assessment of
his overall performance and on the Committee's philosophy that stock ownership
by management aligns management's interests more closely with those of the
Corporation's shareholders. He also received a restricted stock grant of 5,500
shares in fiscal year 1995. The restrictions on these shares lapse in fiscal
year 1999 dependent upon the achievement of stretch goals in compound growth in
profit before tax.
It is the Committee's view that the total compensation package for Mr. Evans
was based on an appropriate balance of (1) the Corporation's performance, (2)
his own performance, and (3) competitive practice.
The Compensation Committee
David E. McDowell, Chairman
William A. Armstrong
Jon S. Cartwright
9
<PAGE>
PERFORMANCE GRAPHS
Set forth below is a line graph comparing the performance of the
Corporation's Common Stock during the period April 1, 1990 through March 31,
1995 with the NASDAQ Stock Market Index, and a peer group composed of the
following eighteen consumer products companies: Alberto-Culver Company, Church
& Dwight Co., Inc., Eljer Industries, Inc., First Brands Corporation, Kimball
International, Inc., Lancaster Colony Corporation, La-Z-Boy Chair Company,
National Presto Industries, Inc., NCH Corporation, Oneida Ltd., Pratt &
Lambert, Inc., Royal Appliance Mfg. Co., RPM, Inc., The Scotts Company,
Stanhome Inc., The Valspar Corporation, WD-40 Company, and Wynn's
International, Inc. The Corporation is not included in the peer group.
Neutragena Corporation, formerly a member of the peer group, has been removed
because it is no longer a publicly-held company. Total Return Indices reflect
reinvested dividends and are weighted on a market capitalization basis at the
time of each reported data point. The stock price performance depicted in the
performance graphs shown below is not necessarily indicative of future price
performance.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG ARMOR ALL PRODUCTS, NASDAQ COMPOSITE AND PEER GROUP
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period ARMOR ALL NASDAQ
(Fiscal Year Covered) PRODUCTS COMPOSITE Peer Group
- --------------------- ---------- --------- ----------
<S> <C> <C> <C>
Measurement Pt- 03/31/90 $100.00 $100.00 $100.00
FYE 03/31/91 $ 77.72 $114.21 $121.34
FYE 03/31/92 $ 86.58 $145.58 $143.69
FYE 03/31/93 $141.39 $167.28 $149.49
FYE 03/31/94 $148.49 $180.59 $153.20
FYE 03/31/95 $157.11 $185.32 $152.72
</TABLE>
* Assumes $100 invested in Armor All Common Stock and in each index on March 31,
1990 and that all dividends are reinvested.
10
<PAGE>
The Corporation has been under the direction of its current President and CEO
since April 15, 1991, and as the graph below demonstrates, the Corporation's
Common Stock has outperformed the broad NASDAQ Stock Market Index and its peer
group since April 1, 1992.
COMPARISON OF FOUR-YEAR CUMULATIVE TOTAL RETURN*
AMONG ARMOR ALL PRODUCTS, NASDAQ COMPOSITE AND PEER GROUP
PERFORMANCE GRAPH APPEARS HERE
<TABLE>
<CAPTION>
Measurement Period ARMOR ALL NASDAQ
(Fiscal Year Covered) PRODUCTS COMPOSITE Peer Group
- --------------------- ---------- --------- ----------
<S> <C> <C> <C>
Measurement Pt- 03/31/91 $100.00 $100.00 $100.00
FYE 03/31/92 $111.40 $127.47 $118.42
FYE 03/31/93 $181.92 $146.47 $123.20
FYE 03/31/94 $191.06 $158.13 $126.26
FYE 03/31/95 $202.15 $162.27 $125.86
</TABLE>
* Assumes $100 invested in Armor All Common Stock and in each index on March 31,
1991 and that all dividends are reinvested.
11
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the compensation for
services in all capacities for the three fiscal years ended March 31, 1993,
1994 and 1995 of those persons who were at March 31, 1995 the Chief Executive
Officer, the only other two individuals who served as executive officers of the
Corporation as of March 31, 1995, and an executive officer whose employment
terminated prior to March 31, 1995.
