THE PROCTER & GAMBLE COMPANY
AND SUBSIDIARIES
====================
ANNUAL REPORT ON FORM 10-K
TO THE
SECURITIES AND EXCHANGE COMMISSION
FOR THE
YEAR ENDED JUNE 30, 1995
******************************************
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------------------------------
ANNUAL REPORT ON FORM 10-K PURSUANT TO SECTION 13
OF THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 1995 Commission File No. 1-434
--------------------------------------------------------
THE PROCTER & GAMBLE COMPANY
One Procter & Gamble Plaza, Cincinnati, Ohio 45202
Telephone (513) 983-1100
IRS Employer Identification No. 31-0411980
State of Incorporation: Ohio
--------------------------------------------------------
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each Exchange on which registered
----------------------------- ------------------------------------------
Common Stock, without Par Value New York, Cincinnati, Amsterdam, Paris,
Basle, Geneva, Lausanne, Zurich,
Frankfurt, Antwerp, Brussels, Tokyo
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports) and (2) has been subject to
such filing requirements for the past 90 days. Yes X No .
------ ------
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained,
to the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. -----------
There were 686,947,278 shares of Common Stock outstanding as of August 11,
1995. The aggregate market value of the voting stock held by non-
affiliates amounted to $51 billion on August 11, 1995.
Documents Incorporated By Reference
-----------------------------------
Portions of the Annual Report to Shareholders for the fiscal year ended
June 30, 1995 are incorporated by reference into Part I and Part II of this
report.
Portions of the Proxy Statement for the 1995 Annual Meeting of Shareholders
are incorporated by reference into Part III of this report.
-1-
PART I
------
Item 1. Business.
---------
General Development of Business
-------------------------------
The Procter & Gamble Company was incorporated in Ohio in 1905, having
been built from a business founded in 1837 by William Procter and James
Gamble. Today, the Company manufactures and markets a broad range of
consumer products in many countries throughout the world.
Unless the context indicates otherwise, the term the "Company" as used
herein refers to The Procter & Gamble Company (the registrant) and its
subsidiaries.
Additional information required by this item is incorporated herein by
reference to the Letter to Shareholders, which appears on pages 1-5 of the
Annual Report to Shareholders for the fiscal year ended June 30, 1995.
Financial Information About Industry Segments
---------------------------------------------
The Company's products fall into five business segments: Laundry and
Cleaning, Paper, Beauty Care, Food and Beverage, and Health Care.
Additional information required by this item is incorporated herein by
reference to Note 12 Segment Information, which appears on pages 35 and 36
of the Annual Report to Shareholders for the fiscal year ended June 30,
1995.
Narrative Description of Business
----------------------------------
The Company's business, represented by the aggregate of its Laundry
and Cleaning, Paper, Beauty Care, Food and Beverage, and Health Care
segments, is essentially homogeneous. For the most part, the factors
necessary for an understanding of these five segments are essentially
identical. The markets in which the Company's products are sold are highly
competitive. The products of the Company's business segments compete with
many large and small companies, and there is no dominant competitor or
competitors. Advertising is used in conjunction with an extensive sales
force because the Company believes this combination provides the most
efficient method of marketing these types of products. Product quality,
performance, value and packaging are also important competitive factors.
Most of the Company's products in each of its segments are distributed
through grocery stores and other retail outlets.
The Laundry category and Diaper category constitute 21% and 13% of
consolidated 1995 sales, respectively. These categories constituted
approximately the same percentages of consolidated sales in the preceding
two fiscal years. The creation of new products and the development of new
performance benefits for consumers on the Company's existing products are
vital ingredients in its continuing progress in the highly competitive
markets in which it does business. Basic research and product development
activities continued to carry a high priority during the past fiscal year.
While many of the benefits from these efforts will not be realized until
future years, the Company believes these activities demonstrate its
commitment to future growth.
-2-
The Company has registered trademarks and owns or has licenses under
patents which are used in connection with its business in all segments.
Some of these patents or licenses cover significant product formulation and
processing of the Company's products. The trade names of all major
products in each segment are registered trademarks. In part, the Company's
success can be attributed to the existence of these trademarks, patents and
licenses.
Most of the raw materials used by the Company are purchased from
others. Additionally, some raw materials, primarily chemicals, are
produced by the Company for further use in the manufacturing process. The
Company purchases and produces a substantial variety of raw materials, no
one of which is material to the Company's business taken as a whole.
Expenditures in fiscal year 1995 for compliance with Federal, State
and local environmental laws and regulations were not materially different
from such expenditures in the prior year, and no material increase is
expected in fiscal year 1996.
Operations outside the United States are generally characterized by
the same conditions discussed in the description of the business above and
may also be affected by additional elements including changing currency
values and different rates of inflation and economic growth. The effect of
these additional elements is less significant in the Food and Beverage
segment than in the Company's other business segments.
The Company provides an Employee Stock Ownership Plan ("ESOP") which is
part of The Procter & Gamble Profit Sharing Trust and Employee Stock
Ownership Plan. Convertible preferred stock of the Company and other assets
owned by the ESOP are held through a trust (the "ESOP Trust"). The ESOP
Trust has issued certain debt securities to the public. The Company has
guaranteed payment of principal and interest on these debt securities.
Holders of these debt securities have no recourse against the assets of the
ESOP Trust except with respect to cash contributions made by the Company to
the ESOP Trust, and earnings attributable to such contributions. Such cash
contributions are made by the Company only to the extent that dividends on
the convertible preferred stock are inadequate to fund repayment of the debt
securities. Any such contributions and subsequent payments to holders are
made on a same-day basis and such contributions would therefore not be held
by the ESOP Trust unless there was a default in payment on the debt
securities by the ESOP Trust after having received such contributions from
the Company. Such a default is not likely to occur and there is therefore
little likelihood that there would be assets available to satisfy the claims
of any holders of the debt securities. A summary description of the
liabilities of the ESOP Trust and of the dividends paid by the Company on the
convertible preferred stock and cash payments from the Company to the ESOP
Trust for the three years ended June 30, 1995 are incorporated by reference
to Note 9 Retirement Plans, which appears on pages 32-34 of the Annual Report
to Shareholders for the fiscal year ended June 30, 1995.
Additional information required by this item is incorporated herein by
reference to the Letter to Shareholders, which appears on pages 1-5, Note 12
Segment Information, which appears on pages 35 and 36, the Financial
Highlights, which appear on page 37, and Management's Discussion and
Analysis, which appears on pages 18-22 of the Annual Report to Shareholders
for the fiscal year ended June 30, 1995.
-3-
Financial Information About Foreign and Domestic Operations
-----------------------------------------------------------
The information required by this item is incorporated herein by
reference to Note 12 Segment Information, which appears on pages 35 and 36 of
the Annual Report to Shareholders for the fiscal year ended June 30, 1995.
Item 2. Properties.
-----------
In the United States, the Company owns and operates manufacturing
facilities at 39 locations in 20 states. In addition, it owns and operates
90 manufacturing facilities in 42 other countries. Laundry and Cleaning
products are produced at 37 of these locations, Paper products at 35, Health
Care products at 30, Beauty Care products at 47, and Food and Beverage
products at 16. Management believes that the Company's production facilities
are adequate to support the business efficiently and that the properties and
equipment have been well maintained.
Item 3. Legal Proceedings.
------------------
The Company is involved in clean-up efforts at off-site Superfund
locations, many of which are in the preliminary stages of investigation. The
amount accrued at June 30, 1995 representing the Company's probable future
costs that can be reasonably estimated was $8 million.
The Company is also involved in certain other environmental proceedings.
No such proceeding is expected to result in material monetary or other
sanctions being imposed by any governmental entity, or in other material
liabilities. However, the Company has agreed to participate in the Toxic
Substances Control Act ("TSCA") Section 8(e) Compliance Audit Program of the
United States Environmental Protection Agency ("EPA"). As a participant, the
Company has agreed to audit its files for materials which under current EPA
guidelines would be subject to notification under Section 8(e) of TSCA and to
pay stipulated penalties for each report submitted under this program. It is
anticipated that the Company's liability under the Program will be
$1,000,000. No administrative proceeding is pending; however the Company
anticipates being required to enter an Administrative Order on Consent
pursuant to this Program in late 1995. In addition, the EPA issued to a
subsidiary of the Company a Finding and Notice of Violation ("NOV") dated
June 16, 1994, based on Section 113(a) of the Clean Air Act (as amended), for
alleged violations of the California State Implementation Plan by the
subsidiary's manufacturing plant in Sacramento, California. The violations
relate to 1) a plant expansion project that was implemented on the basis of
calculated emission data that later proved to be inaccurate, with the result
that the project allegedly failed to observe the federal construction ban and
certain "new source review" provisions; and 2) the subsequent installation of
a material recovery unit that is now alleged to be pollution control
equipment for which a permit was required. The subsidiary and EPA have
tentatively agreed that this matter (together with a relatively minor
Superfund Amendments and Reauthorization Act ("SARA") reporting deficiency)
would be resolved upon the payment of a civil penalty of less than $500,000.
Item 4. Submission of Matters to a Vote of Security Holders.
----------------------------------------------------
Not applicable.
-4-
Executive Officers of the Registrant
--------------------------------------------
The names, ages and positions held by the executive officers of the
Company on August 11, 1995 are:
Elected to
Present
Name Position Age Position
---------------- ------------------------- ---- ------------
John E. Pepper Chairman of the Board and 57 1995
Chief Executive.
Director since June 12, 1984.
Durk I. Jager President and Chief Operating 52 1995
Officer.
Director since December 12, 1989.
Wolfgang C. Berndt Executive Vice President. 52 1995
Harald Einsmann Executive Vice President. 61 1995
Director since June 10, 1991.
Alan G. Lafley Executive Vice President. 48 1995
Jorge P. Montoya Executive Vice President. 49 1995
Benjamin L. Bethell Senior Vice President. 55 1991
Robert T. Blanchard Group Vice President. 50 1991
Gordon F. Brunner Senior Vice President. 56 1987
Director since March 1, 1991.
Bruce L. Byrnes Group Vice President. 47 1991
R. Kerry Clark Group Vice President. 43 1995
Larry G. Dare Group Vice President. 55 1990
Stephen P. Donovan, Jr. Group Vice President. 54 1986
Todd A. Garrett Group Vice President. 53 1995
Jacobus Groot Group Vice President. 44 1995
James J. Johnson Senior Vice President 48 1992
and General Counsel.
-5-
Elected to
Present
Name Position Age Position
---------------- ------------------------- ---- ------------
Jeffrey D. Jones Group Vice President. 42 1992
Fuad O. Kuraytim Group Vice President. 54 1995
Gary T. Martin Senior Vice President. 50 1991
Claude L. Meyer Group Vice President. 52 1995
Lawrence D. Milligan Senior Vice President. 59 1990
Thomas A. Moore Group Vice President. 44 1992
Erik G. Nelson Senior Vice President. 55 1993
John O'Keeffe Group Vice President. 45 1995
Herbert Schmitz Group Vice President. 58 1995
Robert L. Wehling Senior Vice President. 56 1994
Edwin H. Eaton, Jr. Vice President and 57 1987
Comptroller.
All of the above Executive officers are members of the Executive Committee of
The Procter & Gamble Company and have been employed by the Company over five
years.
PART II
-------------
Item 5. Market for the Common Stock and Related Stockholder Matters
-----------------------------------------------------------
The information required by this item is incorporated by reference to the
Shareholder Information, which appears on page 40 of the Annual Report to
Shareholders for the fiscal year ended June 30, 1995.
Item 6. Selected Financial Data
-----------------------
The information required by this item is incorporated by reference to the
Financial Highlights, which appear on page 37 of the Annual Report to
Shareholders for the fiscal year ended June 30, 1995.
-6-
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations
-----------------------------------------------------------------------
The information required by this item is incorporated by reference to
Management's Discussion and Analysis, which appears on pages 18-22, Note 11
Commitments and Contingencies and Note 12 Segment Information, which appear on
pages 35 and 36, and the Letter to Shareholders, which appears on pages 1-5, of
the Annual Report to Shareholders for the fiscal year ended June 30, 1995.
Item 8. Financial Statements and Supplemental Data
------------------------------------------
The financial statements and supplemental data are incorporated by
reference to pages 23-37 of the Annual Report to Shareholders for the
fiscal year ended June 30, 1995.
Item 9. Disagreements on Accounting and Financial Disclosure
----------------------------------------------------
Not applicable.
PART III
---------
Item 10. Directors and Executive Officers
--------------------------------
The information required by this item is incorporated by reference to
pages 3-5 and 18 of the proxy statement filed since the close of the fiscal
year ended June 30, 1995, pursuant to Regulation 14A which involved the
election of directors. Pursuant to Item 401(b) of Regulation S-K, Executive
Officers of the Registrant are reported in Part I of this report.
Item 11. Executive Compensation
----------------------
The information required by this item is incorporated by reference to
pages 7-13 of the proxy statement filed since the close of the fiscal year
ended June 30, 1995, pursuant to Regulation 14A which involved the election of
directors.
Item 12. Security Ownership of Certain Beneficial Owners and Management
--------------------------------------------------------------
The information required by this item is incorporated by reference to
pages 15-17 of the proxy statement filed since the close of the fiscal year
ended June 30, 1995, pursuant to Regulation 14A which involved the election of
directors.
Item 13. Certain Relationships and Related Transactions
----------------------------------------------
The information required by this item is incorporated by reference to
page 18 of the proxy statement filed since the close of the fiscal year ended
June 30, 1995, pursuant to Regulation 14A which involved the election of
directors.
-7-
PART IV
-------
Item 14. Exhibits, Financial Statements, Schedules and Reports on Form 8-K
-----------------------------------------------------------------
A. 1. Financial Statements:
The following consolidated financial statements of The
Procter & Gamble Company and subsidiaries and the report of
independent accountants are incorporated by reference in Part
II, Item 8.
- Report of independent accountants
- Consolidated statement of earnings -- for years ended June
30, 1995, 1994 and 1993
- Consolidated balance sheet -- as of June 30, 1995 and 1994
- Consolidated statement of retained earnings -- for years
ended June 30, 1995, 1994 and 1993
- Consolidated statement of cash flows -- for years ended June
30, 1995, 1994 and 1993
- Notes to consolidated financial statements
2. Financial Statement Schedules:
These schedules are omitted because of the absence of the
conditions under which they are required or because the
information is set forth in the financial statements or notes
thereto.
3. Exhibits:
Exhibit (3-1) -- Amended Articles of Incorporation
(Incorporated by reference to Exhibit (3-1) of
the Company's Annual Report on Form 10-K for
the year ended June 30, 1993).
(3-2) -- Regulations (Incorporated by reference to
Exhibit (3-2) of the Company's Annual Report
on Form 10-K for the year ended June 30,
1993).
Exhibit (4) -- Registrant agrees to file a copy of
documents defining the rights of holders
of long-term debt upon request of the
Commission.
Exhibit (10-1) -- The Procter & Gamble 1992 Stock Plan (as
amended December 14, 1993) which was adopted
by the shareholders at the annual meeting on
October 13, 1992 (Incorporated by reference to
Exhibit (10-1) of the Company's Annual Report
on Form 10-K for the year ended June 30,
1994).
-8-
(10-2) -- The Procter & Gamble 1983 Stock Plan (as
amended May 11, 1993) which was adopted by the
shareholders at the annual meeting on October
11, 1983 (Incorporated by reference to Exhibit
(10-2) of the Company's Annual Report on Form
10-K for the year ended June 30, 1993).
(10-3) -- The Procter & Gamble Executive Group Life
Insurance Policy (each executive officer is
covered for an amount equal to annual salary
plus bonus) (Incorporated by reference to
Exhibit (10-3) of the Company's Annual Report
on Form 10-K for the year ended June 30,
1993).
(10-4) -- Additional Remuneration Plan (as amended
June 12, 1990) which was adopted by the Board
of Directors on April 12, 1949 (Incorporated
by reference to Exhibit (10-4) of the
Company's Annual Report on Form 10-K for the
year ended June 30, 1993).
(10-5) -- The Procter & Gamble Deferred Compensation
Plan for Directors which was adopted by the
Board of Directors on September 9, 1980
(Incorporated by reference to Exhibit (10-5)
of the Company's Annual Report on Form 10-K
for the year ended June 30, 1993).
(10-6) -- The Procter & Gamble Retirement Plan for
Directors which was adopted by the Board of
Directors on December 12, 1989 (Incorporated
by reference to Exhibit (10-6) of the
Company's Annual Report on Form 10-K for the
year ended June 30, 1993).
(10-7) -- The Procter & Gamble Board of Directors
Charitable Gifts Program which was adopted by
the Board of Directors on November 12, 1991
(Incorporated by Reference to Exhibit (10-7)
of the Company's Annual Report on Form 10-K
for the year ended June 30, 1993).
(10-8) -- The Procter & Gamble 1993 Non-Employee
Directors' Stock Plan which was adopted
by the shareholders at the annual meeting
on October 11, 1994 and which was amended
on January 10, 1995, by the Board of
Directors, subject to the ratification by
the shareholders at the annual meeting on
October 10, 1995 (Incorporated by
reference to Appendix A of the proxy
statement filed since the close of the
fiscal year ended June 30, 1995).
-9-
Exhibit (10-9) -- Richardson-Vicks Inc. Special Stock
Equivalent Incentive Plan which was
authorized by the Board of Directors of
The Procter & Gamble Company and adopted
by the Board of Directors of Richardson-
Vicks Inc. on December 31, 1985
(Incorporated by reference to Exhibit
(10-9) of the Company's Annual Report on
Form 10-K for the year ended June 30, 1994).
Exhibit (11) -- Computation of earnings per share.
Exhibit (12) -- Computation of ratio of earnings to fixed
charges.
Exhibit (13) -- Annual Report to Shareholders. (Pages 1-5,
18-37, and 40)
Exhibit (21) -- Subsidiaries of the registrant.
Exhibit (23) -- Consent of Deloitte & Touche LLP.
Exhibit (27) -- Financial Data Schedule.
Exhibit (99-1) -- Directors and Officers Liability Policy
(the "Policy Period" has been extended to
6/30/98).
(99-2) -- Directors and Officers (First) Excess
Liability Policy (the "Policy Period" has been
extended to 6/30/96).
(99-3) -- Directors and Officers (Second) Excess
Liability Policy (the "Policy Period" has been
extended to 6/30/96).
(99-4) -- Directors and Officers (Third) Excess
Liability Policy (the "Policy Period" has been
extended to 6/30/96).
(99-5) -- Directors and Officers (Fourth) Excess
Liability Policy (the "Policy Period" has been
extended to 6/30/96).
(99-6) -- Fiduciary Responsibility Insurance Policy
(the "Policy Period" has been extended to
6/30/96).
The exhibits listed are filed with the Securities and Exchange
Commission but are not included in this booklet. Copies of
these exhibits may be obtained by sending a request to: Linda
D. Rohrer, Assistant Secretary, The Procter & Gamble Company,
P. O. Box 599, Cincinnati, Ohio 45201
B. Reports on Form 8-K:
None.
-10-
SIGNATURES
------------------
Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized in the city of Cincinnati,
State of Ohio.
THE PROCTER & GAMBLE COMPANY
By /S/JOHN E. PEPPER
------------------------------------
John E. Pepper
Chairman of the Board and Chief
Executive
September 12, 1995
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons in the capacities and
on the dates indicated.
Signature Title Date
--------- ----- -----
_____
/s/JOHN E. PEPPER Chairman of the Board and |
----------------- Chief Executive and Director |
(John E. Pepper) (Principal Executive Officer) |
|
/s/ERIK G. NELSON Senior Vice President |
----------------- (Principal Financial Officer) |
(Erik G. Nelson) |
|
/s/EDWIN H. EATON, JR. Vice President and Comptroller |
----------------- (Principal Accounting Officer) |
(Edwin H. Eaton, Jr.) September 12, 1995
|
|
----------------- Director |
(David M. Abshire) |
|
/s/EDWIN L. ARTZT |
----------------- Director |
(Edwin L. Artzt) |
|
/s/NORMAN R. AUGUSTINE |
----------------- Director |
(Norman R. Augustine) ____|
-11-
Signature Title Date
--------- ----- -----
_____
|
/s/DONALD R. BEALL |
------------------ Director |
(Donald R. Beall) |
|
/s/GORDON F. BRUNNER |
------------------ Director |
(Gordon F. Brunner) |
|
/s/RICHARD B. CHENEY |
------------------ Director |
(Richard B. Cheney) |
|
/s/HARALD EINSMANN |
------------------ Director |
(Harald Einsmann) |
|
/s/RICHARD J. FERRIS |
------------------ Director |
(Richard J. Ferris) |
|
/s/JOSEPH T. GORMAN |
------------------ Director September 12, 1995
(Joseph T. Gorman) |
|
/s/DURK I. JAGER |
------------------ Director |
(Durk I. Jager) |
|
/s/JERRY R. JUNKINS |
------------------ Director |
(Jerry R. Junkins) |
|
/s/CHARLES R. LEE |
------------------ Director |
(Charles R. Lee) |
|
/s/LYNN M. MARTIN |
----------------- Director |
(Lynn M. Martin) ____|
-12-
Signature Title Date
--------- ----- -----
_____
/s/JOHN F. SMITH, JR. |
--------------------- Director |
(John F. Smith, Jr.) |
|
/s/RALPH SNYDERMAN |
--------------------- Director |
(Ralph Snyderman) September 12, 1995
|
/s/ROBERT D. STOREY |
--------------------- Director |
(Robert D. Storey) |
|
/s/MARINA v.N. WHITMAN |
--------------------- Director |
(Marina v.N. Whitman) ____|
-13-
EXHIBIT INDEX
--------------
Exhibit (3-1) -- Amended Articles of Incorporation (Incorporated by
reference to Exhibit (3-1) of the Company's Annual
Report on Form 10-K for the year ended June 30,
1993).
(3-2) -- Regulations (Incorporated by reference to Exhibit
(3-2) of the Company's Annual Report on Form 10-K
for the year ended June 30, 1993).
Exhibit (4) -- Registrant agrees to file a copy of documents
defining the rights of holders of long-term debt
upon request of the Commission.
Exhibit (10-1) -- The Procter & Gamble 1992 Stock Plan (as amended
December 14, 1993) which was adopted by the
shareholders at the annual meeting on October 13,
1992 (Incorporated by reference to Exhibit (10-1)
of the Company's Annual Report on Form 10-K for the
year ended June 30, 1994).
(10-2) -- The Procter & Gamble 1983 Stock Plan (as amended
May 11, 1993) which was adopted by the shareholders
at the annual meeting on October 11, 1983
(Incorporated by reference to Exhibit (10-2) of the
Company's Annual Report on Form 10-K for the year
ended June 30, 1993).
(10-3) -- The Procter & Gamble Executive Group Life
Insurance Policy (each executive officer is covered
for an amount equal to annual salary plus bonus)
(Incorporated by reference to Exhibit (10-3) of the
Company's Annual Report on Form 10-K for the year
ended June 30, 1993).
(10-4) -- Additional Remuneration Plan (as amended June 12,
1990) which was adopted by the Board of Directors
on April 12, 1949 (Incorporated by reference to
Exhibit (10-4) of the Company's Annual Report on
Form 10-K for the year ended June 30, 1993).
(10-5) -- The Procter & Gamble Deferred Compensation Plan
for Directors which was adopted by the Board of
Directors on September 9, 1980 (Incorporated by
reference to Exhibit (10-5) of the Company's Annual
Report on Form 10-K for the year ended June 30,
1993).
(10-6) -- The Procter & Gamble Retirement Plan for Directors
which was adopted by the Board of Directors on
December 12, 1989 (Incorporated by reference to
Exhibit (10-6) of the Company's Annual Report on
Form 10-K for the year ended June 30, 1993).
-14-
Exhibit (10-7) -- The Procter & Gamble Board of Directors Charitable
Gifts Program which was adopted by the Board of
Directors on November 12, 1991 (Incorporated by
Reference to Exhibit (10-7) of the Company's Annual
Report on Form 10-K for the year ended June 30,
1993).
(10-8) -- The Procter & Gamble 1993 Non-Employee Directors'
Stock Plan which was adopted by the shareholders at
the annual meeting on October 11, 1994 and which
was amended on January 10, 1995, by the Board of
Directors, subject to the ratification by the
shareholders at the annual meeting on October 10,
1995 (Incorporated by reference to Appendix A of
the proxy statement filed since the close of the
fiscal year ended June 30, 1995).
(10-9) -- Richardson-Vicks Inc. Special Stock Equivalent
Incentive Plan which was authorized by the Board of
Directors of the Procter & Gamble Company and
adopted by the Board of Directors of Richardson-
Vicks Inc. on December 31, 1985 (Incorporated by
Reference to Exhibit (10-9) of the Company's Annual
Report on Form 10-K for the year ended June 30,
1994).
Exhibit (11) -- Computation of earnings per share.
Exhibit (12) -- Computation of ratio of earnings to fixed charges.
Exhibit (13) -- Annual Report to Shareholders. (Pages 1-5, 18-37
and 40)
Exhibit (21) -- Subsidiaries of the registrant.
Exhibit (23) -- Consent of Deloitte & Touche LLP.
Exhibit (27) -- Financial Data Schedule.
Exhibit (99-1) -- Directors and Officers Liability Policy (the
"Policy Period" has been extended to 6/30/98).
(99-2) -- Directors and Officers (First) Excess Liability
Policy (the "Policy Period" has been extended to
6/30/96).
(99-3) -- Directors and Officers (Second) Excess Liability
Policy (the "Policy Period" has been extended to
6/30/96).
(99-4) -- Directors and Officers (Third) Excess Liability
Policy (the "Policy Period" has been extended to
6/30/96).
(99-5) -- Directors and Officers (Fourth) Excess Liability
Policy (the "Policy Period" has been extended to
6/30/96).
(99-6) -- Fiduciary Responsibility Insurance Policy (the
"Policy Period" has been extended to 6/30/96).
-15-
EXHIBIT (11)
<TABLE>
<CAPTION>
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
=============================================
Computation of Earnings Per Share
---------------------------------
Dollars and Share Amounts in Millions
Years Ended June 30
--------------------------------------------------
<S> <C> <C> <C> <C> <C>
NET EARNINGS PER SHARE 1991 1992 1993 1994 1995
---------------------- ------ ------ ------ ------ ------
Net Earnings/(Loss) $1,773 $1,872 $ (656) $2,211 $2,645
Deduct preferred stock dividends 78 94 102 102 102
------ ------ ------ ------ ------
Net Earnings/(Loss) Applicable to Common Stock 1,695 1,778 (758) 2,109 2,543
----------------------------------------------
Average number of common shares
outstanding 689.5 677.4 680.4 683.1 686.0
Per Share
---------
Net earnings before prior years' effect
of accounting changes $ 0.25
Prior year effect of accounting changes $(1.36)
Net Earnings/(Loss) per share $ 2.46 $ 2.62 $(1.11) $ 3.09 $ 3.71
NET EARNINGS PER SHARE ASSUMING
FULL DILUTION
-------------------------------
Net Earnings/(Loss) $1,773 $1,872 $ (656) $2,211 $2,645
Deduct differential -- preferred
vs. common dividends 52 60 57 51 45
------ ------ ------ ------ ------
Net Earnings/(Loss) Applicable to Common Stock 1,721 1,812 (713) 2,160 2,600
----------------------------------------------
Average number of common shares
outstanding 689.5 677.4 680.4 683.1 686.0
Add potential effect of:
Exercise of options 7.7 7.5 7.2 6.0 8.5
Conversion of preferred stock 48.0 55.2 54.7 53.9 52.8
------ ------ ------ ------ ------
Average number of common shares
outstanding, assuming full dilution 745.2 740.1 742.3 743.0 747.3
Per Share Assuming full dilution
--------------------------------
Net earnings before prior years' effect
of accounting changes $ 0.29
Prior year effect of accounting changes $(1.25)
Net Earnings/(Loss) $ 2.31 $ 2.45 $(0.96) $ 2.91 $ 3.48
</TABLE>
EXHIBIT (12)
<TABLE>
<CAPTION>
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
=============================================
Computation of Ratio of Earnings to Fixed Charges
-------------------------------------------------
Millions of Dollars
Years Ended June 30
-------------------------------------------------
1991 1992 1993 1994 1995
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
EARNINGS AS DEFINED
-------------------
Earnings from operations before income taxes
after eliminating undistributed earnings
of 20% to 50% owned affiliates $2,652 $2,870 $ 294 $3,307 $4,022
Fixed charges excluding capitalized interest 435 584 631 569 571
------ ------ ------ ------ ------
TOTAL EARNINGS, AS DEFINED $3,087 $3,454 $ 925 $3,876 $4,593
====== ====== ====== ====== ======
FIXED CHARGES, AS DEFINED
-------------------------
Interest expense $ 395 $ 510 $ 552 $ 482 $ 488
1/3 of rental expense 40 74 79 87 83
------ ------ ------ ------ ------
435 584 $ 631 $ 569 $ 571
Capitalized interest 17 25 25 19 23
------ ------ ------ ------ ------
TOTAL FIXED CHARGES, AS DEFINED $ 452 $ 609 $ 656 $ 588 $ 594
====== ====== ====== ====== ======
RATIO OF EARNINGS TO FIXED CHARGES 6.8 5.7 1.4 6.6 7.7
</TABLE>
Exhibit 13
----------
Annual Report to Shareholders. (Pages 1-5, 18-37, and 40)
TO OUR SHAREHOLDERS
PROCTER & GAMBLE'S CONTINUED FOCUS ON
DELIVERING CONSUMER VALUE LED TO
ACCELERATED GROWTH IN 1994/95.
Good value is the foundation of our business. It builds consumer loyalty to
P&G brands - and brand loyalty builds market leadership. That's why value
is a permanent, fundamental strategy at Procter & Gamble.
Our commitment to the essentials of good value has never been
stronger. We are providing superior products at a competitive price, and
we're doing that by staying focused on the basics: continuous product
innovation and relentless cost control.
As a result of this focus, 1994/95 was an extraordinary year for the
Company and its shareholders. Net earnings for fiscal year 1994/95 achieved
a record level of $2.6 billion, with earnings per share of $3.71, up 20%
versus year ago.
HIGHLIGHTS OF THE YEAR<F1>
- NET EARNINGS were $2.7 billion, up 17%, over earnings of $2.3 billion
in 1993/94. This compares with an average annual earnings growth rate of
10% over the previous five years.
- EARNINGS PER SHARE were $3.78, up 17%.
- AFTER-TAX PROFIT MARGIN was 8.1%. This is the highest level in 45
years.
- UNIT VOLUME grew 10%. This compares to average annual volume growth of
6% over the previous five years.
- NET SALES of $33.4 billion were up 10%.
- CASH FLOW from operations was $3.6 billion. Over the past five years,
cash flow has increased at an average annual rate of 15%.
- DIVIDENDS INCREASED 13% to $1.40 per share. Beginning with the August
1995 dividend, the annual dividend rate will be raised an additional 14% to
$1.60 per share, marking the 40th consecutive year of increased dividend
payments.
- RETURN ON EQUITY was 23.4% - the highest level in 45 years.
<F1>These highlights exclude the following unusual items: the $50 million
charge against 1994/95 net earnings to cover costs associated with the
Kobe, Japan earthquake, and the $102 million charge against 1993/94 net
earnings related to two interest rate swaps.
(Picture of John Pepper, Chairman of the Board and Chief Executive; Ed
Artzt, Chairman of the Executive Committee of the Board; and Durk
Jager, President and Chief Operating Officer.)
1
BROAD-BASED GROWTH ACROSS THE REGIONS
- NORTH AMERICA - the United States and Canada - is in good shape. Unit
volume for the region increased 6%.
The principal contributors to U.S. volume growth were Laundry, Hair
Care and Tissue and Towel. In Laundry, the Company's new color protection
technology helped Tide
(Caption in second paragraph stating "1994/95 WAS AN EXTRAORDINARY YEAR
FOR THE COMPANY AND ITS SHAREHOLDERS.")
and Cheer build P&G's total U.S. Laundry volume to a record level.
Hair Care volume in the U.S. was up 11% behind strong consumer
acceptance of Pantene Pro-V and new products, packages and marketing
programs on Vidal Sassoon, Pert Plus and Head & Shoulders shampoos. And the
Tissue and Towel businesses grew behind Bounty's Extra Durable and Fun
Prints and Charmin Ultra.
Canada's volume grew 6%, tracking closely with performance in the U.S.