<TABLE>
<CAPTION>
LONG-TERM COMPENSATION
----------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
----------------------------------- ------------------- --------
RESTRICTED
OTHER ANNUAL STOCK LTIP ALL OTHER
NAME AND PRINCIPAL COMPENSATION AWARDS OPTIONS/ PAYOUTS COMPENSATION
POSITION(1) YEAR SALARY ($) BONUS ($) ($)(2) ($)(3) SARS (#) ($) ($)(4)
------------------ ---- ---------- --------- ------------ ---------- -------- -------- ------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Kenneth M. Evans, 1995 $300,000 $170,000 -- $118,250 20,000 $ 91,530 $ 42,374
President and 1994 285,000 290,000 -- 347,900 15,000 112,500 32,508
CEO 1993 269,167 330,000 -- 175,000 30,000 0 28,858
Michael A. Caron, 1995 169,000 47,000 -- 43,000 7,000 44,800 29,467
Senior Vice 1994 163,600 54,000 -- 43,050 3,000 56,900 21,332
President and 1993 158,600 84,500 -- 43,750 8,250 50,200 18,518
President of Armor
All International
Steven L. Kliff, 1995 175,000 47,000 -- 43,000 6,500 41,000 21,633
Senior Vice 1994 158,250 70,000 -- 61,500 5,000 0 9,368
President
Consumer
Products(5)
Mervyn J. 1995 185,500(6) (6) -- 0 0 (6) 352,202(6)
McCulloch, 1994 179,000 72,000 -- 61,500 5,000 60,100 23,268
Executive Vice President 1993 170,000 125,000 -- 52,500 13,200 52,500 20,223
and Chief Financial
Officer(6)
</TABLE>
- --------
(1) Mr. McDowell, who serves as Chairman of the Board of the Corporation,
receives no compensation from the Corporation.
(2) The aggregate amount of perquisites and other personal benefits paid to
each of the named executive officers for fiscal year 1995 did not exceed
the lesser of 10% of such officer's total annual salary and bonus or
$50,000, and such amounts are not included in the table.
(3) All shares awarded in fiscal years 1995 and 1993 were performance-based and
the restrictions will lapse at the end of fiscal years 1999 and 1997,
respectively, if the Corporation meets specified financial goals. Of the
restricted shares awarded in fiscal year 1994, 12,500 shares, awarded to
Mr. Evans, will be released in annual increments of 25% beginning one year
after the date of the award, provided that Mr. Evans is still in the employ
of the Corporation on the dates on which the restrictions lapse. The
remaining restricted shares awarded in fiscal year 1994 were performance-
based and will be released at the end of fiscal year 1998 if the
Corporation attains a specified goal of compounded growth in profit before
tax for the four-year period fiscal year 1995 through fiscal year 1998.
Dividends are paid on the shares at the same rate as paid to all other
stockholders. The 1988 Restricted Stock Plan provides that, in the event of
a change in control of the Corporation or of McKesson (as defined in the
plan), all restrictions on outstanding restricted stock grants shall
immediately lapse. As of March 31, 1995, the number of shares of restricted
stock outstanding to each named executive officer and the market value
12
<PAGE>
of the shares, respectively, were as follows: Mr. Evans, 36,575 and
$786,363; Mr. Caron, 8,600 and $184,900; Mr. Kliff, 9,000 and $193,500; and
Mr. McCulloch, 0 and $0.
(4) For fiscal year 1995, includes the aggregate value of (i) the Corporation's
matching stock contributions under the Profit-Sharing Investment Plan
("PSIP"), a plan designed to qualify as an employee stock ownership plan
under the Internal Revenue Code (the "Code"), allocated to the accounts of
the named executive officers, as follows: Mr. Evans, $5,004; Mr. Caron,
$4,949; and Mr. Kliff, $2,537; (ii) employer matching cash contributions
under the Supplemental PSIP, an unfunded, nonqualified plan established
because of limitations on annual contributions to the PSIP contained in the
Code, as follows: Mr. Evans, $18,191; Mr. Caron, $4,010; and Mr. McCulloch,
$5,481; (iii) stock contributions and a special cash allocation resulting
from the PCS transaction made by McKesson Corporation to the named
executives' ESOP accounts under the McKesson PSIP, as follows: Mr. Evans,
$19,178; Mr. Caron, $19,343; Mr. Kliff, $19,096; and Mr. McCulloch,
$10,590; and (iv) above-market interest accrued on deferred compensation
for Mr. Caron in the amount of $1,165.
(5) Mr. Kliff became an executive officer on August 17, 1993.
(6) Mr. McCulloch's employment with the Corporation terminated on January 31,
1995. In connection therewith, the Corporation and Mr. McCulloch entered
into an agreement whereby his salary was continued for a period of three
months, and the Corporation agreed to pay him the cash sums of (i)
$210,000, payable in installments over a period of one year, a portion of
which is subject to offset by income received from any subsequent employer,
(ii) approximately $118,000 in lieu of awards otherwise payable pursuant to
the Corporation's annual and long-term incentive plans for fiscal year
1995, and (iii) $8,131 in accrued vacation pay, which amounts are included
in the table. 2,000 shares of restricted stock which vested on February 21,
1995 were distributed to Mr. McCulloch, and he received the right to
exercise all of his vested stock options until that date. The agreement
also contains standard provisions such as a release of claims, continuing
confidentiality obligations, and restrictions on Mr. McCulloch's ability to
engage in activities in competition with the Corporation for a specified
period of time.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
GRANT DATE
INDIVIDUAL GRANTS VALUE
-------------------------------------------- ----------------
% OF TOTAL
OPTIONS
GRANTED TO EXERCISE
EMPLOYEES OR BASE
OPTIONS/SARS IN FISCAL PRICE EXPIRATION GRANT DATE
NAME GRANTED(#)(1) YEAR ($/SH) DATE PRESENT VALUE(2)
---- ------------- ---------- -------- ---------- ----------------
<S> <C> <C> <C> <C> <C>
Kenneth M. Evans........ 20,000 11.25 $21.50 1/26/05 $134,376
Michael A. Caron........ 7,000 3.94 21.50 1/26/05 47,032
Steven L. Kliff......... 6,500 3.66 21.50 1/26/05 43,672
Mervyn J. McCulloch..... -0- -0- -0- -0- -0-
</TABLE>
- --------
(1) During fiscal year 1995, options to purchase an aggregate of 183,800 shares
were granted to 77 optionees at option prices ranging from $19.75 to $22.25
with a weighted average option price of $21.40. All options granted to
employees are for ten-year terms and are granted at fair market value and
exercisable in installments of 25% per year beginning one year after the
date of grant. Optionees may satisfy the exercise price by submitting
currently owned shares and/or cash. Income tax withholding obligations may
be satisfied by electing to have the Corporation withhold shares otherwise
issuable under the option
13
<PAGE>
with a fair market value equal to such obligations. The Corporation has not
granted any stock appreciation rights.
(2) In accordance with Securities and Exchange Commission rules, a modified
Black-Scholes option pricing model was chosen to estimate the grant date
present value of 31.25% for the options set forth in this table. The
assumptions used in calculating the reported value include: stock
volatility, 32.97%; interest rate, 7.78%; annual dividend, $0.64; exercise
period, 10 years; reductions of approximately 9.61% to reflect the
probability of forfeiture due to termination prior to vesting, and
approximately 12.98% to reflect the probability of a shortened option term
due to termination of employment prior to the option expiration date. The
Corporation does not believe that the Black-Scholes model, or any other
model, can accurately determine the value of an option. Accordingly, there
is no assurance that the value realized by an executive, if any, will be at
or near the value estimated by the Black-Scholes model. Future compensation
resulting from option grants is based solely on the performance of the
Corporation's stock price.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS AT
ACQUIRED OPTIONS AT FISCAL YEAR-END(#) FISCAL YEAR-END ($)(1)
ON VALUE ------------------------------ -------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
Kenneth M. Evans........ 5,000 $46,875 58,750 61,250 $491,875 $232,500
Michael A. Caron........ 8,500 80,813 28,501 15,249 199,276 39,481
Steven L. Kliff......... -0- -0- 11,376 17,374 72,879 42,934
Mervyn J. McCulloch..... 17,600 141,806 -0- -0- -0- -0-
</TABLE>
- --------
(1) Options are "in-the-money" if on March 31, 1995 the market price of the
Common Stock ($21.50) exceeded the exercise price of such options. The
value of such options is calculated by determining the difference between
the aggregate market price of the Common Stock covered by the options on
March 31, 1995 and the aggregate exercise price of such options.