The greatest volume gains came from Tide laundry detergent and Pantene Pro-
V. The first time introductions of Bounty towels and Folgers coffee are off
to a strong start.
(Picture of P&G Products - Pantene Pro-V, Ariel, Pampers Uni and Tide)
- EUROPE, MIDDLE EAST AND AFRICA recorded strong growth, with unit
volume up 15%.
Europe, like the U.S., experienced strong market share growth in
Laundry Detergents, Paper and Hair Care. The top brand performers included
Ariel Futur, a new compact, high performance laundry detergent.
Pampers also had an excellent year in Europe, reaching an all-time
high share despite the introduction of new competitive brands. Alldays
Pantyliners strengthened Always' leadership across the entire region.
Pantene Pro-V led the continued growth of the European Hair Care business.
Eastern Europe was a dynamic area of growth for the Company,
increasing share in all core categories. The most significant gains were in
Laundry, Hair Care, Feminine Protection and Diapers.
- ASIA recorded 24% volume growth led by excellent progress in China and
India.
China remained the fastest-growing business in Asia, with China's
largest gains in Hair Care and Laundry. Rejoice shampoo increased its
market leadership and, supported by the national expansion of Tide and
Ariel, P&G's Laundry detergent volume tripled in the last year.
In India, the success of Ariel Supersoaker was an important
contributor to P&G's growing business in this huge market.
1995 has been a tremendously challenging year for P&G's
2
Japanese organization, which managed to build the business despite the
ravaging effects of the Kobe earthquake.
Our Japan Technical Center and Headquarters on Kobe Island was
damaged, manufacturing lines at our Akashi paper plant were disrupted and
many retailers and distributors shut down.
Our Japanese organization overcame these obstacles, returning the
Akashi plant to full production within a month after the earthquake,
working with distributors and retailers to restore distribution, and moving
back into the Japan Technical Center in June. Even in the midst of this
recovery effort, Japan increased volume 7% for the fiscal year - an
achievement that is a real tribute to the dedication and capability
(Caption in second paragraph stating "AS THIS YEAR'S BROAD-BASED GROWTH
DEMONSTRATES, P&G'S VALUE STRATEGIES ARE WORKING.")
of the men and women of our Japanese organization.
- Latin America had a very good year, despite the difficulties of the
Mexican peso crisis. Unit volume was up 6% with especially strong increases
in Brazil, Peru and Argentina.
In Brazil, Pampers Uni - P&G's economy-priced diaper - scored a solid
success with consumers. Two years ago, prior to the introduction of Uni,
P&G's diaper share in Brazil was 13%. Since then, Pampers' share has
tripled, retaining the number one position in a market that has grown five-
fold.
Results in Mexico were good, particularly in the face of the nearly
50% devaluation of the peso and the resulting impact on the Mexican
economy.
P&G's business could have been severely affected by the financial
effect of this situation and the associated decline in consumer purchasing
power. But our Mexican organization worked side-by-side with government
officials, suppliers and customers to navigate their way through the
crisis. As a result of their outstanding work, the Mexican business fully
offset the earnings impact of the peso devaluation.
VALUE STRATEGIES ARE WORKING
As this year's broad-based growth demonstrates, P&G's value strategies are
working.
We are building consumer loyalty to our brands throughout the world
with superior products at competitive prices. The resulting growth in our
business is contributing directly to better value for our shareholders. In
fact, total shareholder return, which averaged 17% over the
3
(Caption at top of page stating "VOLUME GROWTH, DELIVERED BY INNOVATION
AND LOWER PRICES, IS AN IMPORTANT CONTRIBUTOR TO HIGHER EARNINGS.")
previous five years, was 38% in 1994/95.
The key to maintaining our current level of growth is to stay focused
on delivering better value. First and foremost, this means continuously
innovating to provide superior products. Ariel Futur, Pantene Pro-V and
carezyme color protection technology are good examples.
Competitive prices are also critical. This is true in every part of
the world - in developing and developed markets alike.
- ON A WORLDWIDE BASIS, WE HAVE REDUCED PRICES on many of our products
while also building margins and improving overall product performance.
Since 1992/93, list prices (excluding coffee) have declined $1 billion.
This price reduction largely reflects the move to value pricing, as we
have eliminated inefficient promotion costs by rolling them into lower list
prices. Through this structural change, we have been able to significantly
reduce the net price consumers pay for our products.
In addition to price reductions on established brands, we are also
introducing economy-priced brands in markets where consumer purchasing
power is most restricted. Pampers Uni in Latin America is a good example,
and there are others.
In Eastern Europe, the Company's Feminine Protection business in
Poland is up six-fold behind the introduction of Always Classic, a lower-
priced feminine protection pad. And in India, we've tripled our Bar Soap
volume with new Camay Popular - an economy-priced version of Camay.
Whether we're reducing prices on established brands or introducing
new, economy-priced products, the strategy is the same: to offer superior
performance at a competitive price. And the strategy is working: in
1994/95, nearly three-fourths of P&G's global categories worldwide
maintained or grew market share.
BETTER VALUE FOR CONSUMERS - AND HIGHER EARNINGS FOR P&G
Volume growth, driven by innovation and lower prices, is an important
contributor to higher earnings. An essential element of this has been sharp
cost control throughout the organization - which we have pursued
aggressively for the past several years.
For example, Product Supply - P&G's purchasing, engineering,
manufacturing and distribution organizations - has led a breakthrough
effort to reduce the total delivered costs of our products. Their goal,
established in 1991, was to hold these costs flat on a per case basis for
four years.
They have exceeded this goal, not only offsetting inflation and the
cost of product improvements, but actually reducing costs by over $1 per
case, versus the 1990/91 base. This equates to approximately $1.6 billion
in savings, further enhancing our ability to price competitively while
building margins.
- THE WORLDWIDE PLANT CONSOLIDATION AND ORGANIZATION RESTRUCTURING
announced in 1993 has also contributed to effective cost control. We
committed to save at least $500 million after tax per year by 1995/96. We
have already achieved $400 million or 80% of that total in less than two
years.
As with total delivered cost reductions, these savings have allowed us
to price competitively, to increase research and development spending, and
to improve profit margins.
In short, P&G brands are a better value for consumers and are more
profitable at the same time. As a result, P&G has
4
delivered volume and earnings growth well above historical averages and the
highest profit margins in 45 years.
P&G PEOPLE DELIVER ACCELERATED GROWTH
As always, the Company's ability to deliver this kind of breakthrough
performance comes from the strength and commitment of our people.
The quality and depth of the men and women building our business today
are unprecedented. We can see this strength in the way our Company
responded to extraordinary challenges in 1994/95 - recovering from the
earthquake in Japan, responding to the peso crisis in Mexico, and winning
against fierce competition in every part of the world.
We are stronger today than we've ever been and we are well positioned
to build on this strength in the years ahead.
Respectfully,
/s/EDWIN L. ARTZT
Edwin L. Artzt
Chairman of the Executive Committee of the Board
(Retired Chairman of the Board and Chief Executive - July 1, 1995)
/s/JOHN E. PEPPER
John E. Pepper
Chairman of the Board and Chief Executive
/s/DURK I. JAGER
Durk I. Jager
President and Chief Operating Officer
August 10, 1995
MANAGEMENT CHANGES
On July 1, 1995, Edwin L. Artzt retired as chairman of the board and chief
executive after more than 41 years of service with Procter & Gamble. John
E. Pepper assumed responsibility as chairman of the board and chief
executive and Durk I. Jager assumed the newly created position of president
and chief operating officer.
"We have top-flight people to step up and sustain the momentum of this
business," said Artzt. "John Pepper, along with Durk Jager and the newly
appointed team under both of them, will provide strong leadership for the
Company into the 21st century."
Mr. Artzt continues to serve as a director of the Company and,
effective July 1, became chairman of the board's Executive Committee,
succeeding John G. Smale, who retired from the board.
"John Smale served Procter & Gamble with great distinction for more
than 42 years," said Artzt. "He is an extraordinary leader who has guided
the company's rapid growth and globalization. We will miss his involvement
in the business."
5
FINANCIAL REVIEW
MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS: 1995 COMPARED TO 1994
Worldwide net earnings were $2,645 million, a 20% increase over year ago,
including a $50 million after-tax charge for incremental costs associated
with the January earthquake in Japan. Net earnings for the prior year were
$2,211 million, including a $102 million after-tax charge related to two
interest rate swap contracts. Excluding the unusual items in both periods,
net earnings increased 17%.
(Bar graph showing Net Earnings (Billions of Dollars) and Net Margin.
1991 Net Earnings $1.773 billion and Net Margin 6.6%; 1992 Net Earnings
$1.872 billion and Net Margin 6.4%; 1993<F1> Net Earnings $2.015 billion
and Net Margin 6.6%; 1994 Net Earnings $2.211 billion and Net Margin
7.3%; and 1995 Net Earnings $2.645 billion and Net Margin 7.9%.)
<F1> Excluding the effect of restructuring ($1,746 million) and the
prior years' effect of accounting changes ($925 million).
Worldwide net sales for the year increased 10% to $33,434 million.
This sales increase reflects year-to-year unit volume growth of 10%, with
acquisitions contributing approximately 2%. More favorable foreign exchange
rates positively impacted net sales by 2%, but the effect was offset by
lower pricing in certain markets.
Years Ended June 30, 1995 1994 1993<F1>
--------------------------------------------------------
Gross Margin 41.3% 42.7% 41.9%
Marketing, Administration
and Other/Sales 28.8% 30.9% 31.5%
Operating Margin 12.5% 11.8% 10.4%
Net Earnings Margin 7.9% 7.3% 6.6%
<F1> Excluding the effect of restructuring and prior years' effect of
accounting changes.
The decline in gross margin from 42.7% to 41.3% is primarily due to
higher green coffee bean costs, net of related pricing. Increased research
and development costs and higher raw material prices, most importantly
pulp, more than offset the incremental benefits of restructuring activities
and other cost reduction programs. The Company's margin trends are also
affected by pricing policies. Since fiscal year 1993, the Company's value
pricing initiative has reduced list prices by approximately $1 billion
(excluding coffee).
Marketing, administrative and other expenses were 28.8% of sales, down
from 30.9% in the prior year. This reflects the benefit of continued cost
control efforts, as well as an incremental benefit from restructuring
actions.
(Bar graph showing Sales (Billions of Dollars), Operating Income
(Billions of Dollars) and Operating Margin. 1993<F1> Sales $30.4
billion, Operating Income $3.2 billion and Operating Margin 10.4%; 1994
Sales $30.3 billion, Operating Income $3.6 billion and Operating Margin
11.8%; and 1995 Sales $33.4 billion, Operating Income $4.2 billion and
Operating Margin 12.5%.)
<F1> Excluding the effect of restructuring ($2,705 million pre-tax)
18
The Procter & Gamble Company and Subsidiaries
Consolidated Operating Results - Net Sales
-----------------------------------------------------
(Millions of Dollars) 1995 1994 1993
-----------------------------------------------------
North America $16,213 $15,147 $15,100
Europe, Middle East
and Africa 11,019 9,739 10,336
Asia 3,619 3,134 2,775
Latin America 2,184 2,256 1,990
Corporate 399 20 232
-----------------------------------------------------
Total 33,434 30,296 30,433
Consolidated Operating Results - Net Earnings
-----------------------------------------------------
(Millions of Dollars) 1995 1994 1993
-----------------------------------------------------
North America $1,871 $1,710 $1,500
Europe, Middle East
and Africa 687 563 494
Asia 203 145 161
Latin America 215 145 107
Corporate (331) (352) (247)
-----------------------------------------------------
Total 2,645 2,211 2,015<F1>
<F1> Excludes a charge for restructuring: North America - $1,223; Europe,
Middle East and Africa - $342; Asia - $53; Latin America - $50; and
Corporate - $78; Total - $1,746 and prior years' effect of accounting
changes of $925.
Other income of $309 million includes a $77 million pre-tax charge
related to the Kobe Japan earthquake. The prior year amount of $248 million
contains a $157 million pre-tax charge related to two interest rate swap
contracts.
Net earnings margin increased from 7.3% in 1994 to 7.9% in 1995,
including the effect of unusual items in both years, reflecting continued
emphasis on cost control and volume growth.
The following discussion of segment results reflects the new segment
presentation included in Note 12 to the Consolidated Financial Statements.
NORTH AMERICA
Net sales for the North American region, which includes the United States
and Canada, increased 7% to $16,213 million on 6% unit volume growth.
The Paper segment led the unit volume growth, with double digit gains
in the Tissue and Towel category. This growth was partly offset by a year-
to-year volume decline in Diapers. Fourth quarter results indicated modest
Diaper volume recovery, reflecting new initiatives. The Laundry and
Cleaning and Beauty Care segments also experienced unit volume growth above
the region average. The gains were driven by the Laundry and Hair Care
categories. Unit volume growth in the Food and Beverage segment was
hampered by the continued effect on coffee of the crop freezes in Brazil.
Unit volume growth in the Snacks and Juice categories mitigated this
impact. Unit volume in the Health Care segment, which represents
approximately 5% of the North American volume, increased 1% year-to-year.
North American net earnings increased 9% to $1,871 million, reflecting
volume growth and continued cost control benefits. The net profit margin
was 11.5% compared to 11.3% in the prior year. Most segments experienced
double-digit net earnings growth, led by the Beauty Care segment. The net
earnings of the Paper segment were negatively impacted by higher pulp
prices and lower pricing on diapers. The Health Care segment results were
affected by continued investment in research and development and reduced
pricing.
EUROPE, MIDDLE EAST AND AFRICA
The Europe, Middle East and Africa region sales were $11,019 million, a 13%
increase.
Unit volume grew 15% during the year, including 5% due to
acquisitions. The Laundry and Cleaning segment led the unit volume growth.
Favorable exchange rate effects increased sales by 6%, but this was offset
by lower pricing in certain markets.
Net earnings increased 22% to $687 million. This reflects a net profit
margin of 6.2% compared to 5.8% in the prior year. This growth is due to
continued cost control efforts, incremental benefits associated with
restructuring actions, and favorable product mix effects.
ASIA
Net sales for Asia were $3,619 million, up 15%. Unit volume grew 24%.
Favorable foreign exchange rate movements had a positive 7% impact on
sales,
19
MANAGEMENT'S DISCUSSION AND ANALYSIS
although lower pricing and mix effects limited sales growth. Double digit
unit volume growth was achieved in all business segments, led by Laundry
and Cleaning. The Beauty Care segment also experienced significant unit
volume gains, on the strength of the Hair Care category.
Net earnings in Asia increased 40% to $203 million. Net profit margins
have grown from 4.6% in the prior year to 5.6% in 1995. This increase
results from strong unit volume growth, combined with continued emphasis on
cost control. The Hair Care and Feminine Protection categories continue to
drive the region's growth and profitability.
LATIN AMERICA
Unit volume in Latin America grew 6%. Unfavorable foreign exchange rate
impacts more than offset the effect of positive pricing actions and volume
growth, resulting in a 3% sales decline to $2,184 million. The Paper
segment led the unit volume increase, importantly in the Diaper category,
reflecting the introduction of Pampers Uni.
Net earnings for the region were $215 million, a 48% increase from the
prior year. This earnings growth was achieved despite difficult economic
conditions in Mexico and Venezuela and is primarily attributable to
aggressive cost increase recovery. In addition, risk management activities
neutralized the effect of foreign exchange rate changes. The net profit
margin increased to 9.8% from 6.4%. Significant net earnings growth was
achieved in the Diaper and Hair Care categories.
CORPORATE
Corporate items include interest income and expense, segment eliminations,
and other general corporate income and expense.
WORLDWIDE BUSINESS SEGMENTS
The following table supplements the information provided in Note 12,
Segment Information, to provide 1995 unit volume growth for the Company's
business segments.
UNIT VOLUME GROWTH IN 1995
Laundry and Cleaning 7%
Paper 18%
Beauty Care 12%
Food and Beverage 7%
Health Care 3%
FINANCIAL CONDITION: JUNE 30, 1995
COMPARED TO JUNE 30, 1994
Cash flow from operations was $3,568 million in 1995, continuing to provide
the primary source of funds to finance operating needs and capital
expenditures. Cash and cash equivalents declined $345 million, primarily
due to increased capital spending. Debt repayments, net of additions, were
$490 million, and dividends of $1,062 million were paid. Cash outflows for
acquisitions, net of proceeds from asset sales, were $313.
(Bar graph showing CUMULATIVE OPERATING CASH FLOWS (Billions of
Dollars). 1991 - $2.0 billion; 1992 - $5.0 billion; 1993 - $8.4
billion; 1994 - $12.0 billion; and 1995 $15.6 billion.)
During the year, the Company initiated a share repurchase program to
mitigate the dilutive impact of management compensation programs. Under the
repurchase program, the Company is authorized to purchase up to 5 million
shares annually. During the current year, purchases were $114 million.
20
The Company has additional sources of liquidity available. During the
year, the Company filed a shelf registration statement for $500 million of
debt securities and warrants. Securities pursuant to this registration
statement may be offered as determined appropriate in light of market
conditions. In addition, the Company has the ability to issue commercial
paper at favorable rates if necessary to meet short-term liquidity needs.
Capital expenditures were $2,146 million in 1995, compared to $1,841
million in 1994. Capital expenditures are expected to remain at about this
level in 1996.
Dividends of $1.40 per share were paid in the current year, up from
$1.24 per share in the prior year. For the coming year, the annual dividend
rate will increase to $1.60 per share. This will mark the 40th consecutive
year of increased common share dividend payments.
The Company has announced a program to divest certain minor, non-
strategic brands over the coming year in order to focus organizational
resources on the Company's core businesses. These brands account for less
than one-half of one percent of the Company's annual sales. This program is
not expected to have a material effect on the Company's results of
operations, financial condition, or cash flows.
RESTRUCTURING RESERVE STATUS
In 1993, the restructuring provision includes a reserve of $2,402 million
to cover a worldwide restructuring effort to consolidate manufacturing
systems and reduce overhead costs. The primary elements of this reserve
were costs related to fixed asset disposals and separation-related costs
(86% of the total).
Original Balance Balance
(Millions of Dollars) Reserve 6/30/94 Charges 6/30/95
Separation-
related costs<F1> $ 965 $ 596 $ 227 $ 369
Disposals of
Fixed Assets 1,109 960 363 597
Other<F2> 328 227 33 194
-------------------------------------------------------------------
2,402 1,783 623 1,160
<F1>Includes separation allowances and related benefits, out placement
services, and personnel relocation costs.
<F2>Includes closing, environmental remediation and contract termination
costs for sites shut down or divested, offset by proceeds from asset
sales. No cost element within this category exceeds 5% of the total
reserve.
Execution of the restructuring program continues to be on track. The
cost of completing the program is expected to approximate the original
estimate. As anticipated, charges for the disposal of fixed assets will lag
behind spending for separation-related programs. About two-thirds of the
sites and production modules to be closed have been announced in order to
provide advance notice to employees.
Benefits continue to be realized from the restructuring program.
Fiscal year 1995 incremental savings are estimated at $240 million after-
tax, bringing cumulative restructuring savings to approximately 80% of the
$500 million after-tax objective established in June 1993. These amounts
reflect estimated gross savings, which have been offset to some degree by
lower pricing and other actions to build the business.
RESULTS OF OPERATIONS: 1994 COMPARED TO 1993
Worldwide net earnings in 1994 were $2,211 million, including a $102
million after-tax charge related to two interest rate swap contracts. In
the previous year, an after-tax loss of $656 million was recorded due to
two unusual items: restructuring reserves totaling $1,746 million after-tax
and the prior years' effects of two accounting changes amounting to $925
million. Excluding these unusual items in both years, net earnings would
have been $2,313 million in 1994, up 15% over earnings of $2,015 million in
the previous year.
Net sales were $30,296 million, about even with sales of $30,433
million in the previous year. The growth in unit volume increased net sales
by 5%, but was offset by less favorable foreign exchange rates, 4%, and the
divestiture of the pulp and 100% juice businesses and lower selling prices,
1%.
Gross margin was 42.7%, which compares with 41.9% for the preceding
year. Restructuring savings contributed to this increase, as plant sourcing
savings from lower depreciation and enrollment reductions began to be
realized.
Marketing, administrative and other operating expenses were 30.9% of
sales, down from 31.5% in the previous year which can be ascribed entirely
to
21
MANAGEMENT'S DISCUSSION AND ANALYSIS
restructuring savings, primarily from enrollment reductions.
Interest expense decreased $70 million from the previous year due to
lower borrowing rates and lower debt outstanding. Other income decreased
$197 million from the prior year, reflecting the $157 million loss on two
interest swaps in 1994 and $41 million one-time profit in 1993 from the
sale of businesses.
The effective tax rate was 33.9% for 1994, which compares with 22.9%
for 1993. The 1993 restructuring reserve reduced pre-tax earnings
significantly and accentuated the percent impact of certain cost elements
not tax affected at the 34% U.S. statutory rate. Excluding the
restructuring reserve, the 1993 effective tax rate would have been 34.0%.
In the following year-to-year comparison of segment results, 1993
earnings have been adjusted upward to exclude the impact of restructuring
reserves.
NORTH AMERICA
Net sales and unit volume for the region were flat from year-to-year,
reflecting the divestiture of the pulp and 100% juice businesses and, to a
lesser degree, lower pricing. Excluding the impact on sales of the
businesses divested, unit volume growth was offset by pricing actions.
North American after-tax earnings were $1,710 million, up 14% versus
the previous year. Net profit margins improved to a record 11.3%, with
restructuring benefits and other cost improvements contributing to the
increase over the previous year's 9.9% margin. Such restructuring benefits
provided the ability to neutralize the short-term impact of the Company's
value pricing initiative.
EUROPE, MIDDLE EAST AND AFRICA
Net sales for Europe, Middle East and Africa were $9,739 million, a decline
of 6% due to unfavorable exchange rate movements. Unit volume increased 6%.
Net earnings increased 14% to $563 million.
ASIA
Sales in Asia grew 13% to $3,134 million. Unit volume increased 20%. Net
earnings for the segment were $145 million, a decline of 10%, reflecting
the increased investment committed to new business initiatives.
LATIN AMERICA
Latin American unit volume increased 10% as sales grew to $2,256 million, a
13% increase. Net earnings increased 36% to $145 million, reflecting
aggressive cost cutting efforts.
FINANCIAL CONDITION: JUNE 30, 1994
COMPARED TO JUNE 30, 1993
Cash and cash equivalents totaled $2,373 million, an increase of $51
million from the previous year. Cash flow from operating activities reached
a record $3,649 million up $311 million over the previous year, despite the
negative cash impact of executing the projects contained in the 1993
restructuring reserves. Charges in 1994 to the restructuring reserve
established in June 1993 totaled $600 million of which $360 million
impacted cash, primarily due to separation costs. Increased earnings and
continuing reductions in working capital were key factors in offsetting
these charges.
Total debt excluding exchange effects decreased $664 million from the
previous year-end, reflecting reductions in both short term and long term
debt.
Regarding investing activities, capital expenditures were $1,841
million and $1,911 million for 1994 and 1993, respectively.
Dividends of $1.24 per common share were paid during the past year, up
from $1.10 and $1.025 per share in the previous two years. In July 1994,
the Company announced a 13% increase in the annual rate from $1.24 to $1.40
per common share, effective with the quarterly dividend paid in mid-August
to shareholders of record on July 22, 1994.
22
FINANCIAL STATEMENTS
RESPONSIBILITY FOR THE FINANCIAL STATEMENTS
Company management is responsible for the preparation, accuracy and
integrity of the financial statements and other financial information
included in this Annual Report. This responsibility includes preparing the
statements in accordance with generally accepted accounting principles and
necessarily includes estimates that are based on management's best
judgments.
To help insure the accuracy and integrity of Company financial data,
management maintains internal controls which are designed to provide
reasonable assurance that transactions are executed as authorized and
accurately recorded and that assets are properly safeguarded. These
controls are monitored by an extensive and ongoing program of internal
audits. It is essential for all Company employees to conduct their business
affairs in keeping with the highest ethical standards as outlined in our
code of conduct, "P&G, Your Personal Responsibility." Careful selection of
employees, and appropriate divisions of responsibility, also help us to
achieve our control objectives.
The financial statements have been audited by the Company's
independent public accountants, Deloitte & Touche LLP. Their report is also
shown on this page.
The Board of Directors, acting through its Audit Committee composed
entirely of outside directors, oversees the adequacy of the Company's
control environment. The Audit Committee meets periodically with
representatives of Deloitte & Touche LLP, and internal financial
management to review accounting, control, auditing and financial reporting
matters. The independent auditors and the internal auditors also have full
and free access to meet privately with the Committee.
/S/JOHN E. PEPPER /S/ERIK G. NELSON
John E. Pepper Erik G. Nelson
Chairman of the Board Chief Financial Officer
and Chief Executive
---------------------------------------------------------------------------
REPORT OF INDEPENDENT ACCOUNTANTS
DELOITTE & 250 East Fifth Street
TOUCHE LLP Cincinnati, Ohio 45202
To the Board of Directors and Shareholders of The Procter & Gamble Company:
We have audited the accompanying consolidated balance sheets of The Procter
& Gamble Company and subsidiaries as of June 30, 1995 and 1994 and the
related consolidated statements of earnings, retained earnings, and cash
flows for each of the three years in the period ended June 30, 1995. These
financial statements are the responsibility of the companies' 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 audits 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 financial position of the companies
at June 30, 1995 and 1994 and the results of their operations and their
cash flows for each of the three years in the period ended June 30, 1995,
in conformity with generally accepted accounting principles.
As discussed in Note 1 to the financial statements, effective July 1,
1992, the Company changed its methods of accounting for other post
retirement benefits and income taxes.
/S/DELOITTE & TOUCHE LLP
August 10, 1995
23
The Procter & Gamble Company and Subsidiaries
<TABLE>
CONSOLIDATED STATEMENT OF EARNINGS
<CAPTION>
Years Ended June 30 (Millions of Dollars Except Per Share Amounts) 1995 1994 1993
--------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
NET SALES $33,434 $30,296 $30,433
Cost of products sold 19,623 17,355 17,683
Marketing, administrative, and other operating expenses 9,632 9,361 9,589
Provision for restructuring -- -- 2,705
--------------------------------------------------------------------------------------------------
OPERATING INCOME 4,179 3,580 456
Interest expense 488 482 552
Other income, net 309 248 445
--------------------------------------------------------------------------------------------------
EARNINGS BEFORE INCOME TAXES & PRIOR YEARS'
EFFECT OF ACCOUNTING CHANGES 4,000 3,346 349
Income taxes 1,355 1,135 80
--------------------------------------------------------------------------------------------------
NET EARNINGS BEFORE PRIOR YEARS' EFFECT OF
ACCOUNTING CHANGES 2,645 2,211 269
Prior years' effect of accounting changes -- -- (925)
---------------------------------------------------------------------------------------------------
NET EARNINGS/(LOSS) $ 2,645 $ 2,211 $ (656)
---------------------------------------------------------------------------------------------------
PER COMMON SHARE:
NET EARNINGS BEFORE PRIOR YEARS' EFFECT OF
ACCOUNTING CHANGES $ 3.71 $ 3.09 $ 0.25
Prior years' effect of accounting changes -- -- $ (1.36)
NET EARNINGS/(LOSS) $ 3.71 $ 3.09 $ (1.11)
NET EARNINGS/(LOSS) ASSUMING FULL DILUTION $ 3.48 $ 2.91 $ (0.96)
DIVIDENDS $ 1.40 $ 1.24 $ 1.10
AVERAGE SHARES OUTSTANDING (IN MILLIONS) 686.0 683.1 680.4
--------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
CONSOLIDATED STATEMENT OF RETAINED EARNINGS
<CAPTION>
Years Ended June 30 (Millions of Dollars) 1995 1994 1993
<S> <C> <C> <C>
BALANCE AT BEGINNING OF YEAR $7,496 $6,248 $7,810
Net earnings/(loss) 2,645 2,211 (656)
Dividends to shareholders
Common (960) (847) (748)
Preferred, net of related tax benefit (102) (102) (102)
Excess of cost over the stated value of treasury shares (114) (14) (56)
--------------------------------------------------------------------------------------------------
BALANCE AT END OF YEAR $8,965 $7,496 $6,248
--------------------------------------------------------------------------------------------------
<FN>
See accompanying Notes to Consolidated Financial Statements.
</FN>
</TABLE>
24
The Procter & Gamble Company and Subsidiaries
<TABLE>
CONSOLIDATED BALANCE SHEET
<CAPTION>
June 30 (Millions of Dollars) 1995 1994
---------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 2,028 $ 2,373
Investment securities 150 283
Accounts receivable 3,562 3,115
Inventories 3,453 2,877
Deferred income taxes 804 716
Prepaid expenses and other current assets 845 624
---------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 10,842 9,988
PROPERTY, PLANT, AND EQUIPMENT 11,026 10,024
GOODWILL AND OTHER INTANGIBLE ASSETS 4,572 3,754
OTHER ASSETS 1,685 1,769
---------------------------------------------------------------------------------
TOTAL ASSETS $28,125 $25,535
---------------------------------------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable - trade $ 2,891 $ 2,604
Accounts payable - other 725 660
Accrued liabilities 3,494 2,961
Taxes payable 568 440
Debt due within one year 970 1,375
---------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 8,648 8,040
LONG-TERM DEBT 5,161 4,980
OTHER LIABILITIES 3,196 3,336
DEFERRED INCOME TAXES 531 347
---------------------------------------------------------------------------------
TOTAL LIABILITIES 17,536 16,703
---------------------------------------------------------------------------------
SHAREHOLDERS' EQUITY
Convertible Class A preferred stock 1,913 1,942
Common stock - shares outstanding: 1995 - 686,574,055;
1994 - 684,348,359 687 684
Additional paid-in capital 693 560
Currency translation adjustments 65 (63)
Reserve for employee stock ownership plan debt retirement (1,734) (1,787)
Retained earnings 8,965 7,496
---------------------------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 10,589 8,832
---------------------------------------------------------------------------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $28,125 $25,535
---------------------------------------------------------------------------------
<FN>
See accompanying Notes to Consolidated Financial Statements.
</FN>
</TABLE>
25
The Procter & Gamble Company and Subsidiaries
<TABLE>
CONSOLIDATED STATEMENT OF CASH FLOWS
<CAPTION>
Years Ended June 30 (Millions of Dollars) 1995 1994 1993
---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR $ 2,373 $ 2,322 $ 1,776
---------------------------------------------------------------------------------------------------
OPERATING ACTIVITIES
Net earnings before prior years' effect of accounting changes 2,645 2,211 269
Provision for restructuring -- -- 2,705
Depreciation and amortization 1,253 1,134 1,140
Deferred income taxes 181 196 (1,065)
Change in accounts receivable (225) 40 (9)
Change in inventories (401) 25 97
Increase in payables and accrued liabilities 435 98 55
Change in other liabilities (157) (353) 67
Other (163) 298 79
---------------------------------------------------------------------------------------------------
TOTAL OPERATING ACTIVITIES 3,568 3,649 3,338
---------------------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Capital expenditures (2,146) (1,841) (1,911)
Proceeds from asset sales 310 105 725
Acquisitions (623) (295) (138)
Change in investment securities 96 23 (306)
---------------------------------------------------------------------------------------------------
TOTAL INVESTING ACTIVITIES (2,363) (2,008) (1,630)
---------------------------------------------------------------------------------------------------
FINANCING ACTIVITIES
Dividends to shareholders (1,062) (949) (850)
Reduction of short-term debt (429) (281) (277)
Additions to long-term debt 449 414 1,001
Reduction of long-term debt (510) (797) (939)
Proceeds from stock options 66 36 77
Purchase of treasury shares (114) (14) (55)
---------------------------------------------------------------------------------------------------
TOTAL FINANCING ACTIVITIES (1,600) (1,591) (1,043)
---------------------------------------------------------------------------------------------------
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND
CASH EQUIVALENTS 50 1 (119)
---------------------------------------------------------------------------------------------------
CHANGE IN CASH AND CASH EQUIVALENTS (345) 51 546
---------------------------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF YEAR $ 2,028 $ 2,373 $ 2,322
---------------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE
Cash payments for:
Interest, net of amount capitalized $ 444 $ 487 $ 592
Income taxes 1,047 1,225 1,035
Non-cash transactions:
Reductions in employee stock ownership plan debt
guaranteed by the Company 53 49 46
Liabilities assumed in acquisitions 575 65 83
Conversion of preferred to common shares 29 27 20
---------------------------------------------------------------------------------------------------
<FN>
See accompanying Notes to Consolidated Financial Statements.
</FN>
</TABLE>
26
The Procter & Gamble Company and Subsidiaries
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Millions of dollars except per share amounts)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PRESENTATION: The consolidated financial statements include The
Procter & Gamble Company and its controlled subsidiaries (the Company).
Investments in companies that are at least 20% to 50% owned and over which
the Company exerts significant influence but does not control the financial
and operating decisions are accounted for by the equity method. These
investments are managed as integral parts of the Company's segment
operations; accordingly, the Company's share of their results is included
in net sales and in earnings for the related segments.
ACCOUNTING CHANGES: Effective July 1, 1992, the Company adopted Statement
of Financial Accounting Standards No. 106, Employers' Accounting for
Postretirement Benefits Other than Pensions. This Statement requires
accrual of postretirement health care and life insurance benefits during an
employee's years of active service rather than on the previous pay-as-you-
go basis during the retirement years.
Effective July 1, 1992, the Company adopted Statement of Financial
Accounting Standards No. 109, Accounting for Income Taxes. This Statement
requires that deferred taxes reflect the impact of temporary differences
between the amounts of assets and liabilities recognized for financial
reporting purposes and amounts recognized for tax purposes, using currently
enacted tax laws and rates.
CURRENCY TRANSLATION: For most subsidiaries outside the U.S., the local
currency is the functional currency and translation adjustments are
accumulated in a separate component of shareholders' equity. For
subsidiaries whose economic environment is highly inflationary, the U.S.
dollar is the functional currency, and gains or losses that result from
remeasurement are included in earnings. In addition, transactional foreign
currency impacts are included in earnings. The losses included in net
earnings were $38 in 1995, $27 in 1994, and $42 in 1993.
CASH EQUIVALENTS: Highly liquid investments with maturities of three months
or less when purchased are considered to be cash equivalents.
DERIVATIVE INSTRUMENTS: The Company enters into derivative instruments to
manage exposure to fluctuations in interest rates, foreign exchange rates,
and certain raw material prices.
The interest rate differential on interest rate swap contracts used to
hedge underlying debt obligations is reflected as an adjustment to interest
expense over the life of the swaps. Written options are marked-to-market on
a current basis through income.
Gains and losses related to qualifying hedges of foreign currency firm
commitments or anticipated transactions are recognized in income when the
hedged transaction occurs. Gains or losses on currency swaps or foreign
currency denominated debt that qualify as hedges of net assets in foreign
subsidiaries are offset against the translation reflected in shareholders'
equity. Other foreign exchange contracts are marked-to-market on a current
basis through income.
Commodity instruments are accounted for as hedges, with any realized
gains or losses included in inventory, to the extent they are designated
and are effective as hedges of anticipated commodity purchases.
INVENTORY VALUATION: Inventories are valued at cost, which is not in excess
of current market. Cost is primarily determined by the average cost method,
with a lesser portion determined by the last-in, first-out method. The
replacement cost of LIFO inventories exceeds carrying value by
approximately $225.
GOODWILL AND OTHER INTANGIBLE ASSETS: The cost of intangible assets is
amortized, principally on a straight-line basis, over the estimated periods
benefited (not exceeding 40 years). The average remaining life is 33 years.
The realizability of goodwill and other intangibles is evaluated
periodically as events or circumstances indicate a possible inability to
recover their carrying amount. Such evaluation is based on various
analyses, including cash flow and profitability projections that
incorporate the impact on existing
27
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Millions of dollars except per share amounts)
Company businesses. The analyses necessarily involve significant management
judgment to evaluate the capacity of an acquired business to perform within
projections. Historically, the Company has generated sufficient returns
from acquired businesses to recover the cost of the intangible assets.
PROPERTY, PLANT AND EQUIPMENT: Property, plant and equipment are recorded
at cost reduced by accumulated depreciation. Depreciation expense is
provided based on historical cost and estimated useful lives. The Company
uses the straight-line method for calculating depreciation.
OTHER OPERATING EXPENSES: Research and development costs are charged to
earnings as incurred and were $1,257 in 1995, $1,059 in 1994 and $956 in
1993. Advertising costs are charged to earnings as incurred and amounted to
$3,284 in 1995, $2,996 in 1994, and $2,973 in 1993.
NET EARNINGS PER COMMON SHARE: Net earnings less preferred dividends (net
of related tax benefits) are divided by the average number of common shares
outstanding during the year to derive net earnings per common share. Fully
diluted earnings per share are calculated using the treasury stock method
to give effect to stock options and convertible preferred stock and include
an adjustment for preferred stock dividend requirements.
RECLASSIFICATIONS: Certain reclassifications of prior years' amounts have
been made to conform with the current year presentation.
2. PROVISION FOR RESTRUCTURING
Restructuring provisions totaling $2,705, which reduced after-tax earnings
by $1,746 or $2.57 per share, were established in fiscal 1993. A charge of
$2,402 covered a worldwide restructuring effort to consolidate
manufacturing systems and reduce overhead costs, and a $303 charge related
to the divestiture of the 100% juice business.
The restructuring provisions were determined based on estimates
prepared at the time the restructuring actions were approved by management
and the Board of Directors. The cost of completing the restructuring
programs is expected to approximate the original estimates.
3. ACQUISITIONS
In the first quarter of fiscal year 1995, the Company completed the
purchase acquisition of the European tissue business of Vereinigte
Papierwerke Schickedanz AG and the prestige fragrance business of Giorgio
Beverly Hills, Inc. These acquisitions had an aggregate purchase price of
$598. Other acquisitions accounted for as purchases totaled $25, $295, and
$138 in 1995, 1994 and 1993, respectively.
4. BALANCE SHEET INFORMATION
June 30 1995 1994
-------------------------------------------------------------------
INVENTORIES
Raw materials $ 1,315 $ 1,087
Work in process 247 213
Finished products 1,891 1,577
--------------------------------------------------------------------
3,453 2,877
PROPERTY, PLANT AND EQUIPMENT
Buildings 3,364 3,027
Machinery and equipment 13,734 12,249
Land 641 620
--------------------------------------------------------------------
17,739 15,896
Less accumulated depreciation 6,713 5,872
--------------------------------------------------------------------
11,026 10,024
GOODWILL AND OTHER
INTANGIBLE ASSETS
Goodwill 4,474 3,564
Trademarks and other
intangible assets 1,008 946
--------------------------------------------------------------------
5,482 4,510
Less accumulated amortization 910 756
--------------------------------------------------------------------
4,572 3,754
ACCRUED LIABILITIES
Marketing expenses 1,135 842
Compensation expenses 419 393
Restructuring reserves 828 870
Other 1,112 856
--------------------------------------------------------------------
3,494 2,961
OTHER LIABILITIES
Postretirement benefits 1,402 1,432
Restructuring reserves 466 1,035
Pension benefits 777 495
Other 551 374
--------------------------------------------------------------------
3,196 3,336
28
The Procter & Gamble Company and Subsidiaries
5. LONG-TERM DEBT
The following presents the carrying value of outstanding long-term debt,
including ESOP debt guaranteed by the Company:
June 30 1995 1994
------------------------------------------------------------------
6.85% notes due 1997 $ 200 $ 200
9 1/2% notes due 1998 200 200
8% notes due 2003 200 200
8% notes due 2024 200 --
8.7% notes due 2001 175 175
7 3/8% debentures due 2023 175 175
10 7/8% Canadian dollar
bonds due 2001 146 145
5.2% notes due 1995 150 150
9 5/8% notes due 2001 150 150
8 1/2% notes due 2009 149 149
7.1% notes due 1994 -- 200
6 1/4% notes due 1995 -- 200
Commercial paper 922 765
9.36% ESOP debentures due 2021 1,000 1,000
8.12%-8.33% serial ESOP notes,
due 1995-2004 734 787
Other 1,254 978
-------------------------------------------------------------------
5,655 5,474
Less current portion (494) (494)
-------------------------------------------------------------------
Total long-term debt 5,161 4,980
The following payments are required during the next five fiscal years:
1996 - $494; 1997 - $552; 1998 - $365; 1999 - $335 and 2000 - $273.
The fair value of the underlying long-term debt, excluding the current
portion, was $5,662 and $5,205 at June 30, 1995 and 1994, respectively. At
June 30, 1995 and 1994, the weighted average interest rate of short-term
borrowings was 9.5% and 6.5%, respectively. The increase in 1995 is the
result of more short-term borrowings in developing countries and reduced
short-term borrowings in the United States. Certain commercial paper
balances have been classified as long term debt based on the Company's
intent and ability to renew the obligations on a long-term basis. The
Company has entered into derivatives that convert these commercial paper
obligations into fixed-rate obligations.
6. RISK MANAGEMENT ACTIVITIES
The Company is exposed to market risk from changes in interest rates,
currency exchange rates, and certain commodity prices. To manage the
volatility relating to these exposures, the Company enters into various
derivative transactions pursuant to the Company's policies in areas such as
counterparty exposure and hedging practices. Positions are monitored using
techniques such as market value and sensitivity analyses. The Company does
not hold or issue derivative financial instruments for trading purposes and
is not a party to leveraged instruments.
INTEREST RATE MANAGEMENT
The Company's policy is to manage interest cost using a mix of fixed and
variable rate debt. To manage this mix in a cost efficient manner, the
Company enters into interest rate swaps, in which the Company agrees to
exchange, at specified intervals, the difference between fixed and variable
interest amounts calculated by reference to an agreed-upon notional
principal amount.
The following table presents information for outstanding interest rate
swaps.
1995 1994
------------- --------------
1995- Beyond 1994- Beyond
June 30 2000 2000 1999 1999
------------------------------------------------------------------
Pay Fixed:
Notional amount $845 $914 $593 $881
Weighted average
receive rate 4.9% 5.8% 5.4% 6.2%
Weighted average
pay rate 5.9% 7.0% 6.1% 7.8%
Pay Variable:
Notional amount $535 $171 $504 $171
Weighted average
receive rate 6.3% 9.3% 6.2% 9.2%
Weighted average
pay rate 6.8% 7.7% 5.7% 6.0%
Options and warrants may also be used to manage the Company's overall
risk profile. The notional amounts of such instruments have declined to
$300 at June 30, 1995 from $1,394 at June 30, 1994,
29
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Millions of dollars except per share amounts)
reflecting actions by management to reduce the exposure to written options.
The following table presents information for all interest rate
instruments. The notional amount does not necessarily represent amounts
exchanged by the parties and, therefore, is not a direct measure of the
exposure of the Company through its use of derivatives. The fair value
approximates the cost to settle the outstanding contracts. The carrying
value includes the net amount due to counterparties under swap contracts,
currency translation associated with currency interest rate swaps, and any
marked-to-market value of instruments. The effect of a weaker dollar
represents the majority of the fair values and carrying values presented
below. Because the currency interest rate swaps are designated as a hedge
of the Company's related foreign net asset exposures, the currency effects
are reflected in the currency translation adjustment section of
shareholders' equity, offsetting a portion of the translation of the net
assets.
June 30 1995 1994
-------------------------------------------
Notional amount $2,765 $3,543
Fair value-Loss 373 239
Carrying value 298 193
Unrecognized Loss 75 46
Although derivatives are an integral part of the Company's interest
rate management, their incremental effect on interest expense for 1995 and
1994 was insignificant.
Based on the Company's overall variable rate
exposure at June 30, 1995, including interest rate instruments, a 300 basis
point interest rate change would not have a material effect on earnings.
CURRENCY RATE MANAGEMENT
The primary purpose of the Company's foreign currency hedging activities is
to protect against the volatility associated with local currency purchase
transactions. Corporate policy prescribes the range of hedging activity
into which the subsidiary operations may enter. To execute this policy, the
Company primarily utilizes forward exchange contracts and options with
durations of generally less than 12 months. Because of the decentralized
management of these activities, the incremental impact is not determinable.
However, any change in the fair value of the instruments generally is
offset by a corresponding change in the related exposure.
In addition, the Company enters into foreign currency swaps to hedge
intercompany financing transactions and purchases foreign currency options
to hedge against the effect of exchange rate fluctuations on royalties and
foreign source income.
Currency instruments outstanding at June 30 are as follows:
Notional Carrying Fair
June 30 Amount Value Value
---------------------------------------------------------
1995
Forward Contracts $3,423 $ (8) $(20)
Purchased Options 2,419 61 38
Currency Swaps 863 (140) (140)
1994
Forward Contracts $1,873 $ (10) $ (3)
Purchased Options 1,138 10 14
Currency Swaps 646 (62) (62)
The aggregate notional amount of currency instruments outstanding at
June 30, 1995 increased over the prior year primarily due to expanded risk
management activities in response to exchange rate movements during the
third quarter. The impact of a weaker dollar at year end also increased the
notional value of instruments in dollars. The major currency exposures
hedged by the Company at June 30, 1995 include the German mark ($2,465
notional amount), U.S. dollar ($824 notional amount), British pound
sterling ($811 notional amount), Belgian franc ($631 notional amount), and
French franc ($535 notional amount).
Currency exposure related to the net assets of subsidiaries is managed
primarily through local currency financing and foreign currency denominated
financing instruments entered into by the parent company. At June 30, 1995,
the Company's total foreign net assets were $7,263. Of this, approximately
20% is denominated in the German mark. The Japanese yen,
30
The Procter & Gamble Company and Subsidiaries
Canadian dollar, British pound, Italian lira, and Mexican peso each
represent between approximately 5% and 10% of the total. No other
individual country represents more than 5% of the total. The Company has
designated $1,386 of foreign currency instruments as hedges of its net
asset exposure in certain foreign subsidiaries. These hedges offset $115 of
translation effects reflected in shareholders' equity for the year ended
June 30, 1995.
COMMODITY PRICE MANAGEMENT
Because market prices of certain raw materials depend on a number of
unpredictable factors, such as weather, the Company's policy is to manage
the resulting volatility using commodities contracts. At June 30, 1995 and
1994, the Company had commodities contracts outstanding, with a fair value
of $(5) and $11, respectively.
7. FINANCIAL INSTRUMENTS
Financial instruments include cash equivalents, investment securities, risk
management instruments, and certain other assets and liabilities.
INVESTMENTS
Pursuant to FASB Statement No. 115, the Company has classified its readily
marketable debt and equity securities, the majority of which are current
assets, as available for sale. The fair value of $241 approximates the
original cost.
CREDIT RISK
Credit risk arising from the inability of a counterparty to meet the terms
of the Company's financial instruments contracts is generally limited to
the amounts, if any, by which the counterparties' obligations exceed the
obligations of the Company. It is the Company's policy to only enter into
financial instruments with a diversity of creditworthy counterparties.
Therefore, the Company does not expect to incur significant credit losses
on financial instruments.
MARKET VALUATION METHODS
The estimated fair values of financial instruments, including risk
management instruments, have been determined using available market
information and valuation methodologies, primarily discounted cash flow
analysis. Such estimates require considerable judgment in interpreting
market data, and changes in assumptions or estimation methods may
significantly affect the fair value estimates. The carrying value of
financial instruments, excluding risk management instruments which are
discussed in Note 6, approximates fair value at June 30, 1995 and 1994.
8. SHAREHOLDERS' EQUITY
(Share Amounts in Thousands)
PREFERRED STOCK
The Company has 600,000 shares of authorized Class A preferred stock
(Series A and Series B), with a stated value of $1 per share.
Series A shares are held by the Employee Stock Ownership Plan. Each
issued share has a liquidation value equal to the issue price of $27.50 per
share. The shares are convertible at the option of the holder into one
share of the Company's common stock.
June 30 1995 1994 1993
---------------------------------------------------------
Series A:
Outstanding, June 30 33,218 34,269 35,246
Converted to common
shares and retired 1,051 977 626
---------------------------------------------------------
There were 19,142 shares of series B shares outstanding for all
periods, held by the Employee Stock Ownership Plan. Each share has a
liquidation value equal to the issuance price of $52.24 per share and is
convertible at the option of the holder into one share of the Company's
common stock.
At June 30, 1995 there were 200,000 shares of authorized and unissued
Class B preferred stock (nonvoting) with a stated value of $1 per share.
31
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Millions of dollars except per share amounts)
COMMON STOCK
The Company has authorized 2,000,000 shares of common stock with a stated
value of $1 per share. Changes in outstanding shares were as follows:
1995 1994 1993
---------------------------------------------------------------
Shares outstanding,
July 1 684,348 681,754 678,794
Purchased for
treasury (1,708) (255) (1,401)
Issued for
employee plans 3,934 2,849 4,361
---------------------------------------------------------------
Shares outstanding,
June 30 686,574 684,348 681,754
Treasury shares were 54,829, 54,501, and 55,521 at June 30, 1995, 1994
and 1993, respectively.
Under the Company's stock option plans, options have been granted to
key employees and directors to purchase common shares of the Company within
a ten-year term at the market value on the dates of the grants. Stock
option activity was as follows:
1995 1994 1993
--------------------------------------------------------------
OPTIONS
Outstanding, July 1 30,556 28,497 27,822
Granted 3,926 3,880 4,279
Exercised (2,639) (1,673) (3,380)
Canceled (151) (148) (224)
--------------------------------------------------------------
Outstanding,
June 30 31,692 30,556 28,497
Exercisable,
June 30 27,777 26,685 24,255
Available For Grant 9,755 6,418 3,095
AVERAGE PRICE
Outstanding,
June 30 42.72 38.23 34.73
Granted 66.21 56.81 51.56
Exercised 25.18 21.35 21.08
-------------------------------------------------------------
ADDITIONAL PAID-IN CAPITAL
Increases in additional paid-in capital resulted from the conversion of
preferred shares, and the excess amount realized over the stated value of
common shares issued pursuant to stock option and remuneration plans. This
amounted to $133, $83 and $112 for the years ended June 30, 1995, 1994 and
1993, respectively.
CURRENCY TRANSLATION ADJUSTMENTS
Amounts credited/(charged) to shareholders' equity were $128, $36 and
($211) during the years ended June 30, 1995, 1994 and 1993, including tax
effects of $73, $30 and ($1).
9. RETIREMENT PLANS
The Company maintains defined contribution profit sharing plans which
provide retirement benefits to a significant number of employees. These are
funded through the Procter & Gamble Profit Sharing Trust and Employee Stock
Ownership Plan and by cash contributions from the Company.
The Procter & Gamble PST and ESOP is the largest plan and covers most
employees in the United States. Annual credits to participants' accounts
are based on individual base salaries and years of service. The total
credited to all accounts does not exceed 15% of salaries and wages of
participants. Within this plan, a leveraged employee stock ownership trust
borrowed $1,000 in 1989 and the Company has guaranteed this debt. The
proceeds were used to buy Series A ESOP Convertible Class A Preferred Stock
and shares are allocated each year to individual accounts.
Amounts credited to these plans were:
Years Ended June 30 1995 1994 1993
------------------------------------------------------------
Preferred shares of P&G stock
allocated at market value $155 $117 $111
Profit sharing expense
(cash contributions) 112 157 167
------------------------------------------------------------
Benefits earned by
participants 267 274 278
Principal and interest payments of $117 on the borrowed funds are paid
each fiscal year by the trust from dividends on preferred shares and cash
payments as follows:
32
The Procter & Gamble Company and Subsidiaries
Preferred Company Total Debt
Years Ended June 30 Dividends Payment Service
---------------------------------------------------------------------------
1995
Principal $53 $-- $ 53
Interest 16 48 64
---------------------------------------------------------------------------
Total 69 48 117
1994
Principal $49 $-- $ 49
Interest 22 46 68
---------------------------------------------------------------------------
Total 71 46 117
1993
Principal $46 $-- $ 46
Interest 26 45 71
---------------------------------------------------------------------------
Total 72 45 117
PENSION PLANS
Other employees, primarily outside the U.S., are covered by local pension
or retirement plans.
OBLIGATIONS AND ASSETS
June 30 1995 1994
---------------------------------------------------------------
Vested benefit obligation $ 1,250 $ 979
Non-vested benefit obligation 178 146
Accumulated benefit obligation 1,428 1,125
Effect of projected salaries 375 363
---------------------------------------------------------------
Projected benefit obligation 1,803 1,488
Plan assets at market value (890) (806)
---------------------------------------------------------------
Unfunded pension benefit obligation 913 682
Unrecognized:
Net transition obligation (37) (30)
Prior service cost (45) (45)
Net losses (30) (90)
---------------------------------------------------------------
Accrued pension costs 801 517
Funded plan assets are held in restricted trusts or foundations that
are segregated from the assets of the Company. The assets are in stocks,
bonds, insurance contracts and other investments within the limits
prescribed by local laws, and in line with local investment practices for
pension and retirement plans. Funding policies vary by country and consider
such factors as actuarial reports, tax regulations and local practices. In
the U.S., plan assets exceeded the projected benefit obligation by $21 in
1995 and $2 in 1994.
PENSION EXPENSE
Years Ended June 30 1995 1994 1993
-------------------------------------------------------------------
Benefits earned during the year $ 89 $ 84 $ 66
Interest on projected
benefit obligation 116 97 86
Actual return on plan assets (74) (63) (71)
Net amortization and other 10 3 15
-------------------------------------------------------------------
Pension expense 141 121 96
The actuarial assumptions vary by country and consider such factors as
economic conditions and nature of plan assets. The following table presents
a summary of assumptions reflecting an average for the Company:
ASSUMPTIONS
Years Ended June 30 1995 1994 1993
-------------------------------------------------------------------
Long-term rate of return
on plan assets 9% 9% 9%
Increase in compensation 6% 6% 6%
Discount rate 7% 7.4% 8%
-------------------------------------------------------------------
OTHER RETIREE BENEFITS
The Company provides certain health care and life insurance benefits for
substantially all domestic employees who become eligible for these benefits
when they meet minimum age and service requirements. Generally, the health
care plans require contributions from retirees and pay a stated percentage
of expenses reduced by deductibles and other coverages. Retiree
contributions change annually in line with medical cost trends.
In fiscal year 1991, the Procter & Gamble PST and ESOP borrowed $1,000
which the Company has guaranteed and is reflected as debt on the Company's
balance sheet. The proceeds were used to buy shares of Series B ESOP
Convertible Class A Preferred Stock for the purpose of partially funding
retiree medical benefits. The fair values of the shares at June 30, 1995
and 1994 were $1,376 and $1,022. There were also other employee benefit
trust assets of $65 and $40 on June 30, 1995 and 1994. Interest payments on
the loan amounted to $94 for each of the years ended 1995, 1994 and 1993,
with $79 funded each year by preferred stock dividends and the remainder by
Company
33
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Millions of dollars except per share amounts)
cash payments. The preferred stock dividends were considered a reduction of
benefit expense.
Effective July 1, 1992, the Company implemented SFAS No. 106. The
effect of the accounting change on prior years, or accumulated benefit
obligation, was $1,422, or $900 after tax, at July 1, 1992.
ACCUMULATED BENEFIT OBLIGATION AND NET LIABILITY
June 30 1995 1994
-------------------------------------------------------------------
Retirees $ 611 $ 512
Employees eligible to retire 133 126
Other active employees 681 603
-------------------------------------------------------------------
Accumulated benefit
obligation 1,425 1,241
Unrecognized gain/(loss) 458 293
Plan assets at market value (440) (61)
-------------------------------------------------------------------
Net liability 1,443 1,473
BENEFIT EXPENSE
Years Ended June 30 1995 1994 1993
-------------------------------------------------------------------
Benefits earned during
the year $ 43 $ 60 $ 59
Interest on accumulated
benefit obligation 98 116 113
Actual return on plan assets (364) (21) --
Net amortization and other 241 (79) (90)
-------------------------------------------------------------------
Sub-total 18 76 82
Dividends on plan's
preferred stock (79) (79) (79)
-------------------------------------------------------------------
Benefit expense (61) (3) 3
ASSUMPTIONS
Years Ended June 30 1995 1994 1993
-------------------------------------------------------------------
Discount rate 7.5% 8% 8%
Long term rate of return
on plan assets 9% 9% 9%
Initial health care cost
trend rate* 10.5% 11% 12.7%
--------------------------------------------------------------------
* Assumed for 1995 and 1994 to decline gradually to 5% in 2006 and
thereafter. Assumed for 1993 to decline gradually to 6% in 2008 and
thereafter.
The pre-tax effect of a 1% increase in the assumed health care cost
trend rate would increase the accumulated benefit obligations at June 30,
1995 and 1994 by approximately $200 and $185, along with increases of $24
and $33 in the 1995 and 1994 annual costs.
10. INCOME TAXES
Effective July 1, 1992, the Company adopted SFAS No. 109, Accounting for
Income Taxes. The cumulative effect of the accounting change in prior years
was $25 of added tax expense.
EARNINGS BEFORE INCOME TAXES
Years Ended June 30 1995 1994 1993
--------------------------------------------------------------------
United States $2,683 $2,216 $ 318
Foreign 1,317 1,130 31
--------------------------------------------------------------------
Total 4,000 3,346 349
INCOME TAX PROVISIONS
Years Ended June 30 1995 1994 1993
--------------------------------------------------------------------
Current tax expense
U.S. Federal $ 718 $ 574 $ 635
Foreign 399 298 432
U.S. State & Local 57 67 78
--------------------------------------------------------------------
1,174 939 1,145
Deferred tax expense
U.S. Federal 124 118 (489)
Foreign & Other 57 78 (576)
--------------------------------------------------------------------
181 196 (1,065)
Total provision for
income taxes 1,355 1,135 80
Taxes credited to Shareholders' Equity for the years ended June 30,
1995 and 1994 were $144 and $91. Taxes generally are provided currently on
undistributed earnings of foreign subsidiaries, except when those earnings
are considered to be reinvested indefinitely ($3,047 at June 30, 1995).
The effective income tax rates, excluding prior years' effect of
accounting changes were 33.9%, 33.9% and 22.9% in 1995, 1994 and 1993
compared to the U.S. statutory rate of 35% for 1995 and 1994, and 34% for
1993. In 1993, the effective rate was increased 4.2% by state and local
taxes and 5.1% by goodwill and other acquisition effects, and decreased
15.0% by the impact of international rates and credits.
34
The Procter & Gamble Company and Subsidiaries
DEFERRED INCOME TAX ASSETS AND LIABILITIES
June 30 1995 1994
------------------------------------------------------------------
Current deferred tax assets:
Restructuring reserve $ 293 $ 274
Other 511 442
------------------------------------------------------------------
Total current deferred tax assets 804 716
------------------------------------------------------------------
Non-current deferred tax assets:
Restructuring reserve $ 170 $ 364
Postretirement benefits 550 540
Loss carryforwards 276 282
------------------------------------------------------------------
996 1,186
Valuation allowance (263) (262)
------------------------------------------------------------------
733 924
Non-current deferred tax liabilities:
Depreciation (1,164) (1,173)
Other (100) (98)
------------------------------------------------------------------
(1,264) (1,271)
------------------------------------------------------------------
Net non-current deferred income taxes (531) (347)
11. COMMITMENTS AND
CONTINGENCIES
The Company has various purchase commitments for materials, supplies and
items of permanent investment incidental to the ordinary conduct of
business. In the aggregate, such commitments are not at prices in excess of
current market.
The Company is subject to various lawsuits and claims with respect to
matters such as governmental regulations, income taxes and other actions
arising out of the normal course of business. While the effect on future
financial results is not subject to reasonable estimation because
considerable uncertainty exists, in the opinion of management and Company
counsel, the ultimate liabilities resulting from such claims will not
materially affect the consolidated financial position, results of
operations, or cash flows of the Company.
The Company is also subject to contingencies pursuant to environmental
laws and regulations that in the future may require the Company to take
action to correct the effects on the environment of prior manufacturing and
disposal practices. Accrued environmental liabilities for remediation and
closure costs at June 30, 1995 were $113 and, in management's opinion, such
accruals are appropriate based on existing facts and circumstances. Under
the most adverse circumstances, however, this potential liability could be
higher. In the event that future remediation expenditures are in excess of
the amounts accrued, management does not anticipate that they will have a
material adverse effect on the consolidated financial position, results of
operations, or cash flows of the Company. Current year expenditures were
not material.
12. SEGMENT INFORMATION
The Company has changed its segments for financial reporting purposes. All
prior year amounts have been restated to reflect the following changes.
Geographic segments are now aligned into four regions: North America -
including the United States and Canada; Europe - including Europe, Middle
East and Africa; Asia; and Latin America.
Business segments now are aligned as follows:
Laundry and Cleaning - laundry, dishcare, hard surface cleaners and fabric
conditioners. Representative brands include Ariel, Tide, Cascade, Dawn, Mr.
Proper, Downy.
Paper - tissue/towel, feminine protection, and diapers. Representative
brands include Bounty, Charmin, Always, Whisper, Pampers.
Beauty Care - hair care, deodorants, personal cleansing, skin care and
cosmetics and fragrances. Representative brands include Pantene, Vidal
Sassoon, Secret, Safeguard, Olay, Cover Girl.
Food and Beverage - coffee, peanut butter, juice, snacks, shortening and
oil, baking mixes and commercial services. Representative brands include
Folgers, Jif, Sunny Delight, Pringles, Crisco, Duncan Hines.
Health Care - oral care, gastro-intestinal, respiratory care, analgesics
and pharmaceuticals. Representative brands include Crest, Scope, Metamucil,
Vicks, Aleve.
The Company's operations are characterized by interrelated raw
materials and manufacturing facilities and centralized research and staff
functions. Accordingly, separate profit determination by segment is
dependent upon assumptions regarding allocations.
35
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Millions of dollars except per share amounts)
Corporate items include interest income and expense, segment
eliminations, and other general corporate income and expense. Corporate
assets consist primarily of cash and cash equivalents.
<TABLE>
<CAPTION>
GEOGRAPHIC SEGMENTS
Europe,
Middle East
North America and Africa Asia Latin America Corporate Total
---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Sales 1995 $16,213 $11,019 $3,619 $2,184 $ 399 $33,434
1994 15,147 9,739 3,134 2,256 20 30,296
1993 15,100 10,336 2,775 1,990 232 30,433
---------------------------------------------------------------------------------------------------------------------------------
Net Earnings Before 1995 1,871 687 203 215 (331) 2,645
Prior Years' Effect of 1994 1,710 563 145 145 (352) 2,211
Accounting Changes 1993<F1> 1,500 494 161 107 (247) 2,015
---------------------------------------------------------------------------------------------------------------------------------
Identifiable Assets 1995 11,375 7,446 3,311 1,305 4,688 28,125
1994 10,699 5,576 2,690 1,302 5,268 25,535
1993 10,809 5,486 2,375 1,067 5,198 24,935
---------------------------------------------------------------------------------------------------------------------------------
<FN>
<F1>Excludes an after-tax charge for restructuring: North America - $1,223,
Europe, Middle East and Africa - $342, Asia - $53, Latin America - $50, and
Corporate - $78. Total - $1,746.
</FN>
</TABLE>
<TABLE>
<CAPTION>
BUSINESS SEGMENTS
Laundry and Beauty Food and Health
Cleaning Paper Care Beverage Care Corporate Total
----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Sales 1995 $10,224 $9,291 $6,507 $3,988 $3,025 $ 399 $33,434
1994 9,838 8,282 5,912 3,261 2,983 20 30,296
1993 10,013 8,307 5,562 3,343 2,976 232 30,433
----------------------------------------------------------------------------------------------------------------------------------
Earnings Before 1995 1,695 1,131 736 513 360 (435) 4,000
Income Taxes and 1994 1,485 1,085 578 361 358 (521) 3,346
Accounting Changes 1993<F1> 1,404 952 357 240 402 (301) 3,054
----------------------------------------------------------------------------------------------------------------------------------
Identifiable Assets 1995 5,375 7,082 5,511 2,148 3,321 4,688 28,125
1994 4,777 5,521 4,936 2,049 2,984 5,268 25,535
1993 4,453 5,274 5,045 2,190 2,775 5,198 24,935
----------------------------------------------------------------------------------------------------------------------------------
Capital 1995 608 731 341 150 295 21 2,146
Expenditures 1994 590 663 247 136 182 23 1,841
1993 575 741 238 110 176 71 1,911
----------------------------------------------------------------------------------------------------------------------------------
Depreciation 1995 279 500 189 108 144 33 1,253
and 1994 252 435 177 113 131 26 1,134
Amortization 1993 235 403 189 144 110 59 1,140
<FN>
<F1>Excludes a pre-tax charge for restructuring: Laundry and Cleaning -
$559, Paper - $626, Beauty Care - $614, Food and Beverage - $450, Health
Care - $333, and Corporate - $123. Total - $2,705.