LONG-TERM INCENTIVE PLAN AWARDS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
UNDER
NON-STOCK PRICE BASED
PLANS(1)
------------------------
PERFORMANCE OR OTHER
PERIOD UNTIL MATURATION THRESHOLD TARGET MAXIMUM
NAME OR PAYOUT ($) ($) ($)
---- ----------------------- --------- ------ -------
<S> <C> <C> <C> <C>
Kenneth M. Evans........ 3 years 52,500 75,000 112,500
Michael A. Caron........ 3 years 23,660 33,800 50,700
Steven L. Kliff......... 3 years 24,500 35,000 52,500
</TABLE>
- --------
(1) The table above represents potential payouts of awards, if earned, upon
completion of the three-year incentive period ending March 31, 1996. These
awards are tied to profit before tax plus amortization expense in excess of
a specified percentage return on assets employed. Target amounts will be
earned if the goal for return on assets employed is achieved; threshold
amounts are earned at 80% of target, and maximum amounts at 121% of target.
If earned, 50% of the target awards at the time of distribution will be
paid in cash and 50% shall be in the form of an award of restricted stock.
Restrictions on the awards shall lapse at the rate of one-third of the
shares on each of the first three anniversaries of the date of the awards.
14
<PAGE>
EMPLOYMENT CONTRACTS AND TERMINATION
OF EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS
The Corporation does not have employment agreements with its executive
officers. However, as ofApril 1, 1994 it entered into termination agreements
with Messrs. Evans, Kliff and McCulloch providing for payment of severance
benefits upon their termination of employment following a "change in control"
of the Corporation (defined in the agreements as the occurrence of certain
specified events). Mr. McCulloch's agreement was cancelled when his employment
terminated on January 31, 1995. The other two agreements, which will remain in
effect until terminated by the Compensation Committee (or by the Board of
Directors, in the case of Mr. Evans' agreement), provide for the payment of
benefits upon a change in control of the Corporation or of McKesson and actual
or constructive termination of employment within two years of such change. In
the event of termination of employment under the agreements, the Corporation
shall pay to the executive as severance pay in a cash lump sum an amount equal
to 2.99 times his "severance pay base", subject to adjustment as described
below. "Severance pay base" means the executive's "base amount" determined
under Section 280G of the Internal Revenue Code. The amount of severance
benefits paid shall be no higher than the amount that is not subject to
disallowance of deduction under Section 280G of the Internal Revenue Code.
Accrual of service for Mr. Evans would continue under the McKesson Executive
Benefit Retirement Plan and he would continue to participate in the McKesson
Executive Medical Plan and Executive Survivor Benefits Plan for a minimum of
twelve months, plus one month for each year of service with a maximum benefit
of twenty-four months.
RETIREMENT PLAN
Employees of the Corporation participate in the McKesson Corporation
Retirement Plan (the "McKesson Plan"). The costs of participation in the
McKesson Plan are paid by the Corporation.
The table below illustrates, as of March 31, 1995, the estimated annual
benefits payable upon retirement at age 65 under the McKesson Plan in the
specified compensation and years-of-service classifications. The benefits are
computed as single life annuity amounts.