</FN>
</TABLE>
(Pie graph showing 1995 Net Sales by Business Segment. Laundry and
Cleaning 31%; Paper 28%; Beauty Care 19%; Food and Beverage 12%;
Health Care 9%; and Corporate 1%.)
36
The Procter & Gamble Company and Subsidiaries
<TABLE>
<CAPTION>
13. QUARTERLY RESULTS (UNAUDITED)
-------------------------------------------------------------------------------------------------
Quarters Ended
---------------------------------------
Total
Sept. 30 Dec. 31 Mar. 31 Jun. 30 Year
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales 1994-95 $8,161 $8,467 $8,312 $8,494 $33,434
1993-94 7,564 7,788 7,441 7,503 30,296
-------------------------------------------------------------------------------------------------
Operating income 1994-95 1,254 1,190 1,057 678 4,179
1993-94 1,085 1,023 923 549 3,580
-------------------------------------------------------------------------------------------------
Net earnings 1994-95 792 750 631 472 2,645
1993-94 670 653 482 406 2,211
-------------------------------------------------------------------------------------------------
Net earnings 1994-95 1.12 1.06 .88 .65 3.71
per common share 1993-94 .95 .92 .66 .56 3.09
-------------------------------------------------------------------------------------------------
Fully diluted net earnings 1994-95 1.05 .99 .81 .63 3.48
per common share 1993-94 .89 .85 .64 .53 2.91
--------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
FINANCIAL HIGHLIGHTS
(Dollars in Millions Except Per Share Amounts) 1995 1994 1993<F1><F2> 1992 1991
--------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Sales 33,434 30,296 30,433 29,362 27,026
Operating Income 4,179 3,580 456 2,867 2,702
Net Earnings/(Loss) 2,645 2,211 (656) 1,872 1,773
Net Earnings/(Loss) per Common Share 3.71 3.09 (1.11) 2.62 2.46
Dividend per Common Share 1.40 1.24 1.10 1.025 .975
Research and Development Expense 1,257 1,059 956 861 786
Advertising Expense 3,284 2,996 2,973 2,693 2,511
Total Assets 28,125 25,535 24,935 24,025 20,468
Long-term Debt 5,161 4,980 5,174 5,223 4,111
Net Earnings Margin 7.9% 7.3% -- 6.4% 6.6%
Cash Flow from Operations 3,568 3,649 3,338 3,025 2,009
Employees 99,200 96,500 103,500 106,000 94,000
--------------------------------------------------------------------------------------------------------
<FN>
<F1>Operating income includes a pre-tax charge totaling $2,705 for
restructuring
<F2>Net earnings and per share earnings include an after-tax charge total
$1,746 or $2.57 per share for restructuring and an after-tax charge of
$925 or $1.36 per share for the prior years' effect of accounting
changes
</FN>
37
The Procter & Gamble Company and Subsidiaries
SHAREHOLDER INFORMATION
</TABLE>
<TABLE>
<CAPTION>
COMMON STOCK PRICE RANGE AND DIVIDENDS
Price Range Dividends
--------------------------------------------------------------- ----------------------
1994-95 1993-94 1994-95 1993-94
--------------------------------------------------------------- ----------------------
Quarter Ended High Low High Low
--------------------------------------------------------------- ----------------------
<S> <C> <C> <C> <C> <C> <C>
September 30 $60.88 $53.13 $53.63 $45.25 $.35 $.31
December 31 64.63 58.25 58.88 46.88 .35 .31
March 31 70.38 60.63 60.00 51.25 .35 .31
June 30 74.25 65.88 58.63 51.75 .35 . 31
</TABLE>
SHAREHOLDER RECORDS
Shareholder records are maintained by the Company. Questions concerning
shareholder accounts, stock transfer or name changes should be directed to
the Shareholder Services Department address shown at right or by calling
1-800-742-6253.
Stock certificates are valuable and should be safeguarded since replacement
takes time and requires a service charge to the shareholder. If a stock
certificate is lost, stolen or destroyed, notify the Shareholder Services
Department promptly.
Please also notify Shareholder Services in writing of any address change.
This will help prevent returned dividend checks and other financial
mailings.
DUPLICATE MAILINGS
Financial reports must be mailed for each separate account unless you
instruct us otherwise. If you wish to help us reduce costs by discontinuing
multiple mailings to your address, please contact Shareholder Services.
SHAREHOLDER INVESTMENT PROGRAM
This programs allows participants to reinvest their dividends and make
optional cash purchases of Procter & Gamble Common Stock directly through
the Program. For a copy of the prospectus, please contact Shareholder
Services.
DIRECT DEPOSIT OF DIVIDENDS
Shareholders of record may have their dividends electronically deposited
into their bank account. If you are interested in this service, please
contact Shareholder Services.
SHAREHOLDERS' MEETING
The next annual meeting of the shareholders will be held on Tuesday,
October 10, 1995, at the Company's General Offices, Two Procter & Gamble
Plaza, Cincinnati, OH 45202.
CORPORATE HEADQUARTERS
The Procter & Gamble Company
P.O. Box 599
Cincinnati, Ohio 45201-0599
TRANSFER AGENT/SHAREHOLDER SERVICES
The Procter & Gamble Company
Shareholder Services Department
P.O. Box 5572
Cincinnati, Ohio 45201-5572
REGISTRAR
PNC Bank, Ohio, N.A.
P.O. Box 1198
Cincinnati, Ohio 45201-1198
EXCHANGE LISTING
New York, Cincinnati, Amsterdam, Paris, Basle, Geneva, Lausanne, Zurich,
Frankfurt, Antwerp, Brussels, Tokyo.
SHAREHOLDERS OF COMMON STOCK
There were 193,066 Common Stock shareholders of record, including
participants in the Shareholder Investment Program, as of July 21, 1995.
FORM 10-K
Beginning in October 1995, shareholders may obtain a copy of the Company's
1995 report to the Securities and Exchange Commission on Form 10-K by
sending a request to Mr. Robert J. Thompson, Manager, Shareholder Services,
at the above Shareholder Services address.
COMPANY INFORMATION
Copies of P&G's global Environmental Report, corporate contributions and
diversity program reports, corporate brochure and fact sheets are available
by writing to Corporate Communications at the Corporate headquarters
address above.
This report printed on recycled paper made from 50% recycled fiber
including 10% post-consumer waste.
40
EXHIBIT (21)
Page 1
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
============================================
Subsidiaries of the Registrant
------------------------------
The Procter & Gamble Company [Ohio]
Anjali Corporation [Delaware]
Kangra Valley Enterprises Ltd. [Delaware]
The Mandwa Company, Inc. [Delaware]
Ramalayam Investments Company [Delaware]
Yamuna Investments Company [Delaware]
Arbora Capital, S.A. [Spain]
Arbora Holding, S.A. [Spain]
Ausonia Higiene, S.L. [Spain]
Ausonia Portuguesa-Productos de Higiene, S.A. [Portugal]
Richvest B.V. [Netherlands]
Cotonificio Medical S.A. [Spain]
Deterperu S.A. [Peru]
Deterperu Industrial S.A. [Peru]
Fabricas de Aceite San Jacinto Limitada S.A. [Peru]
Fisher Nut Company [Ohio]
The Folger Coffee Company [Ohio]
P&G Consultoria E Servicos Ltda. [Brazil]
FPG Oleochemicals Sdn. Bhd. [Malaysia]
Giorgio Beverly Hills, Inc.[Delaware]
Giorgio Beverly Hills (Europe) Ltd. [United Kingdom]
Hostess Coffee Company [Delaware]
Industria de Concentrados Crush Limitada [Uruguay]
Industrias Inextra, S.A. [Colombia]
Inversiones Procter & Gamble de Venezuela, C.A. [Venezuela]
Inversiones Industrias Mammi, C.A. [Venezuela]
Midway Holdings Ltd. [Cayman Islands]
Marcvenca Inversiones, C.A. [Venezuela]
Procter & Gamble de Venezuela, C.A. [Venezuela]
Jetco Chemicals, Inc. [Texas]
Karm, S.A. [Liechtenstein]
Leading Overseas Products Limited [U.K.]
The Malabar Company [Delaware]
Temple Trees [India]
Noxell Corporation [Maryland]
Cover Girl Cosmetics Limited [U.K.]
Cover Girl Magazines, Books & Publishing Limited [U.K.]
Eurocos U.S.A., Inc. [Delaware]
Max Factor & Co. [Delaware]
Noxell (Australia) Pty. Limited [Australia]
Noxell (Barbados) Limited [Barbados]
[ ] Brackets indicate state or country of incorporation and do not form
part of corporate name.
EXHIBIT (21)
Page 2
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
=============================================
Subsidiaries of the Registrant
------------------------------
Noxell (Panama) S.A. [Panama]
Noxell (Thailand) Limited [Thailand]
Noxell de Venezuela, C.A. [Venezuela]
P&G Brands Comercio S.A. [Brazil]
Procter & Gamble do Brasil S.A. [Brazil]
Phebo do Nordeste S/A [Brazil]
P&G Holding B.V. [Netherlands]
Blendax Holland B.V. [Netherlands]
Richardson-Vicks B.V. [Netherlands]
Richardson-Vicks Overseas Finance N.V. [Netherlands Antilles]
Shulton B.V. [Netherlands]
P&G Tissues AG [Switzerland]
Bess Hygiene AG [Switzerland]
Tempo AG [Switzerland]
P&G Tissues B.V. [Netherlands]
Procter & Gamble A.G. [Switzerland]
Betrix (Schweiz) AG [Switzerland]
Detergent Products A.G. [Switzerland]
Modern Industries Company - Dammam [Saudi Arabia]
Modern Industries Company - Jeddah [Saudi Arabia]
Modern Products Company - Jeddah [Saudi Arabia]
Deurocos Cosmetic AG [Switzerland]
Exquisit - Kosmetik GmbH [Germany]
Moroccan Modern Industries [Morocco]
Pantene A.G. [Switzerland]
Procter & Gamble Austria GmbH [Austria]
The Procter & Gamble Company of South Africa (Proprietary) Limited
[S. Africa]
Procter & Gamble South Africa Proprietary Limited [South Africa]
Procter & Gamble Development Company A.G. Glarus [Switzerland]
Procter & Gamble (East Africa) Limited [Kenya]
Procter & Gamble Egypt [Egypt]
Procter & Gamble (Egypt) Industrial and Commercial Company [Egypt]
Procter & Gamble (Egypt) Manufacturing Company [Egypt]
Procter & Gamble Hellas A.E. (Chemical Industries) [Greece]
Procter & Gamble-Hutchison Ltd. [Hong Kong]
Procter & Gamble (Chengdu) Ltd. [People's Republic of China]
Procter & Gamble (China) Ltd. [People's Republic of China]
Procter & Gamble Detergent (Guangzhou) Ltd. [People's Republic of
China]
Procter & Gamble (Guangzhou) Ltd. [People's Republic of China]
Procter & Gamble Lonkey (Guangzhou) Ltd. [People's Republic of
China]
Procter & Gamble Lonkey (Shaoguan) Ltd. [People's Republic of
China]
[ ] Brackets indicate state or country of incorporation and do not form part
of corporate name.
EXHIBIT (21)
Page 3
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
============================================
Subsidiaries of the Registrant
------------------------------
Procter & Gamble Panda Detergent Co. Ltd Beijing [People's Republic
of China]
Procter & Gamble Paper (Guangzhou) Ltd. [People's Republic of
China]
Procter & Gamble Personal Cleansing (Tianjin) Ltd. [People's
Republic of China]
Procter & Gamble Jamaica Ltd. [Jamaica]
The Procter & Gamble Manufacturing Company of Lebanon, S.A.L.[Lebanon]
Procter & Gamble Marketing A.G. [Switzerland]
Procter & Gamble Maroc [Morocco]
Procter & Gamble Nigeria Limited [Nigeria]
Procter & Gamble OY [Finland]
Procter & Gamble Pakistan (Private) Limited [Pakistan]
Procter & Gamble de Panama, S.A. [Panama]
Procter & Gamble (Yemen) Ltd [Yemen]
Societe Immobiliere Les Colombettes, S.A. [Switzerland]
VP-Schickedanz GmbH [Austria]
Procter & Gamble Asia Pacific Ltd. [Hong Kong]
Procter & Gamble Benelux [Belgium]
VP-Schickedanz S.A./N.V. [Belgium]
Procter & Gamble do Brazil, Inc. [Delaware]
Procter & Gamble do Brasil & Cia [Brazil]
The Procter & Gamble Cellulose Company [Delaware]
Procter & Gamble Chile, Inc. [Ohio]
The Procter & Gamble Commercial Company [Ohio]
PROGAM Leasing, Inc. [Puerto Rico]
Procter & Gamble Commercial de Cuba, S.A. [Cuba]
The Procter & Gamble Distributing Company [Ohio]
Procter & Gamble FSC (Barbados) Inc. [Barbados]
Procter & Gamble Foreign Sales Corporation Limited [Jamaica]
Procter & Gamble Eastern Europe, Inc. [Ohio]
Hyginett KFT [Hungary]
Novomoskovskbytkhim [Russia]
Procter & Gamble Czech Republic v.o.s. [Czech Republic]
Procter & Gamble Bulgaria Ltd. [Bulgaria]
Procter & Gamble Hungary Wholesale Trading Partnership (KKT)[Hungary]
Alvorada BT [Hungary]
Beta BT [Hungary]
Carlos BT [Hungary]
Diego BT [Hungary]
Elysee BT [Hungary]
Ferraris BT [Hungary]
Frank BT [Hungary]
[ ] Brackets indicate state or country of incorporation and do not form part
of corporate name.
EXHIBIT (21)
Page 4
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
============================================
Subsidiaries of the Registrant
------------------------------
Helga BT [Hungary]
Olga BT [Hungary]
Pal BT [Hungary]
Stan BT [Hungary]
Varadi BT [Hungary]
Procter & Gamble Kereskedelmi BT [Hungary]
Procter & Gamble Marketing & Commercial Activities d.o.o. [Slovenia]
Procter & Gamble Marketing Latvia Ltd. [Latvia]
Procter & Gamble Marketing Romania SRL [Romania]
Procter & Gamble Manufacturing Romania SRL [Romania]
Procter & Gamble Operations Polska - Spolka Akcyjna [Poland]
Procter & Gamble Poll Ltd. [Poland]
Procter & Gamble Polska Sp. zo.o [Poland]
Procter & Gamble T.O.O. [Russia]
Procter & Gamble Spol. s.r.o. (Ltd) [Slovenia]
Procter & Gamble Ukraine [Ukraine]
Rakona A.S. [Czech Republic]
Procter & Gamble European Technical Center S.A. [Belgium]
Procter & Gamble Far East, Inc. [Ohio]
Max Factor K.K. [Japan]
American Cosmetics K.K. [Japan]
Betrix Japan K.K. [Japan]
Max Factor Hanbai K.K. [Japan]
Procter & Gamble Godrej Private Limited [India]
Procter & Gamble India Holdings, Inc. [Ohio]
Procter & Gamble Bangladesh Private Limited [Bangladesh]
Procter & Gamble Home Products (India) Limited [India]
Procter & Gamble Sri Lanka Private Limited [Sri Lanka]
Procter & Gamble Korea Inc. [Korea]
Procter & Gamble Manufacturing Korea Co. [Korea]
Procter & Gamble NPD, Inc. [Ohio]
Procter & Gamble Taiwan Limited [Taiwan]
Procter & Gamble (Vietnam) Ltd. [Vietnam]
Procter & Gamble FED, Inc. [Delaware]
Procter & Gamble Finance Corporation [Canada]
Procter & Gamble S.A. [France]
Dittmeyer France S.A. [France]
Fonciere des 96 et 104 Avenue Charles de Gaulle [France]
Laboratoire Lachartre SNC [France]
Procter & Gamble Amiens SNC [France]
Procter & Gamble France S.N.C.[France]
Procter & Gamble Hygiene Beaute France SNC [France]
Procter & Gamble Pharmaceuticals France S.A. [France]
[ ] Brackets indicate state or country of incorporation and do not form part
of corporate name.
EXHIBIT (21)
Page 5
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
=============================================
Subsidiaries of the Registrant
------------------------------
VP Schickedanz S.A. [France]
Laboratoires Sofabel S.A.R.L. [France]
The Procter & Gamble Global Finance Company [Ohio]
Procter & Gamble Inc. [Canada]
Crest Toothpaste Inc. [Canada]
Procter & Gamble Financial Services [Ireland]
Procter & Gamble Mississauga Real Estate Company [Canada]
Procter & Gamble Services Company S.A. [Belgium]
Shulton de Venezuela, C.A. S.A.[Venezuela]
The Procter & Gamble Ingredient Company [Ohio]
Procter & Gamble Inversiones S.A. [Chile]
Productos Sanitarios S.A. [Chile]
Procter & Gamble Investment Corporation [Canada]
Procter & Gamble Italia, S.p.A. [Italy]
Eurocos Italia S.p.A. [Italy]
Fater S.p.A. [Italy]
Fameccanica Data S.p.A. [Italy]
Fatecnica S.p.A. [Italy]
Procter & Gamble Holding [Italy]
Procter & Gamble Pescara Technical Center S.p.A. [Italy]
Procter & Gamble Pharmaceuticals Italia S.p.A. [Italy]
Procter & Gamble Portugal S.A. [Portugal]
Neoblanc-Productos de Higiene e Limpeza Lda. [Portugal]
Procter & Gamble Tissues Italia S.p.A. [Italy]
Procter & Gamble Tuketim Mallari Sanayii A.S. [Turkey]
Eczacibasi Procter & Gamble Dagitim Ve Satis A.S. [Turkey]
Panel Piyasa Arastima Ve Danismanlik A.S. [Turkey]
Progasud S.p.A. [Italy]
Rapik S.p.A. [Italy]
PROGAVI S.p.A. [Italy]
Sanipak Saglik Urunleri Sanayi Ve Ticaret A.S. [Turkey]
Procter & Gamble Limited [U.K.]
European Beauty Products (U.K.) Limited [U.K.]
Max Factor & Co. (U.K.) Ltd. [Bermuda]
Max Factor Limited [U.K.]
Anne Russ Cosmetics Limited [U.K.]
EBP Profumi Limited [U.K.]
Gala Cosmetics & Fragrances Limited [U.K.]
Gala Cosmetics International Limited [U.K.]
Komal Manufacturing Chemists Ltd. [India]
[ ] Brackets indicate state or country of incorporation and do not form part
of corporate name.
EXHIBIT (21)
Page 6
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
============================================
Subsidiaries of the Registrant
-------------------------------
Gala of London Limited [U.K.]
Girl Cosmetics Ltd. [U.K.]
Mary Quant Cosmetics Limited [U.K.]
Miner's Make Up Limited (U.K.]
Max Factor Manufacturing Ltd. [U.K.]
Procter & Gamble (Enterprise Fund) Limited [United Kingdom]
Procter & Gamble (Health & Beauty Care) Limited [U.K.]
Noxell Limited [U.K.]
Noxell (Malaysia) Sdn. Bhd. [Malaysia]
Noxell (Singapore) Pte. Ltd. [Singapore]
Procter & Gamble (Cosmetics and Fragrances) Limited [U.K.]
Shulton (Great Britain) Ltd. [U.K.]
Colfax Laboratories (India) Ltd. [India]
Vick International Limited [U.K.]
Procter & Gamble (NTC) Limited [U.K.]
Procter & Gamble Pharmaceuticals UK, Limited [U.K.]
Procter & Gamble (Properties) Ltd. [U.K.]
Vidal Sassoon Holdings Ltd. [U.K.]
The Procter & Gamble Manufacturing Company [Ohio]
Procter & Gamble Manufacturing (Thailand) Limited [Thailand]
Procter & Gamble de Mexico, S.A. de C.V. [Mexico]
Max Factor Mexicana, S.A. de C.V. [Mexico]
The Procter & Gamble Paper Products Company [Ohio]
Procter & Gamble Philippines, Inc. [Philippines]
Progam Realty & Development Corporation [Philippines]
Procter & Gamble Productions, Inc. [Ohio]
Fountain Square Music Publishing Co., Inc. [Ohio]
Riverfront Music Publishing Co., Inc. [Ohio]
Sycamore Productions, Inc. [Ohio]
Procter & Gamble Scandinavia, Inc. [Ohio]
Procter & Gamble Hygien AB [Sweden]
N.C.Nielsen Hospitalsudstyr A/S [Denmark]
Procter & Gamble Hygien A/S [Norway]
Procter & Gamble Hygien OY [Finland]
Productos Sanitarios S.A. [Argentina]
Eguimad S.A. [Argentina]
Topsy S.A. [Argentina]
Inversiones Linlinao S.A. [Argentina]
Promotora de Bienes y Valores, S.A. de C.V. [Mexico]
REVAC 2 Corp. [Delaware]
[ ] Brackets indicate state or country of incorporation and do not form part
of corporate name.
EXHIBIT (21)
Page 7
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
=============================================
Subsidiaries of the Registrant
------------------------------
Richardson-Vicks Inc. [Delaware]
Celtic Insurance Company Limited [Bermuda]
Industrias Modernas, S.A. [Guatemala]
Olay Company, Inc. [Delaware]
OY Richardson-Vicks A.B. [Finland]
P&G do Brasil Comercial Ltda. [Brazil]
Procter & Gamble Australia Proprietary Limited [Australia]
Procter & Gamble (NBD) Pty. Ltd. [Australia]
Procter & Gamble Espana S.A. [Spain]
Procter & Gamble GmbH [Germany]
Beautycos Cosmetic GmbH [Germany]
Betrix Cosmetic GmbH [Germany]
Blendax Unterstutzungskasse GmbH [Germany]
Buescher GmbH [Germany]
Cover Girl Cosmetic GmbH [Germany]
Eurocos Cosmetic GmbH [Germany]
Eurocos Cosmetic Warenvertrieb GmbH [Austria]
Euro-Juice GmbH [Germany]
Euro-Juice y Compania, S. en C. [Spain]
Havelland-Fruchtsaft GmbH [Germany]
HELIX Spedition-und Lagerei GmbH [Germany]
IST Intelligent Safety Technologies GmbH [Germany]
Medimas Media-und Marketing Service GmbH [Germany]
Procter & Gamble Eastern Europe Service GmbH [Germany]
Procter & Gamble Pharmaceuticals-Germany GmbH [Germany]
Rohm Pharma GmbH [Germany]
Egnaro Arzneimittel GmbH [Germany]
Rohm Pharma GmbH Wien [Austria]
Rolf H. Dittmeyer GmbH [Germany]
SCS Sales + Cosmetic Service GmbH [Germany]
Shulton GmbH [Germany]
TRAPOFA Leonhard-Speditions GmbH [Germany]
Trapofa GmbH [Austria]
Procter & Gamble Health & Beauty Care-Europe Limited [U.K.]
Procter & Gamble Health & Beauty Care Sweden AB [Sweden]
Procter & Gamble Health Care K.K. [Japan]
Procter & Gamble Health Products, Inc. [Delaware]
Procter-Syntex Health Products Company [California]
Procter & Gamble Hong Kong Limited [Hong Kong]
Procter & Gamble India Limited [India]
Procter & Gamble Interamericas Inc. [Delaware]
[ ] Brackets indicate state or country of incorporation and do not form part
of corporate name.
EXHIBIT (21)
Page 8
THE PROCTER & GAMBLE COMPANY AND SUBSIDIARIES
=============================================
Subsidiaries of the Registrant
------------------------------
Alejandro Llauro E Hijos S.A.I.C. [Argentina]
Compania Quimica S.A. [Argentina]
Procter & Gamble Ecuador Compania Anonima [Ecuador]
Procter & Gamble Interamericas de Costa Rica S.A. [Costa Rica]
Procter & Gamble Interamericas de Nicaragua S.A. [Nicaragua]
Procter & Gamble (Malaysia) Sdn. Berhad [Malaysia]
Procter & Gamble Pharmaceuticals, Inc. [Ohio]
Norwich Overseas, Inc. [Delaware]
Norwich Eaton (Hellas) Commercial and Industrial S.A. [Greece]
Norwich Pharmacal Company del Peru [Peru]
Procter & Gamble Pharmaceuticals Australia Pty. Limited
[Australia]
Procter & Gamble Pharmaceuticals Canada, Inc. [Canada]
S.A. Procter & Gamble Pharmaceuticals N.V. [Belgium]
Procter & Gamble Pharmaceuticals Puerto Rico, Inc. [Delaware]
Procter & Gamble (Singapore) Pte. Ltd. [Singapore]
P. T. Procter & Gamble Indonesia [Indonesia]
Richardson-Vicks do Brasil Quimica e Farmaceutica S.A.. [Brazil]
Richardson-Vicks Limited [Thailand]
Richardson-Vicks Real Estate Inc. [Ohio]
R-V Chemicals Holdings Ltd. [Ireland]
Procter & Gamble (Ireland) Limited [Ireland]
Procter & Gamble (Manufacturing) Ireland Limited [Ireland]
Vick International Corporation [Delaware]
Vick Nigeria Limited [Nigeria]
Rosemount Corporation [Delaware]
Sacoma, S.A. [Argentina]
Shulton, Inc. [New Jersey]
Shulton (Australia) Pty. Limited [Australia]
Shulton S.A. [Guatemala]
Shulton (New Zealand) Limited [New Zealand]
Shulton (Thailand) Ltd. [Thailand]
Sundor Brands Inc. [Florida]
Sundor Canada Inc. [Delaware]
Sycamore Investment Company [Ohio]
Thomas Hedley & Co. Limited [U.K.]
[ ] Brackets indicate state or country of incorporation and do not form part
of corporate name.
Exhibit (23)
------------
Consent of Deloitte & Touche LLP
DELOITTE & TOUCHE LLP
250 East Fifth Street
Post Office Box 5340
Cincinnati, Ohio 45201-5340
Telephone: (513) 784-7100
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
----------------------------------------------------------------------------
We consent to the incorporation by reference in the following documents of
our report dated August 10, 1995 (expressing an unqualified opinion and
including an explanatory paragraph regarding the changes in accounting for
other post retirement benefits and income taxes effective July 1, 1992),
incorporated by reference in this Annual Report on Form 10-K of The Procter &
Gamble Company for the year ended June 30, 1995.
1. Amendment No. 2, Post-Effective Amendment No. 2 to Registration Statement
No. 33-26514 on Form S-8 for The Procter & Gamble 1983 Stock Plan;
2. Amendment No. 1 on Form S-8 to Registration Statement No. 33-31855 on Form
S-4 (now S-8) for the 1982 Noxell Employees' Stock Option Plan and the
1984 Noxell Employees' Stock Option Plan;
3. Amendment No. 1, Post-Effective Amendment No. 1 to Registration Statement
No. 33-32111 on Form S-3 for The Procter & Gamble Stock Investment
Program;
4. Amendment No. 1, Post-Effective Amendment No. 1 to Registration Statement
No. 33-48835 for The Procter & Gamble Company Debt Securities and
Warrants;
5. Amendment No. 1, Post-Effective Amendment No. 1 to Registration Statement
No. 33-49289 on Form S-8 for The Procter & Gamble 1992 Stock Plan;
6. Registration Statement No. 33-47656 on Form S-8 for The Procter & Gamble
International Stock Ownership Plan;
7. Registration Statement No. 33-49081 on Form S-8 for The Procter & Gamble
Profit Sharing Trust and Employee Stock Ownership Plan;
8. Registration Statement No. 33-49111 on Form S-3 for The Procter & Gamble
Stock Investment Program;
9. Registration Statement No. 33-50273 on Form S-8 for The Procter & Gamble
Commercial Company Employees' Savings Plan;
10. Registration Statement No. 33-51469 on Form S-8 for The Procter & Gamble
1993 non-employee Directors' Stock Plan;
11. Registration Statement No. 33-59257 on Form S-3 for The Procter & Gamble
Company Shareholder Investment Program; and
12. Amendment No. 1 to Registration Statement No. 33-55471 on Form S-3 for
The Procter & Gamble Company Debt Securities and Warrants.
/S/DELOITTE & TOUCHE LLP
September 12, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS FOR THE FISCAL
YEAR ENDED JUNE 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000080424
<NAME> THE PROCTER & GAMBLE COMPANY
<MULTIPLIER> 1,000,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-START> JUL-01-1994
<PERIOD-END> JUN-30-1995
<EXCHANGE-RATE> 1
<CASH> 2,028
<SECURITIES> 150
<RECEIVABLES> 3,562
<ALLOWANCES> 0
<INVENTORY> 3,453
<CURRENT-ASSETS> 10,842
<PP&E> 17,739
<DEPRECIATION> 6,713
<TOTAL-ASSETS> 28,125
<CURRENT-LIABILITIES> 8,648
<BONDS> 5,161
<COMMON> 687
0
1,913
<OTHER-SE> 7,989
<TOTAL-LIABILITY-AND-EQUITY> 28,125
<SALES> 33,434
<TOTAL-REVENUES> 33,434
<CGS> 19,623
<TOTAL-COSTS> 9,632
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 488
<INCOME-PRETAX> 4,000
<INCOME-TAX> 1,355
<INCOME-CONTINUING> 2,645
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,645
<EPS-PRIMARY> 3.71
<EPS-DILUTED> 3.48
</TABLE>
Exhibit (99.1)
--------------
Directors and Officers Liability Policy
DIRECTORS AND OFFICERS LIABILITY INSURANCE POLICY
Issued By
CODA
CORPORATE OFFICERS & DIRECTORS ASSURANCE LTD.
In Hamilton, Bermuda
THIS IS A CLAIMS FIRST MADE POLICY. DEFENSE AND OTHER COSTS
ARE INCLUDED IN THE LIMIT OF LIABILITY.
THIS IS A THREE-YEAR POLICY WITH AN AUTOMATIC
EXTENSION PROVISION.
PLEASE READ THIS POLICY CAREFULLY.
Words and phrases that appear below in all capital letters have
the special meanings set forth in Clause 2 (Definitions).
DECLARATIONS
Policy No. PG-106C
Item I COMPANY: The Procter & Gamble Company
The Procter & Gamble Fund
Principal Address: One Procter & Gamble Plaza
Cincinnati, OH 45202
Item II POLICY PERIOD: From Mar 15, 1987 to June 30, 1996
12:01 a.m. Standard Time at the address
of the Company stated above.
Item III LIMIT OF LIABILITY:
$25,000,000 Aggregate LIMIT OF LIABILITY for all
LOSS paid on behalf of all INSUREDS
arising from all CLAIMS first made
during each POLICY YEAR.
Item IV PREMIUM:
At inception of first POLICY YEAR: $850,000
(prepaid total for three years)
6/30/93-94 Year - $325,000
6/30/94-95 Year - $340,000
6/30/95-96 Year - $345,000
At each anniversary
thereafter: Subject to adjustment on each
anniversary date in accordance with
Clause 7 (Automatic Extension) of this
POLICY.
Item V Any notice to the COMPANY or, except in accordance with
Clause 17 (Representation) of this POLICY, to the
INSUREDS, shall be given or made to the individual listed
below, if any, or otherwise to the individual designated
in the APPLICATION, if any, or otherwise to the signer of
the APPLICATION, and shall be given or made in accordance
with Clause 16 (Notice) of this POLICY.
___________________________________________________________
__________________________________________________________
_________________________________________________________
Item VI Any notice to be given or payment to be made to the INSURER
under this POLICY shall be given or made to Corporate
Officers & Directors Assurance Ltd., The ACE Building, 30
Woodbourne Avenue, Hamilton HM 08, Bermuda, Fax 809-295-
5221, Telex 3543 ACEILBA, and shall be given or made in
accordance with Clause 16 (Notice) of this POLICY.
This POLICY shall constitute the entire contract between the INSUREDS, the
COMPANY, and the INSURER.
Endorsements 1 to 7 are made part of this POLICY at POLICY issuance.
Countersigned at Hamilton, Bermuda
on August 16, 1993
by /s/CHARLES D. SMITH
Signature of Authorized Representative
TABLE OF CONTENTS
Clause Page
1. Insuring Clause
2. Definitions
3. Exclusions
4. Appeals
5. Arbitration
6. Assistance and Cooperation
7. Automatic Extension
8. Cancellation
9. Changes and Assignments
10. Payment of LOSS
11. Currency
12. Headings
13. INSUREDS' Reporting Duties
14. LOSS Provisions
15. Other Insurance
16. Notice
17. Representation
18. Severability
19. Special POLICY Revisions
20. Subrogation
21. Acquisition, Creation or Disposition of a Subsidiary
DIRECTORS AND OFFICERS LIABILITY INSURANCE
In consideration of the payment of the premium and in reliance on all
statements made and information furnished by the COMPANY to the INSURER in
the APPLICATION, which is hereby made a part hereof, and subject to the
foregoing Declarations and to all other terms of this POLICY, the COMPANY,
the INSUREDS, and the INSURER agree as follows:
1. INSURING CLAUSE
The INSURER shall pay on behalf of the INSUREDS or any of them, any
and all LOSS that the INSUREDS shall become legally obligated to pay
by reason of any CLAIM or CLAIMS first made against the INSUREDS or
any of them during the POLICY PERIOD, for any WRONGFUL ACTS that are
actually or allegedly caused, committed, or attempted prior to the end
of the POLICY PERIOD by the INSUREDS, not exceeding the LIMIT OF
LIABILITY.
2. DEFINITIONS
(a) "APPLICATION" shall mean the signed, written application for this
POLICY, the schedules thereto and all supplementary information
submitted in connection therewith, and all underwriting data
submitted in connection with the automatic extension of this
POLICY, all of which materials shall be deemed attached hereto,
as if physically attached hereto, and incorporated herein.
(b) "CLAIM" shall mean:
(1) any demand or any judicial or administrative suit or
proceeding against any INSURED which seeks monetary,
equitable or other relief, including any appeal therefrom;
or
(2) written notice to the INSURER by the INSUREDS and/or the
COMPANY during the POLICY PERIOD describing circumstances
that are likely to give rise to a CLAIM being made against
the INSUREDS.
Multiple demands, suits or proceedings arising out of the same
WRONGFUL ACT shall be deemed to be a single CLAIM, which shall be
treated as a CLAIM first made during the POLICY YEAR in which the
first of such multiple demands, suits or proceedings is made
against any INSURED or in which notice of circumstances relating
thereto is first given in accordance with subpart (b) of Clause
14 (LOSS Provisions) below, whichever occurs first.
(c) "COMPANY" shall mean the company shown in Item I of the
Declarations, any company that was a predecessor company to the
company shown in Item I of the Declarations, any SUBSIDIARY of
either such company and, if covered in accordance with subpart
(a) of Clause 21 (Acquisition, Creation or Disposition of a
Subsidiary) below, any other subsidiary.
(d) "INSUREDS" shall mean one or more of the following:
(1) all persons who were, now are, or shall be duly elected or
appointed directors or officers of the COMPANY; or
(2) the estates, heirs, legal representatives or assigns of
deceased INSUREDS and the legal representatives or assigns
of INSUREDS in the event of their incompetency, insolvency
or bankruptcy.
(e) "INSURER" shall mean Corporate Officers & Directors Assurance,
Ltd., Hamilton, Bermuda.
(f) "LIMIT OF LIABILITY" shall mean the amount described in Item III
of the Declarations. Regardless of the time of payment of LOSS
by the INSURER, the LIMIT OF LIABILITY as stated in Item III of
the Declarations shall be the maximum liability of the INSURER
for all LOSS arising from all CLAIMS first made during each
POLICY YEAR. Reasonable and necessary attorneys fees incurred in
investigating and defending a CLAIM shall be part of and not in
addition to the LIMIT OF LIABILITY as stated in Item III of the
Declarations, and payment by the INSURER of such attorneys fees
shall reduce the LIMIT OF LIABILITY.
(g) "LOSS" shall mean any and all amounts that the INSUREDS are
legally obligated to pay by reason of a CLAIM made against the
INSUREDS for any WRONGFUL ACT, and shall include but not be
limited to compensatory, exemplary, punitive and multiple
damages, judgments, settlements and reasonable and necessary
costs of investigation and defense of CLAIMS and appeals
therefrom (including but not limited to attorneys fees but
excluding all salaries and office expenses of the COMPANY,
amounts paid to counsel as general retainer fees, and all other
expenses that cannot be directly allocated to a specific CLAIM),
and cost of attachment or similar bonds, providing always,
however, LOSS shall not include taxes, fines or penalties imposed
by law, or matters that may be deemed uninsurable under the law
pursuant to which this POLICY shall be construed. ("Fines or
penalties" do not include punitive, exemplary, or multiple
damages).
(h) "POLICY" shall mean this insurance policy, including the
APPLICATION, the Declarations, and any endorsements hereto issued
by the INSURER.
(i) "POLICY PERIOD" shall mean the period of time stated in Item II
of the Declarations, as may be automatically extended in
accordance with Clause 7 (Automatic Extension) below. If this
POLICY is cancelled in accordance with subpart (c) or (d) of
Clause 8 (Cancellation) below, the POLICY PERIOD shall end upon
the effective date of such cancellation.
(j) "POLICY YEAR" shall mean a period of one year, within the POLICY
PERIOD, commencing each year on the day and hour first named in
Item II of the Declarations, or if the time between the inception
date, or any anniversary date and the termination date of this
POLICY is less than one year, then such lesser period.
(k) "SUBSIDIARY" shall mean any corporation in which more than 50% of
the outstanding securities representing the present right to vote
for election of directors is owned, directly or indirectly, in
any combination, by the COMPANY and/or by one or more of its
SUBSIDIARIES, at the starting date of the POLICY PERIOD.
(l) "WRONGFUL ACT" shall mean any actual or alleged error,
misstatement, misleading statement or act, omission, neglect, or
breach of duty by the INSUREDS while acting in their individual
or collective capacities as directors or officers of the COMPANY,
or any other matter claimed against them by reason of their being
directors or officers of the COMPANY.
All such errors, misstatements, misleading statements or acts,
omissions, neglects, or breaches of duty actually or allegedly caused,
committed, or attempted by or claimed against one or more of the
INSUREDS arising out of or relating to the same or series of related
facts, circumstances, situations, transactions or events shall be
deemed to be a single WRONGFUL ACT.
3. EXCLUSIONS
The INSURER shall not be liable to make any payment for LOSS in
connection with that portion of any CLAIM made against the INSUREDS:
(a) for which the COMPANY actually pays or indemnifies or is required
or permitted to pay on behalf of or to indemnify the INSUREDS
pursuant to the charter or other similar formative document or by-
laws or written agreements of the COMPANY duly effective under
applicable law, that determines and defines such rights of
indemnity; provided, however, this exclusion shall not apply if:
(1) the COMPANY refuses to indemnify or advance defense or other
costs as required or permitted, or if the COMPANY is
financially unable to indemnify; and
(2) the INSUREDS comply with Clause 20 (Subrogation) below;
(b) based upon or attributable to the INSUREDS having gained any
personal profit to which they were not legally entitled if a
judgment or other final adjudication adverse to the INSUREDS or
any arbitration proceeding pursuant to Clause 5 (Arbitration)
below establishes that the INSUREDS in fact gained any such
personal profit;
(c) for the return by the INSUREDS of any improper or illegal
remuneration paid in fact to the INSUREDS if it shall be
determined by a judgment or other final adjudication adverse to
the INSUREDS that such remuneration is improper or illegal or if
such remuneration is to be repaid to the COMPANY under a
settlement agreement;
(d) for an accounting of profits in fact made from the purchase or
sale by the INSUREDS of securities of the COMPANY within the
meaning of Section 16(b) of the Securities Exchange Act of 1934
and amendments thereto or similar provisions of any state
statutory law or common law;
(e) brought about or contributed to by the dishonesty of the INSUREDS
if a judgment or other final adjudication adverse to the INSUREDS
or any arbitration proceeding pursuant to Clause 5 (Arbitration)
below establishes that acts of active and deliberate dishonesty
committed by the INSUREDS with actual dishonest purpose and
intent were material to the CLAIM;
(f) which is insured by any other existing valid policy or policies
under which payment of the LOSS is actually made except in
respect of any excess beyond the amounts of payments under such
other policy or policies;
(g) for which the INSUREDS are indemnified by reason of having given
notice of a CLAIM or of any circumstance which might give rise to
a CLAIM under any policy or policies of which this POLICY is a
renewal or replacement or which it may succeed in time;
(h) for personal injury, advertising injury, bodily injury, sickness,
disease, or death of any person, or for damage to or destruction
of any tangible property, including the loss of use thereof;
however, this exclusion shall not apply to any derivative action
brought against any INSURED;
(i) by, on behalf of, at the behest of, or in the right of the
COMPANY, if initiated by the management of the COMPANY; however,
this exclusion shall not apply if, between the starting date of
the POLICY PERIOD and the date of the CLAIM, the COMPANY shall
have undergone any of the events listed in subpart (a) or (b) of
Clause 8 (Cancellation) below, and the CLAIM is initiated by the
management of the COMPANY after the date of such event; or
(j) for any actual or alleged error, misstatement, misleading
statement or act, omission, neglect or breach of duty by the
INSUREDS while acting in their capacities as directors, officers,
trustees, governors, partners, employees or agents of any entity
other than the COMPANY or by reason of their being directors,
officers, trustees, governors, partners, employees or agents of
such other entity.
It is agreed that any fact pertaining to any INSURED shall not be
imputed to any other INSURED for the purpose of determining the
application of the Exclusions.
4. APPEALS
In the event the INSUREDS elect not to appeal a judgment, the INSURER
may elect to make such appeal at its own expense, and shall be liable
for any increased award, taxable costs and disbursements and any
additional interest incidental to such appeal, to the extent such
payments are not covered by other valid and collectible insurance.
5. ARBITRATION
(a) Any dispute arising in connection with this POLICY shall be fully
determined in Bermuda under the provisions of the Bermuda
Arbitration Act of 1986, as amended and supplemented, by a Board
of Arbitration composed of three arbitrators who shall all be
disinterested, active or retired business executives having
knowledge relevant to the matters in dispute, and who shall be
selected for each controversy as follows:
Either party to the dispute may, once a CLAIM or demand on his
part has been denied or remains unsatisfied for a period of
twenty (20) calendar days by the other party, notify the other of
its desire to arbitrate the matter in dispute and at the time of
such notification the party desiring arbitration shall notify the
other party of the name of the arbitrator selected by it. The
other party who has been so notified shall within ten (10)
calendar days thereafter select an arbitrator and notify the
party desiring arbitration of the name of such second arbitrator.
If the party notified of a desire for arbitration shall fail or
refuse to nominate the second arbitrator within ten (10) calendar
days following the receipt of such notification, the party who
first served notice of a desire to arbitrate will, within an
additional period of ten (10) calendar days, apply to the Supreme
Court of Bermuda for the appointment of a second arbitrator and
in such a case the arbitrator appointed by such a judge shall be
deemed to have been nominated by the party who failed to select
the second arbitrator. The two arbitrators, chosen as above
provided, shall within ten (10) calendar days after the
appointment of the second arbitrator choose a third arbitrator.
In the event of the failure of the first two arbitrators to agree
on a third arbitrator within the said ten (10) calendar day
period, either of the parties may within a period of ten (10)
calendar days thereafter, after notice to the other party, apply
to the Supreme Court of Bermuda for the appointment of a third
arbitrator and in such case the person so appointed shall be
deemed and shall act as a third arbitrator. Upon acceptance of
the appointment by said third arbitrator, the Board of
Arbitration for the controversy in question shall be deemed
fixed.
(b) The Board of Arbitration shall fix, by a notice in writing to the
parties involved, a reasonable time and place for the hearing and
may prescribe reasonable rules and regulations governing the
course and conduct of the arbitration proceeding, including
without limitation discovery by the parties.
(c) This POLICY shall be governed by and construed and enforced in
accordance with the internal laws of Bermuda, except insofar as
such laws may prohibit payment in respect of punitive damages
hereunder; provided, however, that the provisions, stipulations,
exclusions and conditions of this POLICY are to be construed in
an evenhanded fashion as between the parties; without limitation,
where the language of this POLICY is deemed to be ambiguous or
otherwise unclear, the issue shall be resolved in the manner most
consistent with the relevant provisions, stipulations, exclusions
and conditions (without regard to authorship of the language,
without any presumption or arbitrary interpretation or
construction in favor of either the INSUREDS or the INSURER) and
in accordance with the intent of the parties.
(d) The Board of Arbitration shall, within ninety (90) calendar days
following the conclusion of the hearing, render its decision on
the matter or matters in controversy in writing and shall cause a
copy thereof to be served on all the parties thereto. In case
the Board of Arbitration fails to reach a unanimous decision, the
decision of the majority of the members of said Board shall be
deemed to be the decision of the Board.
(e) Each party shall bear the expense of its own arbitrator. The
remaining costs of the arbitration shall be borne equally by the
parties to such arbitration.
(f) All decisions and awards by the Board of Arbitration shall be
final and binding upon the parties. The parties hereby agree to
exclude any right of appeal under Section 29 of the Bermuda
Arbitration Act of 1986 against any award rendered by the Board
of Arbitration and further agree to exclude any application under
Section 30(1) of the Bermuda Arbitration Act of 1986 for a
determination of any question of law by the Supreme Court of
Bermuda.
(g) All awards made by the Board of Arbitration may be enforced in
the same manner as a judgment or order from the Supreme Court of
Bermuda and judgment may be entered pursuant to the terms of the
award by leave from the Supreme Court of Bermuda.
(h) The INSURER and the INSUREDS agree that in the event that claims
for indemnity or contribution are asserted in any action or
proceeding against the INSURER by any of the INSUREDS' other
insurers in any jurisdiction or forum other than that set forth
in this Clause 5, the INSUREDS will in good faith take all
reasonable steps requested by the INSURER to assist the INSURER
in obtaining a dismissal of these claims (other than on the
merits) and will, without limitation, undertake to the court or
other tribunal to reduce any judgment or award against such other
insurers to the extent that the court or tribunal determines that
the INSURER would have been liable to such insurers for indemnity
or contribution pursuant to this POLICY. The INSUREDS shall be
entitled to assert claims against the INSURER for coverage under
this POLICY, including, without limitation, for amounts by which
the INSUREDS reduced its judgment against such other insurers in
respect of such claims for indemnity or contribution, in an
arbitration between the INSURER and the INSUREDS pursuant to this
Clause 5; provided, however, that the INSURER in such arbitration
in respect of such reduction of any judgment shall be entitled to
raise any defenses under this POLICY and any other defenses
(other than jurisdictional defenses) as it would have been
entitled to raise in the action or proceeding with such insurers.
6. ASSISTANCE AND COOPERATION
The INSURER has no duty to defend any CLAIM and shall not be called
upon to assume charge of the investigation, settlement or defense of
any CLAIM, but the INSURER shall have the right and shall be given the
opportunity to associate with the INSUREDS and the COMPANY in the
investigation, settlement, defense and control of any CLAIM relative
to any WRONGFUL ACT where the CLAIM is or may be covered in whole or
in part by this POLICY. At all times, the INSUREDS and the COMPANY
and the INSURER shall cooperate in the investigation, settlement and
defense of such CLAIM. The failure of the COMPANY to assist and
cooperate with the INSURER shall not impair the rights of the INSUREDS
under this POLICY. The INSUREDS shall not settle or admit any
liability with respect to any CLAIM which involves or appears
reasonably likely to involve this POLICY without the INSURER'S
consent, which shall not be unreasonably withheld.
7. AUTOMATIC EXTENSION
Except in the event this POLICY is cancelled in whole or in part in
accordance with Clause 8 (Cancellation) below, on each anniversary of
this POLICY, upon submission of the extension application and payment
of the charged premium, this POLICY shall automatically be continued
to a date one year beyond its previously stated expiration date,
unless written notice is given by the INSURER to the COMPANY, or by
the COMPANY to the INSURER, that such POLICY extension is not desired.
Such written notice may be given at any time prior to the anniversary
of the POLICY, except that such notice by the INSURER to the COMPANY
may be given only during the period commencing ninety (90) days and
ending ten (10) days prior to such anniversary, in which case the
POLICY shall automatically expire two years from such anniversary
date.
Such written notice shall be given by the INSURER to the COMPANY only
if it is determined to be appropriate by an affirmative vote of 2/3 of
the INSURER'S entire Executive Committee at a meeting of said
Committee prior to mailing of such notice. Any non-extension by the
INSURER shall be revoked as of the next meeting of the INSURER'S Board
of Directors if the Board at such meeting so determines by an
affirmative vote of a majority of the entire Board. If any such non-
extension is so revoked or if during the remainder of the POLICY
PERIOD the INSURER agrees to extend coverage, this POLICY shall be
continued or such agreed coverage may be extended, respectively, to
the expiration date which would otherwise be applicable if such notice
of non-extension had not been given, provided the COMPANY submits the
extension application and pays the charged premium.
If the COMPANY or the INSURER gives written notice that the POLICY
extension is not desired, the COMPANY shall pay on or before each of
the two remaining anniversary dates the charged premium for the next
succeeding POLICY YEAR respectively less a premium credit equal to the
premium paid at inception of the POLICY for Year 2 and Year 3 of the
POLICY, respectively. If any such premium credit exceeds the charged
premium, the INSURER shall refund to the COMPANY the difference within
ten days following such anniversary date.
The premium charged on each anniversary of this POLICY shall be
determined by the rating plan and by-laws of the INSURER in force at
such anniversary date.
8. CANCELLATION
This POLICY shall not be subject to cancellation except as follows:
(a) In the event during the POLICY PERIOD:
(1) the company named in Item I of the Declarations shall merge
into or consolidate with another organization in which the
company named in Item I of the Declarations is not the
surviving entity, or
(2) any person or entity or group of persons and/or entities
acting in concert shall acquire securities or voting rights
which results in ownership or voting control by such person
or entity or group of persons or entities of more than 50%
of the outstanding securities representing the present right
to vote for election of directors of the company named in
Item I of the Declarations,
this POLICY shall not apply to any WRONGFUL ACTS actually or
allegedly taking place after the effective date of said merger,
consolidation or acquisition; however, this POLICY shall remain
in force for the remainder of the POLICY PERIOD as to CLAIMS
based upon WRONGFUL ACTS alleged to have been committed prior to
such date. All premiums paid or due at the time of said merger,
consolidation or acquisition shall be fully earned and in no
respect refundable.
(b) In the event of the appointment by any state or federal official,
agency or court of any receiver, conservator, liquidator,
trustee, rehabilitator or similar official to take control of,
supervise, manage or liquidate any entity included within the
definition of the COMPANY, or in the event such entity becomes a
debtor in possession, this POLICY shall not apply to any WRONGFUL
ACTS by the directors and officers of such entity actually or
allegedly taking place after the date of such event. This POLICY
shall remain in force for the remainder of the POLICY PERIOD from
said date as to CLAIMS for (i) WRONGFUL ACTS by any other
INSUREDS, and (ii) WRONGFUL ACTS by the directors and officers of
such entity alleged to have been committed prior to the date of
such event. All premiums paid or due at the time of such event
shall be fully earned, and in no respect refundable. With
respect to CLAIMS first made after the date of such event for
WRONGFUL ACTS by the directors and officers of such entity, (i)
the LIMIT OF LIABILITY of this POLICY for the remainder of the
POLICY PERIOD shall be a continuation of the same limit, and not
a separate limit, as was in effect during the POLICY YEAR in
which such event occurred; and (ii) such CLAIMS shall be deemed
to have been first made during the POLICY YEAR in which such
event occurred for purposes of the LIMIT OF LIABILITY.
(c) This POLICY may be cancelled by mutual agreement and consent of
the INSURER, the COMPANY, and the INSUREDS, upon such terms and
conditions as respects return premium and/or future premium
adjustments and/or loss adjustments as the parties may agree upon
at the time of said cancellation.
(d) This POLICY may be cancelled by the INSURER upon granting of 365
days written notice, providing such cancellation is determined to
be appropriate by an affirmative vote of 3/4 of the INSURER'S
entire Board at a meeting of said Board prior to mailing of said
notice. Payment or tender of any unearned premium by the INSURER
shall not be a condition precedent to the effectiveness of
cancellation, but return of the pro rata unearned premium shall
be made as soon as practicable.
(e) In the event the charged premium for any POLICY YEAR is not paid
as provided in Clause 7 (Automatic Extension), above, this POLICY
shall not apply to any WRONGFUL ACTS actually or allegedly taking
place after the anniversary date on which the additional premium
was due; however, this POLICY shall remain in force for the
remainder of the POLICY PERIOD as to CLAIMS first made during the
POLICY PERIOD for WRONGFUL ACTS actually or allegedly caused,
committed or attempted prior to such anniversary date. With
respect to all CLAIMS first made after such anniversary date, one
LIMIT OF LIABILITY shall apply for the remainder of the POLICY
PERIOD. Such LIMIT OF LIABILITY shall be separate from the LIMIT
OF LIABILITY provided during the POLICY YEAR immediately
preceding such anniversary date. All premiums paid as of such
anniversary date shall be fully earned and in no respect
refundable.
9. CHANGES AND ASSIGNMENTS
The terms and conditions of this POLICY shall not be waived or
changed, nor shall an assignment of interest under this POLICY be
binding, except by an endorsement to this POLICY issued by the
INSURER.
10. PAYMENT OF LOSS
Except in those instances when the INSURER has denied liability for
the CLAIM because of the application of one or more exclusions, or
other coverage issues, if the COMPANY refuses or is financially unable
to advance LOSS costs, the INSURER shall, upon request and if proper
documentation accompanies the request, advance on behalf of the
INSUREDS, or any of them, LOSS costs that they have incurred in
connection with a CLAIM, prior to disposition of such CLAIM. In the
event that the INSURER so advances LOSS costs and it is finally
established that the INSURER has no liability hereunder, such INSUREDS
on whose behalf advances have been made and the COMPANY, to the full
extent legally permitted, agree to repay to the INSURER, upon demand,
all monies advanced.
11. CURRENCY
All premium, limits, retentions, LOSS and other amounts under this
POLICY are expressed and payable in the currency of the United States
of America.
12. HEADINGS
The descriptions in the headings and sub-headings of this POLICY are
inserted solely for convenience and do not constitute any part of the
terms or conditions hereof.
13. INSUREDS' REPORTING DUTIES
The INSUREDS and/or the COMPANY shall give written notice to the
INSURER as soon as practicable of any:
(a) CLAIM described in subpart (b)(1) of Clause 2 (Definitions)
above, which notice shall include the nature of the WRONGFUL ACT,
the alleged injury, the names of the claimants, and the manner in
which the INSUREDS or COMPANY first became aware of the CLAIM; or
(b) event described in subpart (a) or (b) of Clause 8 (Cancellation)
above,
and shall cooperate with the INSURER and give such additional
information as the INSURER may reasonably require.
14. LOSS PROVISIONS
(a) The time when a CLAIM shall be made for purposes of determining
the application of Clause 1 (Insuring Clause) above shall be the
date on which the CLAIM is first made against the INSURED.
(b) If during the POLICY PERIOD, the INSUREDS or the COMPANY shall
become aware of any circumstances that are likely to give rise to
a CLAIM being made against the INSUREDS and shall give written
notice to the INSURER of the circumstances and the reasons for
anticipating a CLAIM, with particulars as to dates and persons
involved, then any CLAIM that is subsequently made against the
INSUREDS arising out of such circumstances shall be treated as a
CLAIM made during the first POLICY YEAR in which the INSUREDS or
the COMPANY gave such notice.
(c) The COMPANY and the INSUREDS shall give the INSURER such
information and cooperation as it may reasonably require and as
shall be in the COMPANY'S and the INSUREDS' power.
15. OTHER INSURANCE
Subject to subparts (f) and (g) of Clause 3 (Exclusions) above, if
other valid and collectible insurance with any other insurer, whether
such insurance is issued before, concurrent with, or after inception
of this POLICY, is available to the INSUREDS covering a CLAIM also
covered by this POLICY, other than insurance that is issued
specifically as insurance in excess of the insurance afforded by this
POLICY, this POLICY shall be in excess of and shall not contribute
with such other insurance. Nothing herein shall be construed to make
this POLICY subject to the terms of other insurance.
16. NOTICE
All notices under any provision of this POLICY shall be in writing and
given by prepaid express courier or electronic service properly
addressed to the appropriate party at the respective addresses as
shown in Items V and VI of the Declarations. Notice so given shall be
deemed to be received and effective upon actual receipt thereof by the
party or one day following the date such notice is sent, whichever is
earlier.
17. REPRESENTATION
By acceptance of this POLICY, the company named in Item I of the
Declarations agrees to represent the INSUREDS with respect to all
matters under this POLICY, including, but not limited to, the giving
and receiving of notice of CLAIM or cancellation or desire not to
extend the POLICY, the payment of premiums, the receiving of LOSS
payments and any return premiums that may become due under this
POLICY, the requesting, receiving, and acceptance of any endorsement
to this POLICY, and the submission of a dispute to arbitration. The
INSUREDS agree that said company shall represent them but, for
purposes of the investigation, defense, settlement, or appeal of any
CLAIM, the INSUREDS who are named as defendants in the CLAIM may, upon
their unanimous agreement and upon notice to the INSURER, replace said
company with another agent to represent them with respect to the
CLAIM, including giving and receiving of notice of CLAIM and other
correspondence, the receiving of LOSS payments, and the submission of
a dispute to arbitration.
18. SEVERABILITY
(a) The APPLICATION for coverage shall be construed as a separate
APPLICATION for coverage by each INSURED. With respect to the
declarations and statements contained in such APPLICATION for
coverage, no statement in the APPLICATION or knowledge possessed
by any one INSURED shall be imputed to any other INSURED for the
purpose of determining the availability of coverage with respect
to CLAIMS made against any other INSURED.
The acts, omissions, knowledge, or warranties of any INSURED
shall not be imputed to any other INSURED with respect to the
coverages applicable under this POLICY.
(b) In the event that any provision of this POLICY shall be declared
or deemed to be invalid or unenforceable under any applicable
law, such invalidity or unenforceability shall not affect the
validity or enforceability of the remaining portion of this
POLICY.
19. SPECIAL POLICY REVISIONS
The INSURER may change this POLICY at any time by an affirmative vote
of a majority of the shareholders of the INSURER, in accordance with
the by-laws of the INSURER.
20. SUBROGATION
In the event of any payment under this POLICY, the INSURER shall be
subrogated to the extent of such payment to all the INSUREDS' rights
of recovery, and the INSUREDS shall execute all papers reasonably
required and shall take all reasonable actions that may be necessary
to secure such rights including the execution of such documents
necessary to enable the INSURER effectively to bring suit in the name
of the INSUREDS, including but not limited to an action against the
COMPANY for nonpayment of indemnity due and owing to the INSUREDS by
the COMPANY.
21. ACQUISITION, CREATION OR DISPOSITION OF A SUBSIDIARY
(a) Coverage shall apply to the directors and officers of any
subsidiary corporation in which more than 50% of the outstanding
securities representing the present right to vote for election of
directors is owned, directly or indirectly, in any combination,
by the COMPANY and/or one or more of its SUBSIDIARIES, and which
is acquired or created after the inception of this POLICY, if
written notice is given to the INSURER within 30 days after the
acquisition or creation, and any additional premium required by
the INSURER is paid within thirty days of the request therefor by
the INSURER. The INSURER waives the obligation to provide notice
and to pay any additional premium if the assets of such newly
created or acquired company are not more than 10% of the total
assets of the COMPANY or $250,000,000, whichever is less. The
coverage provided for the directors and officers of such new
subsidiary shall be limited to CLAIMS for WRONGFUL ACTS actually
or allegedly taking place subsequent to the date of acquisition
or creation of the subsidiary.
(b) Coverage shall not apply to directors and officers of any
subsidiary, including a SUBSIDIARY as defined in Clause 2
(Definitions) above, for CLAIMS for WRONGFUL ACTS actually or
allegedly taking place subsequent to the date that the COMPANY
and/or one or more of its SUBSIDIARIES, directly or indirectly,
in any combination, ceases to own more than 50% of the
outstanding securities representing the present right to vote for
election of directors in such subsidiary.
IN WITNESS WHEREOF, the INSURER has caused this POLICY to be signed by its
President and Secretary and countersigned on the Declarations Page by a
duly authorized agent of the INSURER.
/s/C. GRANT HALL /s/D. E. SNYDER
Secretary President
CORPORATE OFFICERS AND DIRECTORS ASSURANCE LTD.
Endorsement No. 1 Effective Date of Endorsement June 30, 1993
Attached to and forming part of POLICY No. PG-106C
COMPANY The Procter & Gamble Company
The Procter & Gamble Fund
It is understood and agreed that this POLICY is hereby amended as indicated
below. All other terms of this POLICY remain unchanged.
REVISED THREE-YEAR POLICY FORM ENDORSEMENT
__________________________________________
(Replacement Policy Form)
It is understood and agreed that pursuant to Clause 19 "Special Policy
Revisions" and with the consent of the company named in Item I of the
Declarations, this POLICY is changed as of the effective date set forth
above by cancelling the POLICY form (including endorsements) in effect as
of the effective date of this Endorsement and reissuing the revised POLICY
form (including revised endorsement forms) to which this Endorsement is
attached.
Coverage under this POLICY for all CLAIMS first made against the
INSUREDS prior to the effective date of this Endorsement shall be governed
by such prior POLICY form (including endorsements thereto). Coverage under
this POLICY for all CLAIMS first made against the INSUREDS on or after the
effective date of this Endorsement shall be governed by the POLICY form
(including endorsements) to which this Endorsement is attached.
Except as may be agreed to by the INSURER in writing, such change in
POLICY form shall not change the inception date, anniversary date, LIMIT OF
LIABILITY, or POLICY YEAR of this POLICY. The maximum liability of the
INSURER for all LOSS arising from all CLAIMS first made during the POLICY
YEAR in which this Endorsement becomes effective shall be the amount
described in Item III of the Declarations.
_______________________________ /s/CHARLES D. SMITH
Signature of Authorized Signature of Authorized
Representative of COMPANY Representative of INSURER
CORPORATE OFFICERS AND DIRECTORS ASSURANCE LTD.
Endorsement No. 2 Effective Date of Endorsement March 15, 1990
Attached to and forming part of POLICY No. PG-106C
COMPANY The Procter & Gamble Company
The Procter & Gamble Fund
It is understood and agreed that this POLICY is hereby amended as indicated
below. All other terms of this POLICY remain unchanged.
OUTSIDE POSITIONS ENDORSEMENT:
SUBLIMIT, NON-SPECIFIC INDIVIDUALS
(A) Subject to the sublimit of liability set forth in (C) below, the
definition of "INSUREDS" is hereby extended to include:
(1) all persons who were, are, or shall be serving as directors,
officers, trustees, governors, partners or the equivalent thereof
for any corporation, partnership, joint venture, eleemosynary
institution, non-profit organization, industry association, or
foundation, (any such enterprises referred to below as "Entity"),
if:
(a) such activity is part of their duties regularly assigned by
the COMPANY, or
(b) they are a member of a class of persons so directed to serve
by the COMPANY.
(2) the estates, heirs, legal representatives or assigns of deceased
persons who were INSUREDS, as defined in subpart (A)(1) above,
and the legal representatives or assigns of INSUREDS in the event
of their incompetency, insolvency or bankruptcy.
(B) It is further understood and agreed that this extension of coverage:
(1) is to be excess of any other insurance and excess of any director
or officer liability insurance and/or company reimbursement
insurance any conditions in such other insurance notwithstanding;
(2) shall not apply to any LOSS for which such Entity or the COMPANY
actually pays or indemnifies or is required or permitted to pay
on behalf of or to indemnify the INSUREDS pursuant to the charter
or other similar formative document or by-laws or written
agreements of such Entity or the COMPANY duly effective under
applicable law, that determines and defines such rights of
indemnity; provided, however, this subpart (2) shall not apply
if:
(a) such Entity and the COMPANY refuse to indemnify or advance
defense or other costs as required or permitted, or if such
Entity and the COMPANY are financially unable to indemnify;
and
(b) the INSUREDS comply with Clause 20 (Subrogation) of the
POLICY;
(3) shall not apply to any LOSS in connection with any CLAIM made
against the INSUREDS in their capacity as directors or officers
of Corporate Officers & Directors Assurance Ltd. or Corporate
Officers & Directors Assurance Holding, Ltd.; and
(4) is not to be construed to extend to the Entity nor to any other
director, officer, trustee, governor, partner or employee of such
Entity.