<TABLE>
<CAPTION>
FIVE YEAR YEARS OF SERVICE
AVERAGE -------------------------------
COMPENSATION 15 20 25 30
- ------------ ------- ------- ------- -------
<S> <C> <C> <C> <C>
$150,000....................................... $29,556 $39,408 $49,260 $59,112
200,000....................................... 29,556 39,408 49,260 59,112
300,000....................................... 29,556 39,408 49,260 59,112
400,000....................................... 29,556 39,408 49,260 59,112
500,000....................................... 29,556 39,408 49,260 59,112
600,000....................................... 29,556 39,408 49,260 59,112
700,000....................................... 29,556 39,408 49,260 59,112
</TABLE>
Annual benefits are generally equal to a percentage of final average pay
(averaged over the highest consecutive five-year period out of the last 15
years of service preceding retirement) up to Covered Compensation (the average
of the Social Security wage bases over the 35 year period ending with the year
the participant attains or will attain Social Security Retirement Age) plus a
percentage of final average pay exceeding Covered Compensation, the total of
which is multiplied by years of creditable service up to a maximum of 30 years.
Compensation covered under the McKesson Plan is defined as base pay plus
overtime
15
<PAGE>
and/or annual bonus as disclosed in the Summary Compensation Table for the
named executive officers and as limited by Internal Revenue Code Section
401(a)(17).
As of March 31, 1995, the following individuals had the number of years of
creditable service indicated: Mr. Evans, 4 years; Mr. Caron, 10 years; and Mr.
Kliff, 4 years.
Mr. Evans also participates in the McKesson Corporation 1984 Executive
Benefit Retirement Plan (the "EBRP"). The benefit under the EBRP is a
percentage of final average pay based on years of service or is determined by
the Board of Directors. The maximum benefit is 60% of final average pay. The
total paid under the EBRP is not reduced by Social Security benefits but is
reduced by those benefits payable on a single life basis under the McKesson
Plan. Based on retirement at age 65, the annual combined benefit payable to Mr.
Evans under the McKesson Plan and the EBRP would be approximately $337,260.
INDEBTEDNESS OF EXECUTIVE OFFICER
During fiscal year 1995 the Corporation extended to Mr. Kliff a loan in the
principal amount of $300,000, due six years after the date of the loan, with
annual interest payments at the rate of 4% per annum, and one interim principal
payment of $150,000 due three years after the date of the loan. The loan to Mr.
Kliff was to finance home repair and improvements, and the loan is secured by a
deed of trust on that property. Mr. Kliff's maximum aggregate indebtedness
during fiscal year 1995 was $520,000, under a prior promissory note which was
repaid in fiscal year 1995. The amount outstanding at March 31, 1995 under the
current promissory note was $300,000, and the amount outstanding at May 15,
1995 was $196,000. No other director or executive officer was indebted to the
Corporation in an amount in excess of $60,000 during fiscal year 1995.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On July 1, 1986, the Corporation entered into a Services Agreement, (the
"Agreement") with McKesson, of which Messrs. McDowell and Seelenfreund are
officers and directors, and Messrs. Armstrong and Mahoney are officers.
Pursuant to the Agreement, McKesson has agreed to provide certain corporate
staff services to the Corporation. For the fiscal year ended March 31, 1995,
the amount charged the Corporation by McKesson for such services was $543,000,
exclusive of insurance and outside professional services that are billed
separately. This charge is modified annually to reflect changes in McKesson's
costs of providing these services. Such services include treasury and
financial, legal, corporate secretary, investor relations, tax, internal audit,
planning and corporate development, accounting advice, and employee benefit,
personnel and payroll services. The Corporation can request, and McKesson may
provide, data processing, computer programming and other services to supplement
the capabilities of the Corporation. McKesson has agreed to make available to
the Corporation certain employee benefit plans and also has agreed to allow
Corporation employees to continue to participate in McKesson's retirement plan
and employee stock ownership plans. The Corporation has agreed to contribute
annually to the plans the amount necessary to fund employee participation. The
Corporation is also insured under McKesson's property and casualty insurance
program for limits of liability and deductibles deemed appropriate for the
Corporation's risk exposures and size. Premiums are based on the Corporation's
risk exposure and historical loss experience.