(C) In lieu of the LIMIT OF LIABILITY stated in Item III of the
Declarations, the limit of liability of the INSURER for this extension
of coverage shall be $25,000,000 in the aggregate for all LOSS which
is covered by reason of this extension of coverage and which is paid
on behalf of all INSUREDS arising from all CLAIMS first made during
each POLICY YEAR. It is understood that the amount stated in Item III
of the Declarations is the maximum amount payable by the INSURER under
this POLICY for all CLAIMS first made during each POLICY YEAR, and
that this Endorsement extends coverage with a sublimit which further
limits the INSURER'S liability and does not increase the INSURER'S
maximum liability beyond the LIMIT OF LIABILITY stated in Item III the
Declarations. It is further understood that such sublimit is separate
from and payment of LOSS pursuant to this Endorsement does not reduce
the sublimit or limit contained in any other Outside Positions
Endorsement to this POLICY.
(D) Solely for purposes of this extension of coverage, the definition of
"WRONGFUL ACT" is hereby modified to replace the word "COMPANY" with
the word "Entity" wherever the word "COMPANY" appears.
(E) Solely for purposes of applying subparts (i) and (j) of Clause 3
(Exclusions) of the POLICY to this extension of coverage, the
definition of "COMPANY" is hereby modified to include such Entity.
/s/CHARLES D. SMITH
Signature of Authorized
Representative
CORPORATE OFFICERS AND DIRECTORS ASSURANCE LTD.
Endorsement No. 3 Effective Date of Endorsement March 15, 1987
Attached to and forming part of POLICY No. PG-106C
COMPANY The Procter & Gamble Company
The Procter & Gamble Fund
It is understood and agreed that this POLICY is hereby amended as indicated
below. All other terms of this POLICY remain unchanged.
Divisional Managers Endorsement
_______________________________
Subpart (d) of Clause 2 (Definitions) of the POLICY is hereby deleted in
its entirety and replaced with the following:
(d) "INSUREDS" shall mean:
(1) all persons who were, now are, or shall be duly elected or
appointed directors, officers or divisional managers of the
Company; or
(2) the estates, heirs, legal representatives or assigns of
deceased INSUREDS who were directors, officers or divisional
managers of the COMPANY at the time of the WRONGFUL ACT upon
which such CLAIMS are based were committed, and the legal
representatives or assigns of INSUREDS in the event of their
incompetency, insolvency or bankruptcy.
By /s/CHARLES D. SMITH
Authorized Representative
CORPORATE OFFICERS AND DIRECTORS ASSURANCE LTD.
Endorsement No. 4 Effective Date of Endorsement March 15, 1987
Attached to and forming part of POLICY No. PG-106C
COMPANY The Procter & Gamble Company/The Procter & Gamble Fund
It is hereby understood and agreed exclusion 3(h) is amended to read as
follows:-
(h) for bodily injury, sickness, disease, or death of any person, or
for damage to or destruction of any tangible property, including
the loss of use thereof; however, this exclusion shall not apply
to any derivative action brought against any INSURED.
All other terms and conditions remain unchanged.
By /s/CHARLES D. SMITH
Authorized Representative
CORPORATE OFFICERS AND DIRECTORS ASSURANCE LTD.
Endorsement No. 5 Effective Date of Endorsement March 15, 1991
Attached to and forming part of POLICY No. PG-106C
COMPANY The Procter & Gamble Company/The Procter & Gamble Fund
IN CONSIDERATION OF THE PREMIUM CHARGED, IT IS HEREBY UNDERSTOOD AND AGREED
THAT ITEM 1 ON THE DECLARATIONS IS AMENDED TO INCLUDE:-
"OFFICERS OF OPERATING UNITS OF PROCTER AND GAMBLE COMPANY"
ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.
By /s/CHARLES D. SMITH
Authorized Representative
CORPORATE OFFICERS AND DIRECTORS ASSURANCE LTD.
Endorsement No. 6 Effective Date of Endorsement March 15, 1992
Attached to and forming part of POLICY No. PG-106C
COMPANY The Procter & Gamble Company/The Procter & Gamble Fund/
Officers of Operating Units of Procter & Gamble Company
IN CONSIDERATION OF THE ADDITIONAL PREMIUM OF $95,000 IT IS HEREBY
UNDERSTOOD AND AGREED THAT THE "POLICY PERIOD" OF THIS POLICY IS EXTENDED
TO JUNE 30, 1994.
ALL OTHER TERMS AND CONDITIONS REMAIN UNCHANGED.
By /s/CHARLES D. SMITH
Authorized Representative
CODA
CORPORATE OFFICERS AND DIRECTORS ASSURANCE LTD.
Endorsement No. 7 Effective Date of Endorsement June 30, 1993
Attached to and forming part of POLICY No. PG-106C
COMPANY The Procter & Gamble Company/The Procter & Gamble Fund
Officers of Operating Units of Procter & Gamble Company
It is understood and agreed that this POLICY is hereby amended as indicated
below. All other terms of this POLICY remain unchanged.
THREE-YEAR POLICY REVISION
GRANDFATHER ENDORSEMENT
Clause 8(e) of the POLICY is deleted in its entirety and Clause 7 of the
POLICY is amended to read in its entirety as follows:
Except in the event this POLICY is canceled in whole or in part
in accordance with Clause 8 (Cancellation) below, on each
anniversary of this POLICY, upon submission of the extension
application and payment of the charged premium, this POLICY shall
automatically be continued to a date one year beyond its
previously stated expiration date, unless written notice is given
by the INSURER to the COMPANY, or by the COMPANY to the INSURER,
that such POLICY extension is not desired. Such written notice
may be given at any time prior to the anniversary of the POLICY,
except that such notice by the INSURER to the COMPANY may be
given only during the period commencing ninety (90) days and
ending ten (10) days prior to such anniversary, in which case the
POLICY shall automatically expire two years from such anniversary
date. Such written notice shall be given by the INSURER to the
COMPANY only if it is determined to be appropriate by an
affirmative vote of a majority of the INSURER's entire Board at a
meeting of said Board prior to mailing of such notice.
The premium charged on each anniversary of this POLICY shall be
determined by the rating plan and by-laws of the INSURER in force
at such anniversary date.
As of the second anniversary of the Effective Date of this Endorsement, (i)
the foregoing deletion of Clause 8(e) and amendment of Clause 7 shall
terminate, (ii) Clause 8(e) shall read in its entirety as set forth in the
POLICY form to which this Endorsement is attached, and (iii) Clause 7 shall
read in its entirety as follows:
Except in the event this POLICY is canceled in whole or in part
in accordance with Clause 8 (Cancellation) below, on each
anniversary of this POLICY, upon submission of the extension
application and payment of the charged premium, this POLICY shall
automatically be continued to a date one year beyond its
previously stated expiration date, unless written notice is given
by the INSURER to the COMPANY, or by the COMPANY to the INSURER,
that such POLICY extension is not desired. Such written notice
may be given at any time prior to the anniversary of the POLICY,
except that such notice by the INSURER to the COMPANY may be
given only during the period commencing ninety (90) days and
ending ten (10) days prior to such anniversary, in which case the
POLICY shall automatically expire two years from such anniversary
date.
Such written notice shall be given by the INSURER to the COMPANY
only if it is determined to be appropriate by an affirmative vote
of 2/3 of the INSURER'S entire Executive Committee at a meeting
of said Committee prior to mailing of such notice. Any non-
extension by the INSURER shall be revoked as of the next meeting
of the INSURER'S Board of Directors if the Board at such meeting
so determines by an affirmative vote of a majority of the entire
Board. If any such non-extension is so revoked or if during the
remainder of the POLICY PERIOD the INSURER agrees to extend
coverage, this POLICY shall be continued or such agreed coverage
may be extended, respectively, to the expiration date which would
otherwise be applicable if such notice of Non-extension had not
been given, provided the COMPANY submits the extension
application and pays the charged premium.
If the COMPANY or the INSURER gives written notice that the
POLICY extension is not desired, the COMPANY shall pay on or
before each of the two remaining anniversary dates the charged
premium for the next succeeding POLICY YEAR respectively less a
premium credit equal to the premium paid for the two respective
POLICY YEARS remaining in the POLICY PERIOD as of the effective
date of this Endorsement. If any such premium credit exceeds the
charged premium, the INSURER shall refund to the COMPANY the
difference within ten days following such anniversary date.
The premium charged on each anniversary of this POLICY shall be determined
by the rating plan and by-laws of the INSURER in force at such anniversary
date.
/s/CHARLES D. SMITH
Authorized Representative
CORPORATE OFFICERS AND DIRECTORS ASSURANCE LTD.
Endorsement No. 8 Effective Date of Endorsement March 15, 1990
Attached to and forming part of POLICY No. PG-106C
COMPANY The Procter & Gamble Company/The Procter & Gamble Fund
Officers of Operating Units of Procter & Gamble Company
In consideration of the premium charged it is hereby understood and agreed
that on the outside positions Endorsements Section A(1) is amended to read
after the word "foundation" as follows:-
Employee Stock Ownership Trust of the Procter & Gamble Profit Sharing Trust
and Employee Stock Ownership Plan.
All other terms and conditions remain unchanged.
By /s/CHARLES D. SMITH
Authorized Representative
CORPORATE OFFICERS AND DIRECTORS ASSURANCE LTD.
Endorsement No. 9 Effective Date of Endorsement June 30, 1994
Attached to and forming part of POLICY No. PG-106C
COMPANY The Procter & Gamble Company/The Procter & Gamble Fund
Officers of Operating Units of Procter & Gamble Company
It is understood and agreed that this POLICY is hereby amended as indicated
below. All other terms of this POLICY remain unchanged.
AUTOMATIC EXTENSION ENDORSEMENT
-------------------------------
(Extension Premium: $350,000)
In consideration of payment of the above-referenced premium, it is
understood and agreed that this POLICY shall be continued and the POLICY
PERIOD shall be extended to June 30, 1997, 12:01 A.M. Standard Time at the
address of the Company as stated in Item I of the Declarations.
It is further understood and agreed that the above-referenced premium
has been allocated and paid as follows:
Policy Year
Following Effective
Date of this Endorsement Premium
------------------------ -------
Year 94-95 340,000
Year 95-96 345,000
Year 96-97 350,000
-----------
$ 1,035,000
Less Prepaid Premium on hand $ 685,000
-----------
Additional Premium $ 350,000
-----------
-----------
By /s/PATRICK D. TANNOCK
Authorized Representative
Exhibit (99.2)
--------------
Directors and Officers (First) Excess Liability Policy
Form X.L. D&O-003B Policy No. XLD+O-00364-94
XL
X.L. INSURANCE COMPANY, LTD.
Producer: PARK INTERNATIONAL LIMITED
In favor of: THE PROCTER & GAMBLE COMPANY
Address: ONE PROCTER & GAMBLE PLAZA
CINCINNATI, OHIO 45202-3314
U.S.A.
Type of Coverage: DIRECTORS AND OFFICERS LIABILITY
In the amount as stated in Item 2 of the
Declarations.
Term: Beginning at 12:01 A.M. on the 30th day of June, 1994 prevailing
time at the address of the Named Insured and in accordance with
terms and conditions of the form(s) attached.
PREMIUM: $150,000
IN WITNESS WHEREOF, this Policy has
been made, entered into and executed
by the undersigned in Hamilton, Bermuda
this 20th day of SEPTEMBER, 1994.
By: /s/PAUL B. MILLER
PAUL B. MILLER
Title: VICE PRESIDENT
DATE: SEPTEMBER 20, 1994 POLICY NO: XLD+O-00364-94
X.L. INSURANCE COMPANY, LTD.
POLICY FOR DIRECTORS AND OFFICERS LIABILITY
IMPORTANT: THIS COVERAGE IS ON A CLAIMS MADE AND CLAIMS
REPORTED BASIS. PLEASE READ THIS POLICY CAREFULLY.
DECLARATIONS
Item 1: (a) Named Company: THE PROCTER & GAMBLE COMPANY
(b) Address of Named Company: ONE PROCTER & GAMBLE PLAZA
CINCINNATI, OHIO 45202
U.S.A.
Item 2: Aggregate Limit of Liability:
$25,000,000 each policy period in excess of $25,000,000 each
policy year.
Item 3: Policy Period: JUNE 30, 1994 - JUNE 30, 1995
The Declarations along with the completed Application and this
Policy and any Schedules hereto shall constitute the contract
among the Named Company, the Designated Companies, the Directors
and Officers and the Company.
Item 4: Schedule of Current and Known Prospective Underlying Insurance:
Policy MM Policy
Carrier Number Limits Year
------- ------ ------ ------
i. Underlying Second Excess
ii. Underlying Excess. . . .
iii. Primary Insurer(s) . . . CODA PG-106C 25 JUNE
30,
1994 -
97
Uninsured Retention under Primary Insurance:
$NIL each Director or Officer each loss, but in no event
exceeding $NIL in the aggregate each loss all Directors and
Officers Liability.
Item 5: Policy to be followed: CODA - POLICY NO. PG-106C
Item 6: Representative of Named Company: THE PROCTER & GAMBLE COMPANY
Item 7: Notice: X.L. Insurance Company, Ltd., Cumberland House, 1
Victoria St., P.O. Box HM 2245, Hamilton, Bermuda HM
JX. Telex: 3626 XL BA
Item 8: (a) Discovery Coverage Premium: 100% of policy period premium
hereunder.
(b) Discovery Coverage Period: 365 days.
Item 9: Notice Cancellation Period: 60 days.
Said insurance is subject to the provisions, stipulations, exclusions and
conditions contained in this form and the representations and warranties
contained in the Named Company's application for this policy of insurance,
which is hereby made a part of said insurance, together with other
provisions, stipulations, exclusions and conditions as may be endorsed on
said policy or added thereto as therein provided (collectively hereinafter
referred to as the "Policy").
DIRECTORS AND OFFICERS LIABILITY INSURANCE
Named Company: As stated in Item 1 of the Declarations forming a part
hereof (hereinafter called the "Named Company").
INSURING AGREEMENTS
I. COVERAGE
The X.L. Insurance Company, Ltd. (the "Company") hereby agrees with
the Directors and Officers of the Named Company and any other
companies listed in Schedule A hereto ("Designated Companies"),
subject to the limitations, terms, exclusions and conditions
hereinafter mentioned that, if during the policy period any claim or
claims are made against any of the Directors and Officers for a
Wrongful Act, and reported to the Company, the Company in accordance
with its limits of liability shall pay on behalf of such Directors and
Officers all loss which such Directors and Officers shall become
legally obligated to pay, except for such loss which the Designated
Companies shall indemnify such Directors and Officers.
II. LIMIT OF LIABILITY
A. It is expressly agreed that liability for any loss shall attach
to the Company only after the Primary and Underlying Excess
Insurers shall have paid, admitted or been held liable to pay the
full amount of their respective liability and the Directors and
Officers shall have paid the full amount of self-insured
retentions, if any, as set forth in Item 4 of the Declarations
(hereinafter referred to as the "Schedule of Underlying
Insurance"), and the Company shall then be liable to pay only
additional amounts for any and all losses up to its Aggregate
Limit of Liability ("aggregate limit") as set forth in Item 2 of
the Declarations, which shall be the maximum liability of the
Company for all covered losses (with respect to Directors and
Officers, collectively) during the policy period irrespective of
the time of payment by the Company.
B. In the event and only in the event of the reduction or exhaustion
of the aggregate limits of liability under the said Primary and
Underlying Excess Policies and under self-insured retentions, if
any (as if such retentions were subject to the same terms,
conditions, exclusions and structure of limits of liability as
said policies) by reason of losses paid thereunder, this coverage
shall: (i) in the event of reduction, pay the excess of the
reduced Primary and Underlying Excess Limits, and (ii) in the
event of exhaustion, continue in force as Primary Insurance;
provided always that in the latter event this coverage shall only
pay excess of the retention applicable to such Primary Insurance
for such policy year as set forth in Item 4 (iii) of the
Declarations, which shall be applied to any subsequent loss in
the same manner as specified in such Primary Insurance. Except
insofar as aggregate limits of liability under the Primary and
Underlying Excess Policies have been reduced or exhausted by
reason of losses paid thereunder and self-insured retentions, if
any, have been fully paid (as if such retentions were subject to
the same terms, conditions, exclusions and structure of limits of
liability as said policies), this coverage shall apply only as if
all Primary and Underlying Policies and self-insured retentions,
if any, listed on the Schedule of Underlying Insurance covered
and were fully collectable for any loss hereunder.
III. PRIMARY AND UNDERLYING INSURANCE
This Policy is subject to the same warranties, terms, conditions and
exclusions (except as regards the premium, the amount and limits of
liability, the policy period and except as otherwise provided herein)
as are contained in or as may be added to the policy set forth in Item
5 of the Declarations or, if no policy is set forth therein, the
policy of the Primary Insurer(s) as respects coverage of the Directors
and Officers.
It is a condition of this Policy that the policies of the Primary and
Underlying Excess Insurers shall be maintained in full effect during
the policy year(s) listed in the Schedule of Underlying Insurance
except for any reduction of the aggregate limits contained therein by
reason of losses paid thereunder (as provided for in Paragraph II(B)
above).
This Policy shall automatically terminate upon the failure to satisfy
this condition (i.e., when any of such listed policies ceases to be in
full effect) unless otherwise agreed by the Company in writing. If
the Named Company notifies the Company in writing of cancellation of
any of the policies listed on the Schedule of Underlying Insurance at
least thirty (30) days prior to the effectiveness thereof, the Company
agrees that within twenty (20) days thereafter it will review the
situation and formulate a proposal for the terms, conditions,
exclusions, underlying amount, limit and premium for continuation of
this Policy upon such cancellation; provided, however, that (i) the
underlying amount shall be at least $20,000,000, (ii) the limit shall
be a maximum of $25,000,000 and (iii) this Policy shall not continue
after such cancellation unless there is an agreement in writing
between the Named Company and the Company providing therefor.
IV. COSTS, CHARGES AND EXPENSES
No costs, charges or expenses shall be incurred or settlements made
without the Company's consent, such consent not to be unreasonably
withheld; however, in the event of such consent being given, the
Company will pay, subject to the provisions of Article II, such costs,
settlements, charges or expenses.
V. NOTIFICATION
A. If during the policy period or extended discovery period any
claim is made against any Director or Officer, the Directors and
Officers shall, as a condition precedent to their right to be
indemnified under this Policy, give to the Company notice in
writing as soon as practicable of such claims.
B. If during the policy period or extended discovery period:
(1) the Directors and Officers shall receive written or oral
notice from any party that it is the intention of any such
party to hold the Directors and Officers, or any of them,
responsible for a Wrongful Act; or
(2) the Directors and Officers shall become aware of any fact,
circumstance or situation which may subsequently give rise
to a claim being made against the Directors and Officers, or
any of them, for a Wrongful Act;
and shall in either case during such period give written notice
as soon as practicable to the Company of the receipt of such
written or oral notice under Clause (1) or of such fact,
circumstance or situation under Clause (2), then any claim, which
may subsequently be made against the Directors and Officers,
arising out of such Wrongful Act shall for the purpose of this
Policy be treated as a claim made during the policy period.
C. Notice to the Company shall be given to the person or firm shown
under Item 7 of the Declarations. Notice shall be deemed to be
received if sent by prepaid mail properly addressed.
VI. GENERAL CONDITIONS
A. DEFINITIONS: The terms "Directors and Officers", "Wrongful Act",
"Loss", "Subsidiary", and "Policy Year" shall be deemed to have
the same meanings in this Policy as are attributed to them in the
policy set forth in Item 5 of the Declarations or, if no policy
is set forth therein, the policy of the Primary Insurer(s). The
term "Company" shall mean the X.L. Insurance Company, Ltd. The
term "policy period" shall mean the period stated in Item 3 of
the Declarations.
B. DISCOVERY CLAUSE: If the Company shall cancel or refuse to renew
this Policy, the Named Company or the Directors and Officers
shall have the right, upon payment of the additional premium set
forth in Item 8(a) of the Declarations to a continuation of the
coverage granted by this Policy in respect of any claim or claims
which may be made against the Directors and Officers during the
period stated in Item 8(b) of the Declarations after the date of
cancellation or non-renewal, but only in respect of any Wrongful
Act committed before the date of cancellation or non-renewal of
this Policy. This right of extension shall terminate unless
written notice is given to the Company within ten (10) days after
the effective date of cancellation or non-renewal.
C. APPLICATION OF RECOVERIES: All recoveries or payments recovered
or received subsequent to a loss settlement under this Policy
shall be applied as if recovered or received prior to such
settlement and all necessary adjustments shall then be made
between the Named Company or the Directors and Officers and the
Company, provided always that nothing in this Policy shall be
construed to mean that losses under this Policy are not payable
until the Directors' and Officers' ultimate net loss has been
finally ascertained.
D. CANCELLATION CLAUSE: This coverage may be cancelled by the Named
Company at any time by written notice or surrender of this
Policy. This coverage may also be cancelled by, or on behalf of,
the Company by delivering to the Named Company or by mailing to
the Named Company by registered, certified or other first class
mail, at the Named Company's address shown in Item 1 of the
Declarations, written notice stating when, not less than the
number of days set forth in Item 9 of the Declarations, the
cancellation shall become effective. The mailing of such notice
as aforesaid shall be sufficient proof of notice, and this Policy
shall terminate at the date and hour specified in such notice.
If this Policy shall be cancelled by the Named Company, the
Company shall retain the customary short rate proportion of
premium hereon. If this Policy shall be cancelled by or on
behalf of the Company, the Company shall retain the pro rata
proportion of the premium hereon. Payment or tender of any
unearned premium by the Company shall not be a condition
precedent to the effectiveness of cancellation, but such payment
shall be made as soon as practicable.
E. COOPERATION: The Named Company, the Designated Companies and the
Directors and Officers shall give the Company such information
and cooperation as it may reasonably require.
F. PREMIUM: The premium under this Policy is a flat premium and is
not subject to adjustment except as otherwise provided herein.
The premium shall be paid to the Company.
G. WRONGFUL ACT EXCLUSION: Notwithstanding any other provision of
this Policy, this Policy shall not apply with respect to a
Wrongful Act by any Director or Officer of the Company in his
capacity as such.
H. NUCLEAR EXCLUSION: This Policy shall not apply to, and the
Company shall have no liability hereunder in respect of liability
or alleged liability for:
(1) personal injury, property damage or advertising liability in
the United States, its territories or possessions, Puerto
Rico or the Canal Zone (A) with respect to which the Named
Company, the Designated Companies and/or Officers and
Directors (collectively, the "Certain Parties") is also an
insured under a nuclear energy liability policy issued by
Nuclear Energy Liability Insurance Association, Mutual
Atomic Energy Liability Underwriters or Nuclear Insurance
Association of Canada, or would be an insured under any such
policy but for its termination upon exhaustion of its
limited liability or (B) resulting from the hazardous
properties of nuclear material and with respect to which (i)
any person or organization is required to maintain financial
protection pursuant to the Atomic Energy Act of 1954 or any
law amendatory thereof or (ii) a Certain Party is, or had
this Policy not been issued, would be entitled to indemnity
from United States of America or any agency thereof under
any agreement entered into by the United States of America
or any agency thereof with any person or organization;
(2) medical or surgical relief or expenses incurred with respect
to bodily injury, sickness, disease or death resulting from
the hazardous properties of nuclear material and arising out
of the operation of a nuclear facility by any person or
organization in the United States, its territories or
possessions, Puerto Rico or the Canal Zone;
(3) injury, sickness, disease, death or destruction resulting
from hazardous properties of nuclear material, if (A) the
nuclear material (i) is at any nuclear facility owned by or
operated by or on behalf of any of the Certain Parties in
the United States, its territories or possessions, Puerto
Rico or the Canal Zone or (ii) has been discharged or
dispersed therefrom, (B) such nuclear material is contained
in spent fuel or waste at any time possessed, handled, used,
processed, stored, transported or disposed by or on behalf
of any of the Certain Parties in the United States, its
territories or possessions, Puerto Rico or the Canal Zone or
(C) the injury arises out of the furnishing by any of the
Certain Parties of services, materials, parts or equipment
in connection with the planning, construction, maintenance,
operation or use of a nuclear facility, but if such facility
is located within the United States of America, its
territories or possessions or Canada, this clause (3)(C)
applies only to injury to or destruction of property at such
nuclear facility;
(4) As used in this Section (H):
(A) "hazardous properties" included radioactive, toxic or
explosive properties; "nuclear material" means source
material, special nuclear material or by-product
material; "source material," "special nuclear material"
and "by-product material" have the meanings given them
by the Atomic Energy Act of 1954 or in law amendatory
thereof; "spent fuel" means any fuel element or fuel
component, solid or liquid which has been used or
exposed to radiation in a nuclear reactor; "waste"
means any waste material (i) containing by-product
materials and (ii) resulting from the operation by a
person or organization of nuclear facility included
within the definition of nuclear facility under clauses
(B)(i) or (B)(ii) (below):
(B) "nuclear facility" means
(i) any nuclear reactor;
(ii) any equipment or device designed or used for (x)
separating the isotopes of uranium or plutonium,
(y) processing or utilizing spent fuel, or (z)
handling processing or packaging waste;
(iii) any equipment or device used for the processing,
fabricating or alloying of special nuclear
material if at any time the total amount of such
material in the custody of the Insured at such
premises where such equipment or device is
located consists of or contains more than 25
grams of plutonium or uranium 233 or combination
thereof or more than 250 grams of uranium 235;
(iv) any structure, basin, excavation, premises or
place prepared for the storage or disposal of
waste.
(C) "Nuclear facility" includes the site on which any of
the foregoing is located, all operations conducted on
such site and all premises used for such operations.
(D) "Nuclear reactor" means any apparatus designed or used
to sustain nuclear fission in a self-supporting chain
reaction or to contain critical mass of fissionable
material.
(E) With respect to injury or destruction of property, the
word "injury" or "destruction" includes all forms of
radioactive contamination of property or loss of use
thereof or liability or alleged liability of whatsoever
nature directly or indirectly caused by or contributed
to by or arising from ionizing radiations or
contamination by radioactivity outside the United
States, its territories or possessions, Puerto Rico or
the Canal Zone from any nuclear fuel or from any
nuclear waste from the combustion, fission or fusion of
nuclear fuel.
I. EMPLOYEE BENEFITS PROGRAMS EXCLUSION: Notwithstanding any other
provision of this Policy, this coverage shall not apply with
respect to:
(1) any liability or alleged liability arising out of or alleged
to arise out of any negligent act, error or omission of any
Director or Officer, or any other person for whose acts any
Director or Officer is legally liable, in the administration
of Employee Benefits Programs, as defined in subsection (2)
below, including, without limitation, liability or alleged
liability under the Employee Retirement Income Security Act
of 1974, as amended.
(2) As used in this Section I, the term "Employee Benefits
Programs" means group life insurance, group accident or
health insurance, profit sharing plans, pension plans,
employee stock subscription plans, workers' compensation,
unemployment insurance, social benefits, disability
benefits, and any other similar employee benefits.
(3) As used in this Section I, the unqualified word
"administration" means:
(A) giving counsel to employees with respect to the
Employee Benefits Programs;
(B) interpreting the Employee Benefits Programs;
(C) handling of records in connection with the Employee
Benefits Programs; and/or
(D) effective enrollment, termination or cancellation of
employees under the Employee Benefits Programs.
J. INDEMNITY BY DESIGNATED COMPANIES: The Designated Companies
agree with the Company to indemnify their respective Directors
and Officers to the full extent permitted by applicable law. The
Directors and Officers agree that to the extent of any payment of
loss on their behalf or indemnification of them hereunder they
will assign, convey, set over, transfer and deliver to the
Company any and all rights and claims they may have to
indemnification from the Designated Companies and will take all
further steps requested by the Company to assist in prosecution
of such rights and claims, and the Designated Companies hereby
consent to any such assignment, conveyance, set over, transfer or
delivery and agree that any payment by the Company on behalf of
or to indemnify any Director or Officer shall not be raised as a
defense to the Director's or Officer's right to indemnification
from the Designated Companies as asserted by the Company pursuant
hereto.
K. OTHER CONDITIONS: This Policy is subject to the following
additional conditions:
(1) REPRESENTATION
Except as respects the giving of notice to exercise extended
discovery under Paragraph VI(B), the Named Company or such
other person as it shall designate in Item 6 of the
Declarations shall represent the Named Company, each of the
Designated Companies and each Officer and Director of the
Named Company and the Designated Companies in all matters
under this Policy, including, without limitation, payment of
premium, negotiation of the terms of renewal and/or
reinstatement and the adjustment, settlement and payment of
claims.
(2) CHANGES
Notice to or knowledge possessed by any person shall not
effect waiver or change in any part of this Policy or estop
the Company from asserting any right under the terms of this
Policy; nor shall the terms of this Policy be waived or
changed, except by endorsement issued to form a part hereof,
signed by the Company or its authorized representative.
(3) ASSIGNMENT
Assignment of interest under this Policy shall not bind the
Company unless and until consent is endorsed hereon.
(4) ARBITRATION
Any dispute arising under this Policy shall be finally and
fully determined in London, England under the provisions of
the English Arbitration Act of 1950, as amended and
supplemented, by a Board composed of three arbitrators to be
selected for each controversy as follows:
Any party to the dispute may, once a claim or demand on his
part has been denied or remains unsatisfied for a period of
twenty (20) calendar days by any other, notify the others of
its desire to arbitrate the matter in dispute and at the
time of such notification the party desiring arbitration
shall notify any other party or parties of the name of the
arbitrator selected by it. Any party or parties who have
been so notified shall within ten (10) calendar days
thereafter select an arbitrator and notify the party
desiring arbitration of the name of such second arbitrator.
If the party or parties notified of a desire for arbitration
shall fail or refuse to nominate the second arbitrator
within ten (10) calendar days following the receipt of such
notification, the party who first served notice of a desire
to arbitrate will, within an additional period of ten (10)
calendar days, apply to a judge of the High Court of England
for the appointment of a second arbitrator and in such a
case the arbitrator appointed by such a judge shall be
deemed to have been nominated by the party or parties who
failed to select the second arbitrator. The two
arbitrators, chosen as above provided, shall within ten (10)
calendar days after the appointment of the second arbitrator
choose a third arbitrator. In the event of the failure of
the first two arbitrators to agree on a third arbitrator
within said ten (10) calendar day period, any of the parties
may within a period of ten (10) calendar days thereafter,
after notice to the other party or parties, apply to a judge
of the High Court of England for the appointment of a third
arbitrator and in such case the person so appointed shall be
deemed and shall act as the third arbitrator. Upon
acceptance of the appointment by said third arbitrator, the
Board of Arbitration for the controversy in question shall
be deemed fixed. All claims, demands, denials of claims and
notices pursuant to this Section (K)(iv) shall be deemed
made if in writing and mailed to the last known address of
the other party or parties.
The Board of Arbitration shall fix, by a notice in writing
to the parties involved, a reasonable time and place for the
hearing and may in said written notice or at the time of the
commencement of said hearing, at the option of said Board,
prescribe reasonable rules and regulations governing the
course and conduct of said hearing.
The Board shall, within ninety (90) calendar days following
the conclusion of the hearing, render its decision on the
matter or matters in controversy in writing and shall cause
a coy thereof to be served on all the parties thereto. In
case the Board fails to reach a unanimous decision, the
decision of the majority of the members of the Board shall
be deemed to be the decision of the Board and the same shall
be final and binding on the parties thereto, and such
decision shall be a complete defense to any attempted appeal
or litigation of such decision in the absence of fraud or
collusion.
All costs of arbitration shall be borne equally by the
parties to such arbitration.
The Company and the Insured agree that in the event that
claims for indemnity or contribution are asserted in any
action or proceeding against the Company by any of the
Insured's other insurers in any jurisdiction or forum other
than that set forth in this Section (K)(iv), the Insured
will in good faith take all reasonable steps requested by
the Company to assist the Company in obtaining a dismissal
of these claims (other than on the merits) and will, without
limitation, undertake to the court or other tribunal to
reduce any judgment or award against such other insurers to
the extent that the court or tribunal determines that the
Company would have been liable to such insurers for
indemnity or contribution pursuant to this Policy. The
Insured shall be entitled to assert claims against the
Company for coverage under this Policy, including, without
limitation, for amounts by which the Insured reduced its
judgment against such other insurers in respect of such
claims for indemnity or contribution in an arbitration
between the Company and the Insured pursuant to this Section
(K)(iv); provided, however, that the Company in such
arbitration in respect of such reduction of any judgment
shall be entitled to raise any defenses under this Policy
and any other defenses (other than jurisdictional defenses)
as it would have been entitled to raise in the action or
proceeding with such insurers.