The Agreement is automatically renewed for successive one-year terms unless
terminated and is reviewed annually by the Corporation's Chief Financial
Officer with the independent nonemployee directors. The Agreement will be
terminated if McKesson should own less than a majority of the outstanding
voting stock
16
<PAGE>
of the Corporation, or upon 120 days' prior written notice by either party, or
upon such earlier date as the parties may mutually agree to in writing. The
Agreement provides that McKesson's liability with respect to any loss or
damages arising in connection with the provision of services to the Corporation
is limited to amounts billed for such services.
Pursuant to the Agreement, the Corporation's U.S. operations participate on a
daily basis in a cash management program administered by McKesson. Under this
arrangement, the Corporation invests any excess cash under the cash management
program, has access to the cash invested and meets cash requirements through
borrowing from McKesson. All amounts invested with McKesson are deposited in a
separate bank account in the Corporation's name. The Corporation receives
interest from McKesson on funds deposited under the program, or pays interest
to McKesson on funds borrowed, at a rate equal to the monthly Federal Reserve
Composite Rate for 7-day commercial paper less one-tenth of one percent for
funds deposited under the program and plus one-half of one percent for funds
borrowed from McKesson. The Agreement provides that McKesson will make
available that amount of cash necessary to provide the Corporation with
sufficient funds to meet its needs as defined in its annual capital and
operating budget and that the Corporation will pay McKesson an annual credit
facility fee of $25,000. At March 31, 1995, the Corporation had invested
$18,182,000 under the cash management program at an interest rate of 6.0%. The
maximum amount invested by the Corporation under the cash management program at
any month end during the fiscal year ended March 31, 1995 was $49,027,000. In
the fiscal year ended March 31, 1995, the Corporation received from McKesson
net interest in the amount of $1,656,000 pursuant to this arrangement.
Under the terms of the Acquisition Agreement dated July 1, 1986 pursuant to
which McKesson transferred the business of its Armor All Products Division to
the Corporation (the "Acquisition Agreement"), McKesson and the Corporation
have agreed that, so long as McKesson owns at least a majority of the
outstanding voting stock of the Corporation, McKesson will refer to the
Corporation any business opportunities McKesson deems appropriate concerning
appearance protection products applicable to the automotive aftermarket.
McKesson has complete discretion to determine which products or ideas the
Corporation may develop or fund. McKesson has not established objective
criteria to utilize in exercising its discretion. Such determinations will be
made on a case-by-case basis as such opportunities arise. McKesson has no
obligation to refer to the Corporation ideas or products whether or not related
to appearance protection products applicable to the automotive aftermarket.
McKesson is currently in the business of distributing appearance protection
products, and will continue to be entitled to distribute such products and any
other products it deems appropriate. The Corporation is entitled to retain and
develop any product or idea within the scope of its intended operations which
it develops through its own facilities or staff. McKesson is not obligated to
fund, or permit the Corporation to fund, development of any product or idea, if
McKesson concludes that such development is not in the Corporation's best
interests.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed the firm of Deloitte & Touche LLP as
independent auditors to audit the accounts of the Corporation for the fiscal
year ending March 31, 1996. Deloitte & Touche served as auditors for the
Corporation during the fiscal year ended March 31, 1995. Representatives of
Deloitte & Touche are expected to be present at the meeting to respond to
appropriate questions and to make a statement if they desire to do so.
17
<PAGE>
ANNUAL REPORT
A copy of the Annual Report of the Corporation for the year ended March 31,
1995, including financial statements, accompanies this Proxy Statement.
STOCKHOLDER PROPOSALS FOR 1996 ANNUAL MEETING
A stockholder who intends to submit a proposal for inclusion pursuant to Rule
14a-8 under the Securities Exchange Act of 1934 in the proxy statement for the
1996 Annual Meeting, must send the proposal so as to be received by the
Corporate Secretary at the principal executive offices of the Corporation, 6
Liberty, Aliso Viejo, CA 92656, no later than February 21, 1996.
By Order of the Board of Directors
/s/ NANCY A. MILLER
Nancy A. Miller
Vice President and Secretary
June 21, 1995
18
<PAGE>
June 21, 1995
Dear Armor All Profit-Sharing Investment Plan Participant:
As a participant in the Armor All Products Corporation Profit-Sharing
Investment Plan ("PSIP"), you are a stockholder in the Corporation. At the
Annual Stockholders Meeting to be held on July 31, 1995, you have the right to
instruct the Plan Trustee, on a confidential basis, how to vote the shares of
Armor All Common Stock allocated to your accounts on matters that come before
the stockholders. Your PSIP accounts include the shares held as a result of
Company Matching Contributions and Quarterly Contributions.
The enclosed Proxy Statement describes the proposal to be voted on at this
year's Annual Meeting. The Board of Directors of Armor All recommends that you
vote FOR the election of directors. PLEASE COMPLETE, SIGN AND RETURN THE
ENCLOSED PSIP VOTING CARD IN THE ENVELOPE PROVIDED. If you sign and return this
card without marking any specific voting directions, your shares will be voted
in accordance with the Board of Directors' recommendation as indicated above.
This card also gives the Trustee authority to vote on your behalf on any other
matters which may properly come before the meeting. All shares for which the
Trustee receives no voting instructions will be voted in the same proportion as
shares for which instructions are received.
Participants who own shares of Armor All Common Stock by means other than
the PSIP will receive a separate proxy for the voting of those shares.
To ensure that your shares are represented and voted at the meeting
according to your wishes, your signed PSIP voting card must be received by the
Trustee by July 26, 1995. A copy of the Corporation's 1995 Annual Report will
be distributed separately.
I encourage you to exercise your voting rights as a stockholder of the
Corporation.
Sincerely,
Kenneth M. Evans
President and
Chief Executive Officer
<PAGE>
- --------------------------------------------------------------------------------
P R O X Y
ARMOR ALL PRODUCTS CORPORATION
PROXY FOR ANNUAL MEETING
JULY 31, 1995
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE CORPORATION
The undersigned, whose signature appears on the reverse side, hereby consti-
tutes and appoints David E. McDowell, Kenneth M. Evans and Nancy A. Miller, and
each of them, with full power of substitution, proxies to vote all stock of Ar-
mor All Products Corporation which the undersigned is entitled to vote at the
Annual Meeting of Stockholders to be held in the Lobby Level Conference Room,
44 Montgomery Street, San Francisco, California, on Monday, July 31, 1995 at
10:00 A.M., or at any adjournments thereof, as specified upon the matters indi-
cated on the reverse side, and in their discretion upon any other matters that
may properly come before said meeting.
Election of Directors: William A. Armstrong,
Jon S. Cartwright, Kenneth M. Evans,
David L. Mahoney, David E. McDowell, Karen
Gordon Mills and Alan Seelenfreund.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICE BY MARKING THE APPROPRIATE BOX, SEE
REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOX IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATION. THE PROXY COMMITTEE CANNOT VOTE
YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
SEE REVERSE
SIDE
- --------------------------------------------------------------------------------
-- FOLD AND DETACH HERE --
<PAGE>
- --------------------------------------------------------------------------------
[X] Please mark your votes as in this example.
-------
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BELOW.