(5) GOVERNING LAW AND INTERPRETATION
This Policy shall be governed by and construed in accordance
with the internal laws of the State of New York, except
insofar as such laws may prohibit payment in respect of
punitive damages hereunder; provided, however, that the
provisions, stipulations, exclusions and conditions of this
Policy are to be construed in an evenhanded fashion as
between the Insured and the Company; without limitation,
where the language of this Policy is deemed to be ambiguous
or otherwise unclear, the issue shall be resolved in the
manner most consistent with the relevant provisions,
stipulations, exclusions and conditions (without regard to
authorship of the language, without any presumption or
arbitrary interpretation or construction in favor of either
the Insured or the Company and without reference to parol
evidence).
(6) LIABILITY OF THE COMPANY
The Named Company, the Designated Companies and the
Directors and Officers agree that the liability and
obligations of the Company hereunder shall be satisfied from
the funds of the Company alone and that the individual
shareholders of the Company shall have no liability
hereunder.
(7) HEADINGS
The descriptions in the headings and subheadings of this
Policy are inserted solely for convenience and do not
constitute any part of the terms and conditions hereof.
X.L. INSURANCE COMPANY, LTD.
By: /s/PAUL B. MILLER
PAUL B. MILLER
Title: VICE PRESIDENT
Date: SEPTEMBER 20, 1994
SCHEDULE A
All Subsidiaries of the Named Insured
Insured: THE PROCTER & GAMBLE COMPANY
Policy No: XLD+0-00364-94
Endorsement No: 1
Effective Date: JUNE 30, 1994
__________________________________________________________________________
POLICY INTERPRETATION ENDORSEMENT
It is agreed that Condition K(5) is hereby deleted and the following is
substituted therefore:
"(5) Law of Construction and Interpretation
"This Policy shall be construed in accordance with the internal laws
of the State of New York, except insofar as such laws:
"(a) may prohibit indemnity in respect of punitive damages hereunder;
"(b) pertain to regulation under the New York Insurance Law, or
regulations issued by the Insurance Department of the State of New
York pursuant thereto, applying to insurers doing insurance business,
or issuance, delivery or procurement of policies of insurance, within
the State of New York or as respects risks or insureds situated in the
State of New York; or
"(c) are inconsistent with any provision of this Policy;
"provided, however, that the provisions, stipulations, exclusions and
conditions of this Policy are to be construed in an evenhanded fashion
as between the Insured and the Company; without limitation, where the
language of this Policy is deemed to be ambiguous or otherwise
unclear, the issue shall be resolved in the manner most consistent
with the relevant provisions, stipulations, exclusions and conditions
(without regard to authorship of the language, without any presumption
or arbitrary interpretation or construction in favor of either the
Insured or the Company and without reference to parol or other
extrinsic
evidence)."
X.L. INSURANCE COMPANY, LTD.
By: /s/PAUL B. MILLER
PAUL B. MILLER
Title: VICE PRESIDENT
Date: SEPTEMBER 20, 1994
Ref: OD247.01
XL
Insured: THE PROCTER & GAMBLE COMPANY
Policy No: XLD+0-00364-94
Endorsement No: 2
Effective Date: JUNE 30, 1994
___________________________________________________________________________
DIRECTORS' AND OFFICERS' COVERAGE ENDORSEMENT
Notwithstanding any other provision of the Policy or this Endorsement,
if the Lead Policy provides coverage for any person acting in the capacity
as a Director or Officer of a company or entity which is not an Insured
Company under the Policy and this Endorsement, no such coverage shall be
provided pursuant to the Policy and/or this Endorsement unless (a) it is
indicated below that "Outside Positions" coverage is being afforded, (b)
such coverage is subject to a retention (whether self-insured and/or
covered by underlying policy(ies)) in the amount listed below which shall
be deemed to be listed in Item 4 of the Declarations, and such coverage in
any event shall apply in excess of all Primary and Underlying Excess
Insurance listed in Item 4 of the Declarations, and (c) such coverage is
subject to an aggregate sublimit in the amount listed below, which sublimit
shall be the maximum liability of the Company for all losses in respect of
such coverage during the policy period irrespective of the time of payment
by the Company and shall be a sublimit included within and shall not
increase the Aggregate Limit of Liability stated in Item 2 of the
Declarations.
It is further understood and agreed that this extension of cover shall not
apply to any person acting as a Director or Officer of the following
companies:
(a) Corporate Officers and Directors Assurance Ltd.
(b) Corporate Officers and Directors Assurance Holdings Ltd.
(c) Exel Ltd.
(d) X. L Insurance Company, Ltd.
Outside Positions Coverage: YES - As per
schedule provided by
the Named Insured
Outside Positions Coverage (Self-Insured) Retention: $25,000,000
Outside Positions Coverage Aggregate Sublimit: $25,000,000
X.L. INSURANCE COMPANY, LTD.
By: /s/PAUL B. MILLER
PAUL B. MILLER
Title: VICE PRESIDENT
Date: SEPTEMBER 20, 1994
Ref: 0D234.01-R
XL
Insured: THE PROCTER & GAMBLE COMPANY
Policy No: XLD+0-00364-94
Endorsement No: 3
Effective Date: JUNE 30, 1994
___________________________________________________________________________
AMENDMENT TO DECLARATIONS PAGE
It is agreed that as of the Effective Date shown above, Item 1(a) NAMED
COMPANY of the Declarations is amended to include OFFICERS OF OPERATING
UNITS OF THE PROCTER & GAMBLE COMPANY.
X.L. INSURANCE COMPANY, LTD.
By: /s/PAUL B. MILLER
PAUL B. MILLER
Title: VICE PRESIDENT
Date: SEPTEMBER 20, 1994
Ref: 0D242.01
XL
Exhibit (99.3)
--------------
Directors and Officers (Second) Excess Liability Policy
PARK INTERNATIONAL LIMITED
A.C.E. INSURANCE COMPANY, LTD.
DIRECTORS AND OFFICERS LIABILITY INSURANCE POLICY
THIS IS A CLAIMS MADE POLICY. Except as otherwise provided herein, this
policy covers only claims first made against the Insureds during the Policy
Period. PLEASE READ THIS POLICY CAREFULLY.
DECLARATIONS
____________
Policy No.: PG-7331D
Item 1. Insured Company: THE PROCTER & GAMBLE COMPANY/
OFFICERS OF OPERATING UNITS OF
PROCTER & GAMBLE COMPANY
Principal Address: One Procter & Gamble Plaza
Cincinnati, Ohio 45202
U.S.A.
Item 2. Schedule of Underlying Policies:
Insurer Policy Limits Policy
Number Period
_______ ______ ______ ______
Primary Policy CODA PG-106C $25M 6/30/94-97
Excess Policies X.L. XLD&O-00364-94 $25M 6/30/94-95
Uninsured retention under primary insurance: $NIL each Insured Person
each Loss, but in no event exceeding $NIL in the aggregate each Loss
for all Insured Persons and $ N/A each Loss for the Insured Company.
Item 3. Followed Policy: Insurer: CODA
Policy No.: PG-106C
Item 4. Policy Period: From 12:01 A.M. JUNE 30, 1994
To 12:01 A.M. JUNE 30, 1995
Standard Time at the address of the
Insured.
Item 5. Aggregate Limit of Liability $45,000,000 U.S. dollars each
Policy Year for all Loss paid on behalf of all Insureds
arising from all claims first made during such Policy Year.
Item 6. One Year Premium: $140,000
Three Year Premium: $ N/A
(Prepaid)
Discovery Period Premium: 100% of the Policy Period Premium
Item 7. Insurer: A.C.E. Insurance Company, Ltd.
P.O. Box HM 1015
Hamilton, Bermuda HM DX
Telex: 3543 ACEILBA
Telecopy: (809) 295-5221
Countersigned at Hamilton, Bermuda:
Date: October 28, 1994 /s/PAUL D. TANNOCK
Authorized Representative
THESE DECLARATIONS, TOGETHER WITH THE COMPLETED AND SIGNED APPLICATION AND
THE POLICY FORM ATTACHED HERETO, CONSTITUTE THE INSURANCE POLICY.
I. INSURING CLAUSE
In consideration of the payment of the premium and in reliance upon
all statements made in the application form including the information
furnished in connection therewith, and subject to all terms, conditions,
exclusions and limitations of this policy, the Insurer agrees to provide
insurance coverage to the Insured Persons and, if applicable, the Insured
Company in accordance with the terms, conditions, exclusions and
limitations of the Followed Policy.
II. LIMIT OF LIABILITY
A. It is expressly agreed that liability for any covered Loss with
respect to claims first made in each Policy Year shall attach to
the Insurer only after the insurers of the Underlying Policies,
the Insured Company and/or the Insured Persons shall have paid,
admitted or been held liable to pay the full amount of the
Underlying Limit for such Policy Year. The Insurer shall then be
liable to pay only covered Loss in excess of such Underlying
Limit up to its Aggregate Limit of Liability as set forth in Item
5 of the Declarations, which shall be the maximum aggregate
liability of the Insurer under this policy with respect to all
claims first made in each Policy Year against all Insured Persons
irrespective of the time of payment by the Insurer.
B. Multiple claims based upon or arising out of the same, repeated,
interrelated or causally connected Wrongful Acts, whether made
against the same or different Insured Persons, shall be deemed to
be a single claim first made in the earliest Policy Year in which
the first of such multiple claims is made against any Insured
Person; the Aggregate Limit of Liability shall apply only once to
such multiple claims.
C. In the event and only in the event of the reduction or exhaustion
of the Underlying Limit by reason of the insurers of the
Underlying Policies, the Insured Company and/or the Insured
Persons paying, admitting or being held liable to pay Loss
otherwise covered hereunder, this policy shall: (i) in the event
of reduction, pay excess of the reduced Underlying Limit, and
(ii) in the event of exhaustion, continue in force as primary
insurance; provided always that in the latter event this policy
shall only pay excess of the retention applicable to the primary
insurance as set forth in Item 2 of the Declarations, which
retention shall be applied to any subsequent Loss in the same
manner as specified in such primary insurance.
D. Notwithstanding any of the terms of this policy which might be
construed otherwise, this policy shall drop down only in the
event of reduction or exhaustion of the Underlying Limit and
shall not drop down for any other reason including, but not
limited to, uncollectability (in whole or in part) of any
underlying insurance. The risk of uncollectability of such
underlying insurance (in whole or in part) whether because of
financial impairment or insolvency of an underlying insurer or
for any other reason, is expressly retained by the Insured
Persons and the Insured Company and is not in any way or under
any circumstances insured or assumed by the Insurer.
III. UNDERLYING INSURANCE
A. This policy is subject to the same warranties, terms, conditions,
exclusions and limitations (except as regards the premium, the
amount and limits of liability, the policy period and except as
otherwise provided herein) as are contained in or as may be added
to the Followed Policy.
B. It is a condition of this policy that the Underlying Policies
shall be maintained in full effect with solvent insurers during
the policy period listed in Item 2 of the Declarations except for
any reduction or exhaustion of the aggregate limits contained
therein by reason of Loss paid thereunder (as provided for in
Section II(C) above). Unless the Insurer otherwise agrees in
writing, this policy shall: (i) immediately and automatically
terminate on the date any of the Underlying Policies ceases to be
in full effect; and (ii) automatically terminate 30 days
following the date an insurer of any Underlying Policy becomes
subject to a receivership, liquidation, dissolution,
rehabilitation or any similar proceeding or is taken over by any
regulatory authority unless the Insured Company obtains
replacement coverage for such Underlying Policy within such 30
day period. In the event this policy automatically terminates
pursuant to this Section III(B), the Insurer shall retain the pro-
rata proportion of the premium. Payment or tender of any
unearned premium by the Insurer shall not be a condition
precedent to the effectiveness of such termination, but such
payment shall be made as soon as practicable.
C. If during the Policy Period or any discovery period the terms,
conditions, exclusions or limitations of the Followed Policy are
changed in any manner, the Insured Company or the Insured Persons
shall as a condition precedent to their rights under this policy
give to the Insurer as soon as practicable written notice of the
full particulars thereof. This policy shall become subject to
any such changes upon the effective date of the changes in the
Followed Policy, provided that the Insured Company shall pay any
additional premium reasonably required by the Insurer for such
changes.
IV. GENERAL CONDITIONS
A. Discovery Period: If the Insurer or the Insured Company fails or
refuses to renew or cancels this policy, or if this policy
automatically terminates pursuant to Section III(B), the Insured
Company or the Insured Persons shall have the right, upon payment
of an additional premium as set forth in Item 6 of the
Declarations, to elect an extension of the coverage granted by
this policy, but only for any Wrongful Act committed, attempted
or allegedly committed or attempted prior to the effective date
of such nonrenewal, cancellation or termination. Any such
election shall be made in writing in the time and manner and for
the discovery period stated in the Followed Policy.
B. Application of Recoveries: All recoveries or payments recovered
or received subsequent to a Loss settlement under this policy
shall be applied as if recovered or received prior to such
settlement and all necessary adjustments shall then be made
between the Insured Company or the Insured Person and the
Insurer, provided always that the foregoing shall not affect the
time when Loss under this policy shall be payable.
C. Notice: All notices to the Insurer under any provisions of this
policy shall be given by prepaid courier or electronic service
properly addressed to the Insurer at its address as shown in the
Declarations. Notice so given shall be deemed to be received by
the Insurer on the next succeeding day.
D. Cooperation: The Insured Company and the Insured Persons shall
give the Insurer such information and cooperation as it may
reasonably require.
E. Premium: The premium under this policy is a flat premium and is
not subject to adjustment except as otherwise provided herein.
The premium shall be paid to the Insurer at its address as shown
in the Declarations.
F. Cancellation Clause: This policy may be cancelled by the Insured
Company at any time by written notice or surrender of this policy
to the Insurer. This policy may also be cancelled by, or on
behalf of, the Insurer by delivering to the Insured Company or by
mailing to the Insured Company by registered, certified or other
first class mail, at the address shown in the Declarations,
written notice stating when, not less than (365) days thereafter,
the cancellation shall become effective. The mailing of such
notice as aforesaid shall be sufficient proof of notice, and this
policy shall terminate at the date and hour specified in such
notice. If this policy shall be cancelled by the Insured
Company, the Insurer shall retain the customary short rate
proportion of premium hereon. If this policy shall be cancelled
by or on behalf of the Insurer, the Insurer shall retain the pro-
rata proportion of the premium hereon. Payment or tender of any
unearned premium by the Insurer shall not be a condition
precedent to the effectiveness of cancellation, but such payment
shall be made as soon as practicable.
G. Capacity: Notwithstanding any other provision of this policy,
coverage hereunder shall not apply with respect to a Wrongful Act
by any Insured Person in his capacity as director or officer of
the Insurer.
H. Changes: Notice to or knowledge possessed by any person shall
not effect waiver or change in any part of this policy or estop
the Insurer from asserting any right under the terms of this
policy; nor shall the terms of this policy be waived or changed,
except by endorsement issued to form a part hereof, signed by the
Insurer or its authorized representative.
I. Arbitration: Any dispute arising under or relating to this
policy, or the breach thereof, shall be finally and fully
determined in Hamilton, Bermuda under the provisions of the
Bermuda Arbitration Act of 1986, as amended and supplemented, by
an Arbitration Board composed of three arbitrators who shall be
disinterested and active or retired business executives having
knowledge relevant to the matters in dispute, and who shall be
selected for each controversy as follows:
Either party to the dispute, once a claim or demand on its part
has been denied or remains unsatisfied for a period of twenty
(20) calendar days by the other party, may notify the other party
of its desire to arbitrate the matter in dispute and at the time
of such notification the party desiring arbitration shall notify
the other party of the name of the arbitrator selected by it.
The other party who has been so notified shall within ten (10)
calendar days thereafter select an arbitrator and notify the
party desiring arbitration of the name of such second arbitrator.
If the party notified of a desire for arbitration shall fail or
refuse to nominate the second arbitrator within ten (10) calendar
days following the receipt of such notification, the party who
first served notice of a desire to arbitrate will, within an
additional period of ten (10) calendar days, apply to the Supreme
Court of Bermuda for the appointment of a second arbitrator and
in such a case the arbitrator appointed by the Supreme Court of
Bermuda shall be deemed to have been nominated by the party who
failed to select the second arbitrator. The two arbitrators,
chosen as above provided, shall within ten (10) calendar days
after the appointment of the second arbitrator choose a third
arbitrator. In the event of the failure of the first two
arbitrators to agree on a third arbitrator within the said ten
(10) calendar day period, either party may within a period of ten
(10) calendar days thereafter, after notice to the other party,
apply to the Supreme Court of Bermuda for the appointment of a
third arbitrator and in such case the person so appointed shall
be deemed and shall act as the third arbitrator. Upon acceptance
of the appointment by said third arbitrator, the Arbitration
Board for the controversy in question shall be deemed fixed.
The Arbitration Board shall fix, by a notice in writing to the
parties involved, a reasonable time and place for the hearing and
may in said written notice or at the time of the commencement of
said hearing, at the option of said Arbitration Board, prescribe
reasonable rules and regulations governing the course and conduct
of said hearing.
The Board, shall, within ninety (90) calendar days following the
conclusion of the hearing, render its decision on the matter or
matters in controversy in writing and shall cause a copy thereof
to be served on all parties thereto. In case the Board fails to
reach a unanimous decision, the decision of the majority of the
members of the Board shall be deemed to be the decision of the
Board.
Each party shall bear the expense of its own arbitrator. The
remaining cost of the arbitration shall be borne equally by the
parties to such arbitration.
All awards made by the Arbitration Board shall be final and no
right of appeal shall lie from any award rendered by the
Arbitration Board. The parties agree that the Supreme Court of
Bermuda: (i) shall not grant leave to appeal any award based upon
a question of law arising out of the award; (ii) shall not grant
leave to make an application with respect to an award; and (iii)
shall not assume jurisdiction upon any application by a party to
determine any issue of law arising in the course of the
arbitration proceeding, including but not limited to whether a
party has been guilty of fraud.
All awards made by the Arbitration Board may be enforced in the
same manner as a judgment or order from the Supreme Court of
Bermuda and judgment may be entered pursuant to the terms of the
award by leave from the Supreme Court of Bermuda.
The Insurer and the Insureds agree that in the event that claims
for indemnity or contribution are asserted in any action or
proceeding against the Insurer by any of the Insureds' other
insurers in any jurisdiction or forum other than that set forth
in this clause, the Insureds will in good faith take all
reasonable steps requested by the Insurer to assist the Insurer
in obtaining a dismissal of these claims (other than on the
merits) and will, without limitation, undertake to the court or
other tribunal to reduce any judgment or award against such other
insurers to the extent that the court or tribunal determines that
the Insurer would have been liable to such insurers for indemnity
or contribution pursuant to this policy. The Insureds shall be
entitled to assert claims against the Insurer for coverage under
this policy, including, without limitation, for amounts by which
the Insureds reduced its judgment against such other insurers in
respect of such claims for indemnity or contribution, in an
arbitration between the Insurer and the Insureds pursuant to this
clause; provided, however, that the Insurer in such arbitration
in respect of such reduction of any judgment shall be entitled to
raise any defenses under this policy and any other defenses
(other than jurisdictional defenses) as it would have been
entitled to raise in the action or proceeding with such insurers.
J. Governing Law and Interpretation: This policy shall be construed
and enforced in accordance with the internal laws of the State of
New York (with the exception of Section IV(I), which shall be
construed and enforced in accordance with the laws of Bermuda),
except insofar as such laws may prohibit payment hereunder in
respect of punitive damages; provided, however, that the terms,
conditions, exclusions and limitations of this policy are to be
construed in an evenhanded fashion as between the Insureds and
the Insurer. Without limitation, where the language of this
policy is deemed to be ambiguous or otherwise unclear, the issues
shall be resolved in the manner most consistent with the relevant
terms, conditions, exclusions and limitations (without regard to
authorship of the language, without any presumption or arbitrary
interpretation or construction in favour of either the Insureds
or the Insurer and without reference to parol evidence).
K. Liability of the Company: The Insured Company, the Insured
Persons and the Insurer agree that the liability and obligations
of the Insurer hereunder shall be satisfied from the funds of the
Insurer alone and that the individual shareholders of the Insurer
shall have no liability hereunder to the Insured Company or the
Insured Persons.
L. Headings: The descriptions in the headings and sub-headings of
this policy are inserted solely for convenience and do not
constitute any part of the terms or conditions hereof.
M. Currency: The premiums and any Loss under this policy are
payable in United States currency.
N. Assignment: Assignment of interest under this policy shall not
bind the Insurer unless and until its consent is endorsed hereon.
V. DEFINITIONS
A. The terms "Wrongful Act" and "Loss" shall have the same meanings
in this policy as are attributed to them in the Followed Policy.
The terms "Insurer", "Followed Policy", "Underlying Policies",
"Policy Period" and "Aggregate Limit of Liability" shall have the
meanings attributed to them in the Declarations.
B. The term "Insured Persons" shall mean those directors, officers
and other individuals insured by the Followed Policy.
C. The term "Insured Company" shall mean the entity named in Item 1
of the Declarations and any subsidiaries or affiliates thereof
insured by the Followed Policy.
D. The term "Policy Year" shall mean the period of one year
following the inception of this policy or any anniversary, or, if
the time between inception or any anniversary and the termination
of this policy is less than one year, the lesser period. If the
discovery period hereunder is exercised as a result of the
cancellation of or refusal to renew this policy by the Insurer,
such period shall be considered a separate Policy Year. If the
discovery period is otherwise exercised, such period shall be
part of the last Policy Year and not an additional period.
E. The term "Underlying Limit" shall mean an amount equal to the
aggregate of all limits of liability as set forth in Item 2 of
the Declarations for all Underlying Policies, plus the uninsured
retention, if any, applicable to the primary insurance as set
forth in Item 2 of the Declarations.
IN WITNESS WHEREOF, this policy has been made, entered into and
executed by the Insurer in Hamilton, Bermuda as of the date set forth in
the Declarations.
A.C.E. INSURANCE COMPANY, LTD.
By: /s/K. P. WHITE /s/W. A. SCOTT
Senior Vice President President
ADDITIONAL/RETURN PREMIUM: NIL
CANCELLATION ENDORSEMENT
------------------------
(1 YEAR POLICY)
It is agreed and acknowledged that Section IV(F) of this policy is deleted
in its entirety.
It is further agreed and acknowledged that this policy shall not be subject
to Clause 7 (Automatic Extension) of the Followed Policy.
The effective date of this endorsement is June 30, 1994
All other terms and conditions remain unchanged.
This endorsement is attached to and made a part of Policy No. PG-7331D
of A.C.E. INSURANCE COMPANY, LTD.
Issued to: THE PROCTER & GAMBLE COMPANY/OFFICERS OF OPERATING UNITS OF
PROCTER & GAMBLE COMPANY
Date of Issue: October 28, 1994
By /s/PATRICK D. TANNOCK
AUTHORISED REPRESENTATIVE
End No. 1
ADDITIONAL/RETURN PREMIUM NIL
DISCOVERY PERIOD ENDORSEMENT
It is agreed and acknowledged that Section IV(A) (Discovery Period) is
deleted and replaced in its entirety by the following:
IV(A)(1) If the INSURER elects not to renew, or the Insured Company
cancels or elects not to renew this POLICY, then the INSURED
persons or INSURED Company shall have the right, upon payment of
an additional premium of 100% of the sum of all premiums
otherwise paid or due for the POLICY YEAR in which such election
is made, to a continuation of the reporting period of this POLICY
in respect of any CLAIMS first made against the INSURED persons
or INSURED Company or any of them during a period (hereinafter
referred to as the "Discovery Period") after the end of the
POLICY PERIOD, but only if the CLAIMS are based on WRONGFUL ACTS
alleged to have been committed prior to the end of the POLICY
PERIOD. Such CLAIMS shall be deemed to have been made during the
last POLICY YEAR provided that notification of each CLAIM is in
accordance with Clause IV C below. The right to elect the
Discovery Period shall terminate, however, unless written notice
of such election together with the additional premium is received
by the INSURER within ten (10) days after the end of the POLICY
PERIOD. Any premium paid for the Discovery Period is not
refundable.
(2) The length of the Discovery Period shall be the same amount of
time as the length of the POLICY PERIOD, subject to a maximum
Discovery Period of one year.
(3) The offer by the INSURER of renewal at a premium different from
the premiums for the expiring POLICY YEAR shall not constitute an
election by the INSURER not to renew this POLICY.
(4) The Discovery Period does not reinstate or increase the LIMIT OF
LIABILITY of this POLICY.
The effective date of this endorsement is June 30, 1994.
All other terms and conditions remain unchanged.
This endorsement is attached to and made a part of Policy No. PG-7331D
of A.C.E. INSURANCE COMPANY, LTD.
Issued to: THE PROCTER & GAMBLE COMPANY/OFFICERS OF OPERATING UNITS OF
PROCTER & GAMBLE COMPANY
Date of Issue: October 28, 1994
End. No. 2 By /s/PATRICK D. TANNOCK
Authorized Representative
ADDITIONAL/RETURN PREMIUM: NIL
CLAUSE III B AMENDATORY ENDORSEMENT
-----------------------------------
In consideration of the premium charged it is hereby understood and agreed
that Clause IIIB (i) and (ii) is amended to read as follows:
B. It is a condition of this policy that the Followed Policies shall be
maintained in full effect with solvent insurers during the policy
period listed in Item 2 of the Declarations except for any reduction
or exhaustion of the aggregate limits contained therein by reason of
Loss paid thereunder (as provided for in Section II (C) above).
Unless the Insurer otherwise agrees in writing, this policy shall:
(i) immediately and automatically terminate on the date any of the
Followed Policies ceases to be in full effect; and (ii) automatically
terminate 30 days following the date an insurer of any Followed Policy
becomes subject to a receivership, liquidation, dissolution,
rehabilitation or any similar proceeding or is taken over by any
regulatory authority unless the Insured Company obtains replacement
coverage for such Followed Policy within such 30 day period. In the
event this policy automatically terminates pursuant to this Section
III(B), the Insurer shall retain the pro-rata proportion of the
premium. Payment or tender of any unearned premium by the Insurer
shall not be a condition precedent to the effectiveness of such
termination, but such payment shall be made as soon as practicable.
The effective date of this endorsement is June 30, 1994
All other terms and conditions remain unchanged.
This endorsement is attached to and made a part of Policy No. PG-7331D
of A.C.E. INSURANCE COMPANY, LTD.
Issued to: THE PROCTER & GAMBLE COMPANY/OFFICERS OF OPERATING UNITS OF
PROCTER & GAMBLE COMPANY
Date of Issue: October 28, 1994
End No. 3 By /s/PATRICK D. TANNOCK
AUTHORISED REPRESENTATIVE
ADDITIONAL/RETURN PREMIUM $ NIL
IT IS UNDERSTOOD AND AGREED THAT SECTION II - A & C IS REPLACED BY THE
FOLLOWING:
A. IT IS EXPRESSLY AGREED THAT LIABILITY FOR ANY COVERED LOSS WITH
RESPECT TO CLAIMS FIRST MADE IN EACH POLICY YEAR SHALL ATTACH TO
THE INSURER ONLY AFTER THE INSURERS OF THE UNDERLYING POLICIES,
THE INSURED COMPANY AND/OR THE INSURED PERSONS SHALL HAVE PAID,
IN THE APPLICABLE LEGAL CURRENCY, THE FULL AMOUNT OF THE
UNDERLYING LIMITS FOR SUCH POLICY YEAR. THE INSURER SHALL THEN
BE LIABLE TO PAY ONLY COVERED LOSS IN EXCESS OF SUCH UNDERLYING
LIMIT UP TO ITS AGGREGATE LIMIT OF LIABILITY AS SET FORTH IN ITEM
5 OF THE DECLARATIONS, WHICH SHALL BE THE MAXIMUM AGGREGATE
LIABILITY OF THE INSURER UNDER THIS POLICY WITH RESPECT TO ALL
CLAIMS FIRST MADE IN EACH POLICY YEAR AGAINST ALL INSURED PERSONS
IRRESPECTIVE OF THE TIME OF PAYMENT BY THE INSURER.
C. IN THE EVENT AND ONLY IN THE EVENT OF THE REDUCTION OR EXHAUSTION
OF THE UNDERLYING LIMITS BY REASON OF THE INSURERS OF THE
UNDERLYING POLICY, THE INSURED COMPANY AND/OR THE INSURED PERSONS
PAYING, IN THE APPLICABLE LEGAL CURRENCY, LOSS OTHERWISE COVERED
HEREUNDER, THIS POLICY SHALL: (i) IN THE EVENT OF REDUCTION, PAY
EXCESS OF THE REDUCED UNDERLYING LIMIT, AND (ii) IN THE EVENT OF
EXHAUSTION, CONTINUE IN FORCE AS PRIMARY INSURANCE; PROVIDED
ALWAYS THAT IN THE LATTER EVENT THIS POLICY SHALL ONLY PAY EXCESS
OF THE RETENTION APPLICABLE TO THE PRIMARY INSURANCE AS SET FORTH
IN ITEM 2 OF THE DECLARATIONS, WHICH RETENTION SHALL BE APPLIED
TO ANY SUBSEQUENT LOSS IN THE SAME MANNER AS SPECIFIED IN SUCH
PRIMARY INSURANCE.
NOTHING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY
OF THE TERMS, CONDITIONS, EXCLUSIONS OR LIMITATIONS OF THE ABOVE-MENTIONED
POLICY, EXCEPT AS EXPRESSLY STATED HEREIN.
The effective date of this endorsement is June 30, 1994
All other terms and conditions remain unchanged.
This endorsement is attached to and made a part of Policy No. PG-7331D
of A.C.E. INSURANCE COMPANY, LTD.
Issued to: THE PROCTER & GAMBLE COMPANY/OFFICERS OF OPERATING UNITS OF
PROCTER & GAMBLE COMPANY
Date of Issue: OCTOBER 28, 1994
End No. 4 By /s/PATRICK D. TANNOCK
AUTHORISED REPRESENTATIVE
ADDITIONAL/RETURN PREMIUM: NIL
DIRECTORS AND OFFICERS LIABILITY ENDORSEMENT
--------------------------------------------
In consideration of the premium charged it is hereby agreed and
acknowledged that coverage afforded by this Policy is only in respect of
Directors and Officers Liability and not Company Reimbursement.
The effective date of this endorsement is June 30, 1994
All other terms and conditions remain unchanged.
This endorsement is attached to and made a part of Policy No. PG-7331D
of A.C.E. INSURANCE COMPANY, LTD.
Issued to: THE PROCTER & GAMBLE COMPANY/OFFICERS OF OPERATING UNITS OF
PROCTER & GAMBLE COMPANY
Date of Issue: OCTOBER 28, 1994
End No. 5 By /s/PATRICK D. TANNOCK
AUTHORISED REPRESENTATIVE
Exhibit (99.4)
--------------
Directors and Officers (Third) Excess Liability Policy
STARR EXCESS
Liability Insurance Company, Ltd.
---------------------------------
29 Richmond Road, Pembroke HM 08, Hamilton, Bermuda
EXCESS DIRECTORS AND OFFICERS INSURANCE POLICY
NOTICE: EXCEPT TO SUCH EXTENT AS MAY OTHERWISE BE PROVIDED HEREIN, THE
COVERAGE OF THIS POLICY IS LIMITED GENERALLY TO LIABILITY FOR ONLY THOSE
CLAIMS THAT ARE FIRST MADE AGAINST THE INSUREDS AND REPORTED TO THE INSURER
DURING THE POLICY PERIOD. PLEASE READ THE POLICY CAREFULLY AND DISCUSS THE
COVERAGE THEREUNDER WITH YOUR INSURANCE AGENT OR BROKER.
NOTICE: THE LIMIT OF LIABILITY AVAILABLE TO PAY JUDGMENTS OR SETTLEMENTS
SHALL BE REDUCED BY AMOUNTS INCURRED FOR LEGAL DEFENSE. AMOUNTS INCURRED
FOR LEGAL DEFENSE SHALL BE APPLIED AGAINST THE RETENTION AMOUNT.
NOTICE: THE INSURER DOES NOT ASSUME ANY DUTY TO DEFEND.
DECLARATIONS POLICY #: 700029
ITEM 1. NAMED CORPORATION: The Procter and Gamble Company
MAILING ADDRESS: One Procter & Gamble Plaza, Cincinnati, OH 45202
STATE OF INCORPORATION
OF THE NAMED CORPORATION: Ohio
ITEM 2. FOLLOWED POLICY:
INSURER: CODA POLICY NO: PG-106C
ITEM 3. POLICY PERIOD: From: June 30, 1994 To: June 30, 1995
(12:01 A.M. standard time at the address stated in Item 1.)