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE FOLLOWING PROPOSAL:
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSAL:
- --------------------------------------------------------------------------------
1. Election of Directors (see reverse)
FOR [_] WITHHELD [_]
FOR, except vote withheld from the following nominee(s):
- --------------------------------------------------------------------------------
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
- --------------------------------------------------------------------------------
________________________________________________________________________________
SIGNATURE(S) DATE
- --------------------------------------------------------------------------------
[PASTE-UP ART]
[ARMOR ALL ADVERTISING ART/COUPON]
<PAGE>
- --------------------------------------------------------------------------------
P R O X Y
ARMOR ALL PRODUCTS CORPORATION
PROXY FOR ANNUAL MEETING
JULY 31, 1995
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE CORPORATION
The undersigned, whose signature appears on the reverse side, hereby consti-
tutes and appoints David E. McDowell, Kenneth M. Evans and Nancy A. Miller, and
each of them, with full power of substitution, proxies to vote all stock of Ar-
mor All Products Corporation which the undersigned is entitled to vote at the
Annual Meeting of Stockholders to be held in the Lobby Level Conference Room,
44 Montgomery Street, San Francisco, California, on Monday, July 31, 1995 at
10:00 A.M., or at any adjournments thereof, as specified upon the matters indi-
cated on the reverse side, and in their discretion upon any other matters that
may properly come before said meeting.
Election of Directors: William A. Armstrong,
Jon S. Cartwright, Kenneth M. Evans,
David L. Mahoney, David E. McDowell, Karen
Gordon Mills and Alan Seelenfreund.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICE BY MARKING THE APPROPRIATE BOX, SEE
REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOX IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATION. THE PROXY COMMITTEE CANNOT VOTE
YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
SEE REVERSE
SIDE
- --------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------
[X] Please mark your votes as in this example.
--------
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BELOW.
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE FOLLOWING PROPOSAL:
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSAL:
- --------------------------------------------------------------------------------
1. Election of Directors (see reverse)
FOR [_] WITHHELD [_]
FOR, except vote withheld from the following nominee(s):
- --------------------------------------------------------------------------------
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
- --------------------------------------------------------------------------------
________________________________________________________________________________
SIGNATURE(S) DATE
- --------------------------------------------------------------------------------
<PAGE>
- -------------------------------------------------------------------------------
PSIP VOTING CARD
DIRECTION TO TRUSTEE, ARMOR ALL PRODUCTS CORPORATION
PROFIT-SHARING INVESTMENT PLAN
To: The Chase Manhattan Bank, N.A.
I direct you as Trustee of the Armor All Products Corporation Profit-Sharing
Investment Plan to vote (in person or by proxy) as I have indicated on the
reverse side hereof, all shares of Armor All Products Corporation Common Stock
allocated to my accounts under the plan at the Annual Meeting of Stockholders
of Armor All Products Corporation on July 31, 1995. You may vote according to
your discretion (or that of your proxy holder) on any other matter which may
properly come before the meeting.
Election of Directors: William A. Armstrong, Jon S.
Cartwright, Kenneth M. Evans, David L. Mahoney, David
E. McDowell, Karen Gordon Mills and Alan Seelenfreund.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICE BY MARKING THE APPROPRIATE BOX, SEE
REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOX IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATION.
SEE REVERSE
SIDE
- --------------------------------------------------------------------------------
[PASTE-UP ART]
[ARMOR ALL ADVERTISING ART/COUPON]
<PAGE>
- --------------------------------------------------------------------------------
[X] PLEASE MARK VOTES AS IN THIS EXAMPLE
1. Election of Directors
FOR [_] WITHHOLD [_] FOR ALL EXCEPT [_]
WILLIAM A. ARMSTRONG DAVID E. MCDOWELL
JON S. CARTWRIGHT KAREN GORDON MILLS
KENNETH M. EVANS ALAN SEELENFREUND
DAVID L. MAHONEY
If you do not wish your shares voted "FOR" a particular nominee, mark the
"For All Except" box and strike a line through the nominee(s) name. Your
shares will be voted for the remaining nominee(s).
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ABOVE PROPOSAL.
THIS VOTING CARD WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
ABOVE. IF NO DIRECTION IS GIVEN, IT WILL BE VOTED FOR THE PROPOSAL.
(Signature) X: ________________________________ Date:_______________________
Please be sure to sign and date this Proxy.
- --------------------------------------------------------------------------------
DETACH CARD DETACH CARD