ITEM 4. LIMIT OF LIABILITY: $50,000,000 aggregate for coverages
combined (including Defense Costs)
EXCESS OF TOTAL UNDERLYING LIMITS OF: $95,000,000
ITEM 5. RETENTIONS:
A. $nil per Director or Officer each Loss, but not exceeding
B. $nil in the aggregate each Loss
ITEM 6. SCHEDULE OF PRIMARY AND UNDERLYING EXCESS POLICIES:
POLICY POLICY
INSURER NUMBER LIMITS PERIOD
PRIMARY POLICY: CODA PG-106C $25,000,000 6/30/94 to 6/30/97
EXCESS POLICIES: X.L. XLD+O-00364-94 $25,000,000 6/30/94 to
6/30/95
ACE PG-7331D $45,000,000 6/30/94 to 6/30/95
ITEM 7. PREMIUM: $125,000
ITEM 8. A. DISCOVERY PERIOD PREMIUM: 100% of
Premium indicated in Item 7.
B. DISCOVERY PERIOD: 365 days.
ITEM 9. NOTICE OF CANCELLATION PERIOD: 60 days.
ITEM 10. ADDRESS OF INSURER FOR ALL NOTICES UNDER THIS POLICY:
STARR EXCESS LIABILITY INSURANCE COMPANY, LTD.
P.O. BOX HM 152
HAMILTON, HM AX
BERMUDA
ITEM 11. POLICY FORM: EXCESS DIRECTORS AND OFFICERS INSURANCE
POLICY SELIC DOO(6/94)
ENDORSEMENTS: #1
/s/ DAVID F. ALLEN
Authorized Representative
Park International Limited
P.O. Box HM 2064
Hamilton HM HX
Bermuda
EXCESS DIRECTORS AND OFFICERS INSURANCE POLICY
In consideration of the payment of the premium, and in reliance upon the
statements made to the Insurer by application forming a part hereof and its
attachments and the material incorporated therein, STARR EXCESS LIABILITY
INSURANCE COMPANY, LTD. herein called the "Insurer", agrees as follows:
I. INSURING AGREEMENTS
This policy shall provide the Insured(s) with Excess Directors and Officers
Insurance coverage in accordance with the same warranties, terms,
conditions, exclusions and limitations of the Followed Policy identified in
Item 2 of the Declarations as they were in existence on the inception date
of this policy (except as regards the premium, the amount and limits of
liability and the policy period) subject to:
(a) the warranties, terms, conditions, exclusions and limitations of this
policy including any endorsement attached hereto, and
(b) provided always that this policy shall, in no event and
notwithstanding any other provision, provide coverage broader than
that provided by the Followed Policy unless such broader coverage is
specifically agreed to by the Insurer and identified as broader
coverage in a written endorsement attached hereto.
II. DEFINITIONS
(a) The term "Director(s) or Officer(s)" and the term "Insured(s)" shall
mean those directors, officers and other natural persons (if any)
insured under the Followed Policy.
(b) The term "Company" shall mean the Named Corporation designated in Item
1 of the Declarations.
(c) The term "Loss" shall have the same meaning in this policy as is
attributed to it in the Followed Policy except that the term "Loss"
shall in no event include civil or criminal fines or penalties,
punitive or exemplary damages, the multiplied portion of multiplied
damages or any amount for which the Insureds are not financially
liable or which are without legal recourse to the Insureds, or matters
which may be deemed uninsurable under the law pursuant to which this
policy shall be construed.
(d) "Policy Period" shall mean the period of time from the inception date
shown in Item 3 of the Declarations to the earlier of the expiration
date shown in Item 3 of the Declarations or the effective date of
cancellation of this policy.
(e) The term "Underlying Policies" shall mean the Primary and Underlying
Excess Policies set forth in Item 6 of the Declarations. The term
"Underlying Insurer(s)" shall mean the insurer(s) of the Underlying
Policies The term "Underlying Limit" shall mean an amount equal to
the aggregate of all the limits of the Underlying Policies combined
(excess of their retentions).
(f) The term "Wrongful Act" and "Subsidiary" shall have the same meanings
in this policy as are attributed to them in the Followed Policy.
III. LIMIT OF LIABILITY
The limit of liability stated in Item 4 of the Declarations is the limit of
the Insurer's liability for all Loss under all Coverages combined, arising
out of all claims first made against the Insureds and reported to the
Insurer during the Policy Period and the Discovery period (if applicable);
however, the limit of liability for the Discovery Period shall be part of,
and not in addition to, the limit of liability for the Policy Period.
Further ,any claim which is made subsequent to the Policy Period or
Discovery Period (if applicable) which pursuant to Clause V(b) is
considered made during the Policy Period or Discovery Period shall also be
subject to the one aggregate limit of liability stated in item 4 of the
Declarations.
It is expressly agreed that liability for any covered Loss with respect to
claims first made and reported during the Policy period shall attach to the
Insurer only after the Underlying Limit, and the Insureds shall have paid
or been held liable to pay the full amount of the Underlying Limit, and the
Insureds shall have paid or been held liable to pay the full amount of the
applicable Retention amount for such Policy Period. In the event and only
in the event of the reduction or exhaustion of the Underlying Limit by
reason of the Underlying Insurers, and/or the Insureds paying or being held
liable to pay Loss otherwise covered hereunder, this policy shall: (i) in
the event of reduction, pay excess of the reduced Underlying Limit, and
(ii) in the event of exhaustion, continue in force as primary insurance;
provided always that in the latter event this policy shall only pay excess
of the Retention amounts set forth in Item 5 of the Declarations, which
Retention amount shall be applied to any subsequent Loss in the same manner
as specified in the Followed Policy; provided however, that the Retention
amounts set forth in Item 5 shall not apply if the retention amount of any
Underlying Policy has been applied to such Loss.
This policy shall pay only in the event of reduction or exhaustion of the
Underlying Limit as described above and shall not drop down for any reason
including, but not limited to, uncollectability (in whole or in part) of
the Underlying Limit, existence of a sub-limit of liability in any
Underlying Policy, or any Excess Policy containing terms and conditions
different from the Followed Policy. The risk of uncollectability of such
underlying insurance (in whole or in part) whether because of financial
impairment or insolvency of an Underlying Insurer, the application of any
underlying sub-limit of liability or differing terms and conditions or for
any other reason is expressly retained by the Insureds and is not in any
way or under any circumstances insured or assumed by the Insurer.
IV. UNDERLYING LIMITS
It is a condition of this policy that the Underlying Policies shall be
maintained in full effect with solvent insurers during the Policy Period
except for any reduction or exhaustion of the aggregate limits contained
therein by reason of Loss paid thereunder (as provided for in Clause III
above). Failure to comply with the foregoing shall not invalidate this
policy, but in the event of such failure, the Insurer shall be liable only
to the extent that it would have been liable had the Insureds and the
company complied with such condition.
Unless the Insurer otherwise agrees in writing, this policy shall
immediately and automatically terminate if the Company fails to notify the
Insurer as set forth in Clause V(c) of this policy that any of the
Underlying Policies has ceased to be in full effect. If such notification
is made, then this policy shall continue in effect but the Insured(s) (or
an insurer providing replacement coverage if such replacement coverage is
obtained) shall be liable for the amount of the underlying limit of such
ceased Underlying Policy and the Insurer shall be liable only to the extent
that it would have been liable had the Underlying Policy not ceased.
Unless the Insurer otherwise agrees in writing, this policy shall
automatically terminate thirty (30) days following the date any Underlying
Insurer becomes subject to a receivership, liquidation, dissolution,
rehabilitation or any similar proceeding or is taken over by any regulatory
authority unless the Named Corporation obtains replacement coverage for
such Underlying Policy within such thirty (30) day period.
If during the Policy Period or any Discovery Period the terms, conditions,
exclusions or limitations of the Followed Policy are changed in any manner,
the Company or the Insureds shall as a condition precedent to the Insureds
rights under this policy give to the Insurer as soon as practicable written
notice of the full particulars thereof. This policy shall become subject
to any such changes upon the effective date of the changes in the Followed
Policy, but only upon the condition that the Insurer agrees to follow such
changes by written endorsement attached hereto and the Named Corporation
agrees to any additional premium and/or amendment of the provisions of this
policy required by the Insurer relating to such changes. Further, such new
coverage is conditioned upon the Named Corporation paying when due any
additional premium required by the Insurer relating to such changes.
V. NOTICES AND CLAIM REPORTING PROVISIONS
(a) The company or the Insureds shall, as a condition precedent to the
obligations of the Insurer under this policy, give written notice to
the Insurer at the address indicated in Item 10 of the Declarations
and all Underlying Insurers as soon as practicable during the Policy
Period, or during the Discovery Period (if applicable), of any claim
made against the Insureds.
(b) If during the Policy period or during the Discovery Period (if
applicable) (i) written notice of a claim has been given to the
Insurer pursuant to Clause V(a) above, or (ii) to the extent permitted
by the terms and conditions of the Followed Policy, written notice of
circumstances that might reasonably be expected to give rise to a
claim, has been given to the Insurer and all Underlying Insurers, then
any claim which is subsequently made against the Insureds and reported
to the Insurer and all Underlying Insurers alleging, arising out of,
based upon or attributable to the facts alleged in the claim or
circumstances of which such notice has been given, or alleging any
Wrongful Act which is the same as or related to any Wrongful Act
alleged in the claim or circumstances of which such notice has been
given, shall be considered made at the time such claim or
circumstances has been given to the Insurer.
(c) The Company or the Insureds shall, as a condition precedent to the
obligations of the Insurer under this policy, give written notice to
the Insurer of the following events as soon as practicable but in no
event later than thirty (30) days of an Insured or the Company
becoming aware of the event:
(i) The cancellation, nonrenewal of any Underlying Policy or any
Underlying Policy otherwise ceases to be in effect or
uncollectible (in part or in whole); or
(ii) Any insurer or any Underlying Policy becoming subject to a
receivership, liquidation, dissolution, rehabilitation or any
similar proceeding or being taken over by any regulatory
authority; or
(iii)The Named Corporation consolidating with or merging into, or
selling all or substantially all of its assets to, any other
person or entity or group of persons and/or entities acting in
concert; or
(iv) Any person or entity or group of persons and/or entities acting
in concert acquiring an amount of the outstanding securities
representing more than 50% of the voting power for the election of
Directors of the Named Corporation, or acquiring the voting rights
of such an amount of such securities.
VI. CLAIM PARTICIPATION
The Insurer shall have the right, in its sole discretion, but not the
obligation to effectively associate with the Company and the Insureds in
the defense and settlement of any claim that appears to the Insurer to be
reasonably likely to involve the Insurer, including but not limited to
effectively associating in the negotiation of a settlement. The Insureds
shall defend and contest any such claim. The Company and the Insureds
shall give the Insurer full cooperation and such information as it may
reasonably require. The failure of the Insurer to exercise any right under
this paragraph at any point in a claim shall not act as a waive or limit
the right of the Insurer in any manner to exercise such rights at any other
point in a claim including the right to effectively associate in the
negotiation of a settlement.
The Insurer does not under this policy assume any duty to defend. The
Insureds shall not admit or assume any liability, enter into any settlement
agreement, stipulate to any judgment or incur any Defense Costs without the
prior written consent of the Insurer. Only those settlements, stipulated
judgments and Defense Costs which have been consented to by the Insurer
shall be recoverable as Loss under the terms of this policy. The Insurer's
consent shall not be unreasonably withheld, provided that the Insurer shall
be entitled to effectively associate in the defense and the negotiation of
any settlement of any claim in order to reach a decision as to
reasonableness.
VII. DISCOVERY CLAUSE
If the Insurer shall cancel or refuse to renew this policy the Named
Corporation shall have the right, upon payment of the additional percentage
set forth in Item 8A of the Declarations of the full annual premium, to the
period set forth in Item 8B of the Declarations following the effective
date of such cancellation or nonrenewal (herein referred to as the
Discovery Period) in which to give written notice to the Insurer of claims
first made against the Insureds during said period for any Wrongful Act
occurring prior to the end of the Policy Period and otherwise covered by
this policy. As used herein, "full annual premium" means the premium level
in effect immediately prior to the end of the Policy Period.
The rights contained in this clause shall terminate, however, unless
written notice of such election together with the additional premium due is
received by the Insurer within the time period and in the manner set forth
in the Followed Policy. The Discovery Period is not available unless the
Named Corporation has elected the Discovery Period (or Extended Reporting
Period) in all Underlying Policies which have been canceled or non-renewed
by their Underlying Insurers. The additional premium for the Discovery
period shall be fully earned at the inception of the Discovery Period. The
Discovery Period is not cancelable.
The offer by the Insurer of renewal terms, conditions, limits of liability
and/or premiums different from those of the expiring policy shall not
constitute refusal to renew.
VIII. CANCELLATION CLAUSE
This policy may be canceled by the Named Corporation only by mailing
written prior notice to the Insurer or by surrender of this policy to the
Insurer or its authorized agent at the address set forth in Item 10 of the
Declarations and within the time period and in the manner set forth in the
Followed Policy. This policy may also be canceled by or on behalf of the
Insurer by delivering to the Named Corporation or by mailing to the Named
Corporation, by registered, certified, or other first class mail, at the
Named Corporation's address set forth in the Declarations, written notice
stating when, not less than the period set forth in Item 9 of the
Declarations, thereafter the cancellation shall be effective. The mailing
of such notice as aforesaid shall be sufficient proof of notice. The
Policy Period terminates at the date and hour specified in such notice, or
at the date and time of surrender.
If this policy shall be canceled by the Named Corporation, the Insurer
shall retain the customary short rate proportion of the premium hereon.
If this policy shall be canceled by the Insurer, the Insurer shall retain
the pro rata proportion of the premium hereon.
Payment or tender of any unearned premium by the Insurer shall not be a
condition precedent to the effectiveness of cancellation but such payment
shall be made as soon as practicable.
If the period of limitation relating to the giving of notice is prohibited
or made void by any law controlling the construction thereof, such period
shall be deemed to be amended so as to be equal to the minimum period of
limitation permitted by such law.
IX. OTHER CONDITIONS
(a) SUBROGATION
In the event of any payment under this policy, the Insurer shall be
subrogated to the extent of such payment to all the Insureds' rights
of recovery therefor, and the Company and the Insureds shall execute
all papers required and shall do everything that may be necessary to
secure such rights including the execution of such documents necessary
to enable the Insurer effectively to bring suit in the name of the
Insureds.
(b) OTHER INSURANCE
Such insurance as is provided by this policy shall apply only as
excess over any other valid and collectible insurance. Provided,
however, that nothing in the foregoing shall be construed to compel
the Insurer to drop down in the event of the invalidity or
uncollectibility of any Underlying Policy.
(c) NOTICE AND AUTHORITY
It is agreed that the Named Corporation shall act on behalf of the
Insureds with respect to the giving and receiving of notice of claim
or cancellation, the payment of premiums and the receiving of any
return premiums that may become due under this policy, the receipt and
acceptance of any endorsements issued to form a part of this policy
and the exercising or declining to exercise any right to a Discovery
Period.
(d) ASSIGNMENT
This policy and any and all rights hereunder are not assignable
without the written consent of the Insurer.
(e) PREMIUM
The premium under this policy is a flat premium and is not subject to
adjustment except as otherwise provided herein.
(f) CHANGES
Notice to or knowledge possessed by any person shall not effect a
waiver of or a change in any part of this policy or stop the Insurer
from asserting any right under the terms of this policy; nor shall the
terms of this policy be waived or changed, except by endorsement
issued to form a part hereof, signed by the Insurer or its authorized
representative.
(g) CURRENCY
The premiums and any Loss under this policy are payable in United
States currency.
(h) ARBITRATION
Any dispute arising under or relating to this policy, or the breach
thereof, shall be finally and fully determined in Hamilton, Bermuda
under the provisions of the Bermuda Arbitration Act of 1986, as
amended and supplemented, by an Arbitration Board composed of three
arbitrators who shall be disinterested and active or retired business
executives having knowledge relevant to the matters in dispute, and
who shall be selected for each controversy as follows:
Either party to the dispute, once a claim or demand on its part has
been denied or remains unsatisfied for a period of twenty (20)
calendar days by the other party, may notify the other party of its
desire to arbitrate the matter in dispute and at the time of such
notification the party desiring arbitration shall notify the other
party of the name of the arbitrator selected by it. The other party
who has been so notified shall within ten (10) calendar days
thereafter select an arbitrator and notify the party desiring
arbitration o the name of such second arbitrator. If the party
notified of a desire for arbitration shall fail or refuse to nominate
the second arbitrator within ten (10) calendar days following the
receipt of such notification, the party who first served notice of a
desire to arbitrate will, within an additional period of ten (10)
calendar days, apply to the Supreme Court of Bermuda for the
appointment of the second arbitrator and in such a case the arbitrator
appointed by the Supreme Court of Bermuda shall be deemed to have been
nominated by the party who failed to select the second arbitrator.
The two arbitrators, chosen as above provided, shall within ten (10)
calendar days after the appointment of the second arbitrator choose a
third arbitrator. Upon acceptance of the appointment by said third
arbitrator, the Arbitration Board for he controversy in question shall
be deemed fixed.
The Arbitration Board shall fix, by a notice in writing to the parties
involved, a reasonable time and place for the hearing and may in said
written notice or at the time of the commencement of said hearing, at
the option of said Arbitration Board, prescribe reasonable rules and
regulations governing the course and conduct of said hearing.
The Board, shall, within ninety (90) calendar days following the
conclusion of the hearing, render decision on the matter or matters in
controversy in writing and shall cause a copy thereof to be served on
all parties thereto. In case the Board fails to reach a unanimous
decision, the decision of the majority of the members of the Board
shall be deemed to be the decision of the Board.
Each party shall bear the expense of its own arbitrator. The
remaining cost of the arbitration shall be borne equally by the
parties to such arbitration.
All awards made by the Arbitration Board shall be final and no right
of appeal shall lie from any award rendered by the Arbitration Board.
The parties agree that the Supreme Court of Bermuda: (i0 shall not
grant leave to appeal any award based upon a question of law arising
out of the award; (ii) shall not grant leave to make an application
with respect to an award; and (iii) shall not assume jurisdiction upon
any application by a party to determine any issue of law arising in
the course of the arbitration proceeding, including but not limited to
whether a party has been guilty of fraud.
All awards made by the Arbitration Board may be enforced in the same
manner as a judgment or order from the Supreme Court of Bermuda and
judgment may be entered pursuant to the terms of the award by leave
from the Supreme Court of Bermuda.
No person or organization shall have any right under this policy to
join the Insurer as a party to any action against the Insureds or the
company to determine the Insureds liability, nor shall the Insurer be
impleaded by the Insureds or the Company or their legal
representatives. The Insurer and the Insureds agree that in the event
that claims for indemnity or contribution are asserted in any action
or proceeding against the Insurer by any of the Insureds other
insurers in a jurisdiction or forum other than that set forth in this
clause, the Insureds will in good faith take all reasonable steps
requested by the Insurer to assist the Insurer in obtaining a
dismissal of these claims (other than on the merits). The Insureds
and the Company will, without limitation, undertake to the court or
other tribunal to reduce any judgment or award against such other
insurers to the extent that the court or tribunal determines that the
Insurer would have been liable to such insurers for indemnity or
contribution pursuant to this policy. The Insureds shall be entitled
to assert claims against the Insurer for coverage under this policy
including, without limitation, for amounts by which the Insureds
reduced judgment against such other insurers in respect of such claims
for indemnity or contribution, in an arbitration between the Insurer
and the Insureds pursuant to this clause; provided, however, that the
Insurer in such arbitration in respect of such reduction of any
judgment shall be entitled to raise any defenses under this policy and
any other defenses (other than jurisdictional defenses) as it would
have been entitled to raise in the action or proceeding with such
insurers.
(i) CHOICE OF LAW
This policy shall be construed and enforced in accordance with the
internal laws of the State of New York (with the exception of the
procedural law set required by Clause IX(G), which shall be construed
and enforced in accordance with the laws of Bermuda), provided,
however, that, notwithstanding any legal principals to the contrary,
the warranties, terms, conditions, exclusions and limitations of this
policy are to be construed in an evenhanded fashion between the
Insureds, the Company and the Insurer. Without limitation, where the
language of this policy is deemed to be ambiguous or otherwise
unclear, the issues shall be resolved in the manner most consistent
with the warranties, terms, conditions, exclusions and limitations
viewed as a whole (without regard to authorship of the language,
without any presumption or arbitrary interpretation or construction in
favor of either the Insureds, the Company or the Insurer).
(j) HEADINGS
The descriptions in the headings and any subheadings of this policy
(including any titles given to any endorsement attached hereto) are
inserted solely for convenience and do not constitute any part of the
terms or conditions hereof.
IN WITNESSETH WHEREOF, the Company has caused this policy to be signed by
its President and a Secretary.
/s/L. M. MURPHY /s/JOSEPH C. H. JOHNSON
Secretary President
ENDORSEMENT NO: 1
This endorsement, effective: June 30, 1994
forms a part of policy number: 700029
Issued to: The Procter and Gamble Company
by: Starr Excess Liability Insurance Company, Ltd.
In consideration of the premium charged, it is hereby understood and agreed
that the Insurer shall not be liable for Loss in connection with any claim
or claims made against the Directors or Officers:
(a) alleging, arising out of, based upon or attributable to the facts
alleged, or to the same or related Wrongful Acts alleged or contained,
in any claim which has been reported, or in any circumstances of which
notice has been given, under any policy, whether excess or underlying,
of which this policy is a renewal or replacement or which it may
succeed in time;
(b) alleging, arising out of, based upon or attributable to any pending or
prior litigation prior to June 13, 1994, or alleging or derived from
the same or essentially the same facts as alleged in such pending or
prior litigation;
All other terms and conditions remain the same.
Authorized Representative:
/s/DAVID F. ALLEN
DIRECTORS AND OFFICERS INSURANCE AND CORPORATE REIMBURSEMENT APPLICATION
Starr Excess Liability Insurance Company, Ltd.
----------------------------------------------
Name of Insurance Company to which Application is made
(herein called the Insurer)
NOTICE: THE POLICY PROVIDES THAT THE LIMIT OF LIABILITY AVAILABLE TO PAY
JUDGMENTS OR SETTLEMENTS SHALL BE REDUCED BY AMOUNTS INCURRED FOR LEGAL
DEFENSE. FURTHER NOTE THAT AMOUNTS INCURRED FOR LEGAL DEFENSE SHALL BE
APPLIED AGAINST THE RETENTION AMOUNT. IF A POLICY IS ISSUED, THE
APPLICATION WILL BE ATTACHED TO AND BECOME A PART OF THE POLICY, THEREFORE
IT IS NECESSARY THAT ALL QUESTIONS BE ANSWERED ACCURATELY AND COMPLETELY.
IF A POLICY IS ISSUED, IT WILL BE ON A CLAIMS-MADE BASIS.
--------------------------------------------------------------------------
1. APPLICANT'S
(a) Corporation name The Procter & Gamble Company
(b) State of Incorporation Ohio
(c) Date of Incorporation May 5, 1905
(d) Address One Procter & Gamble Plaza
Cincinnati, OH 45202-3314
(e) Nature of business Consumer Products
(f) Primary SIC code(s)
(g) Corporation has continually been operating since 1837.
(h) Total number of locations (please check): one two
more than three X
(i) Does the Applicant operate any retail outlets? Yes No X
(if yes, total number of retail outlets: )
2. (a) Amount of insurance requested: $50 Million
(b) Self-insured retention desired (each loss): $95 Million
3. STOCK OWNERSHIP As of 8/12/94
(a) Total number of voting shares outstanding: 737,951,214
(b) Total number of voting shareholders: 199,750
(c) Total number of voting shares owned by its Directors (direct
and beneficial): 2,260,251
(d) Total number of voting shares owned by its Officers (direct
and beneficial) who are not Directors: 2,230,616
(e) Does any shareholder own five percent or more of the voting
shares directly or beneficially? If so, designate name and
percentage of holdings. (If no such shareholders, check here
"none". )
P&G Profit Sharing and Employee Stock Ownership Plan:
11.4%
(f) Are there any other securities convertible to voting stock.
If so, describe fully. (If none, check here "none". )
Preferred stock is not traded, but is held for
retirees. These shares are convertible to common stock upon
retirement of the participant.
4. (a) Complete list of all Directors of the Corporation named in 1(a)
above by name and affiliation with other corporations. (If
included as an attachment herein, check here )
See Annual Report.
(b) Complete list of all Officers of the Corporation named in 1(a)
above by name and affiliation with other corporations. (If
included as an attachment herein, check here )
See Annual Report.
5. LIST OF ALL DIRECT AND INDIRECT SUBSIDIARY CORPORATIONS:
Business Percentage Date Domestic or Foreign
or Type of of Acquired and Country of
Name Operation Ownership or Created Incorporation
---- ---------- ---------- ---------- -------------------
See Attachment I
Coverage to include all Subsidiaries? Yes X No . If yes, include
complete list of Directors and Officers of each Subsidiary. If no, include
complete list of Directors and Officers of each Subsidiary for which
coverage is requested. If included as an attachment herein, check here .
See Annual Report.
6. Are any plans for merger, acquisition or consolidation of or by the
Applicant or any of its Subsidiaries being considered? Yes X No
Procter & Gamble routinely considers acquisitions and mergers. Other
than those that have been publicly announced, none have been approved
by the Board.
(a) If so, have they been approved by the board of directors?
Yes No Date
(b) If so, have they been submitted to the shareholders for approval?
Yes No X Date for approval
7. Has the Applicant or any of its Subsidiaries filed any registration of
securities under the Securities Act of 1933 or any other offering of
securities within the last year? Yes X No ? Does it
anticipate doing so within the next year? Yes X No . (If
yes, give details and submit offering materials if available).
See SEC attachments provided.
8. There has not been nor is there now pending any claim(s) against any
person proposed for insurance in his or her capacity of either
Director or Officer of the named Applicant or any of its Subsidiaries
except as follows: (Attach complete details. If no such claims,
check here "none". ).
See Attachment II.
9. No Director or Officer has knowledge or information of any act, error
or omission which might give rise to a claim under the proposed policy
except as follows: (Attach complete details. If they have no such
knowledge or information, check here "none". X )
10. Has the Applicant, any of its Subsidiaries or any Director and/or
Officer:
(a) Been involved in any antitrust, copyright or patent litigation?
Yes X No
See Attachment II.
(b) Been charged in any civil or criminal action or administrative
proceeding with a violation of any federal or state antitrust or
fair trade law? Yes X No
See Attachment II
(c) Been charged in any civil or criminal action or administrative
proceeding with a violation of any federal or state securities law
or regulation? Yes No X
(d) Been involved in any representative actions, class actions, or
derivative suites? Yes X No
See Attachment II.
(IF ANY OF THE ABOVE ARE ANSWERED YES, ATTACH FULL DETAILS.)
It is agreed that with respect to Question 9 and 10 above, that if such
knowledge, information or involvement exists, any claim or action arising
therefrom is excluded from the proposed coverage.
11. PREVIOUS DIRECTORS AND OFFICERS INSURANCE N/A
(a) Name of insurance company
(b) Limit of liability
(c) Self-insured retention
(d) Policy expiration date
(e) Premium (indicate one year or other)
(f) Loss experience (Attach full details. If no losses,
check here: )
12. Has any insurance carrier refused, canceled or nonrenewed coverage?
Yes No X (If yes, attach full details including when and
reason).
13. Name of Risk Manager (or equivalent position) and number of years in
current position:
H. L. Maxson
14. Schedule of underlying insurance:
List the underlying directors and officers liability insurance which
will, or is being proposed to, be carried by the Company for the
policy period being applied for:
a) PRIMARY INSURANCE
Limit of
Name of Insurer Liability Retention Premium
--------------- --------- --------- -------
CODA $25 Million / / $350,000
b) EXCESS INSURANCE (BY LAYER)
Limit of
Name of Insurer Liability Premium
--------------- --------- -------
X. L. $25MM xs $25MM $150,000
ACE $45MM xs $50MM $140,000
15. ATTACH COPIES OF THE FOLLOWING FOR THE APPLICANT AND, TO THE EXTENT
AVAILABLE, EACH OF ITS SUBSIDIARIES:
(a) Latest annual report
(b) Latest 10K report filed with the SEC (if the Company is publicly
traded)
(c) Latest interim financial statement available
(d) All proxy statements and Notices of Annual Meeting of
Stockholders within the last twelve months
(e) All registration statements file with the SEC within the last
twelve months (if the Company is Publicly traded)
(f) Copy (certified by Corporate Secretary) of the indemnification
provisions of the charter and the by-laws. Also attach a copy of
any corporate indemnification agreement
(g) Copies of all underlying insurance referred to in question 14
It is agreed that the Applicant will file with the Insurer, as soon as it
becomes available, a copy of each registration statement and annual or
interim report which the Applicant or any Subsidiary may from time to time
file with the Securities and Exchange Commission.
--------------------------------------------------------------------------
THE UNDERSIGNED AUTHORIZED OFFICER OF THE APPLICANT DECLARES THAT THE
STATEMENTS SET FORTH HEREIN ARE TRUE. THE UNDERSIGNED AUTHORIZED OFFICER
AGREES THAT IF THE INFORMATION SUPPLIED ON THIS APPLICATION CHANGES BETWEEN
THE DATE OF THIS APPLICATION AND THE EFFECTIVE DATE OF THE INSURANCE,
HE/SHE (UNDERSIGNED) WILL, IN ORDER FOR THE INFORMATION TO BE ACCURATE ON
THE EFFECTIVE DATE OF THE INSURANCE, IMMEDIATELY NOTIFY THE INSURER OF SUCH
CHANGES, AND THE INSURER MAY WITHDRAW OR MODIFY ANY OUTSTANDING QUOTATIONS
AND/OR AUTHORIZATIONS OR AGREEMENTS TO BIND THE INSURANCE.
SIGNING OF THIS APPLICATION DOES NOT BIND THE APPLICANT OR THE INSURER TO
COMPLETE THE INSURANCE, BUT IT IS AGREED THAT THIS APPLICATION SHALL BE THE
BASIS OF HE CONTRACT SHOULD A POLICY BE ISSUED, AND IT WILL BE ATTACHED TO
AND BECOME PART OF THE POLICY.
ALL WRITTEN STATEMENTS AND MATERIALS FURNISHED TO THE INSURER IN
CONJUNCTION WITH THIS APPLICATION ARE HEREBY INCORPORATED BY REFERENCE INTO
THIS APPLICATION AND MADE A PART HEREOF.
NOTICE TO NEW YORK AND OHIO APPLICANTS: ANY PERSON WHO KNOWINGLY AND WITH
INTENT TO DEFRAUD ANY INSURANCE COMPANY OR OTHER PERSON FILES AN
APPLICATION FOR INSURANCE OR STATEMENT OF CLAIM CONTAINING ANY MATERIALLY
FALSE INFORMATION, OR CONCEALS FOR THE PURPOSE OF MISLEADING, INFORMATION
CONCERNING ANY FACT MATERIAL THERETO, COMMITS A FRAUDULENT INSURANCE ACT,
WHICH IS A CRIME.
Signed /s/ EDWIN L. ARTZT
(Applicant)
Date October 3, 1994
Title: Chairman of the Board Corporation: The Procter & Gamble Company
(must be signed by Chairman (Corporate Seal)
of the Board or President)
Attest
Broker
Address
Please read the following statement carefully and sign on the next page
where indicated. If a policy is issued, this signed statement will be
attached to the policy.
The undersigned authorized officer of the Applicant hereby acknowledges
that he/she is aware that the limit of liability contained in this policy
shall be reduced, and may be completely exhausted, by the costs of legal
defense and, in such event, the Insurer shall not be liable for the costs
of legal defense or for the amount of any judgment or settlement to the
extent that such exceeds the limit of liability of this policy.
The undersigned authorized officer of the Applicant hereby further
acknowledges that he/she is aware that legal defense costs that are
incurred shall be applied against the retention amount.
Signed /s/ EDWIN L. ARTZT
(Applicant)
Date October 3, 1994
Title Chairman of the Board
(must be signed by Chairman
of the Board or President)
Exhibit (99.5)
--------------
Directors and Officers (Fourth Excess Liability Policy
PARK INTERNATIONAL LIMITED
A.C.E. INSURANCE COMPANY, LTD.
DIRECTORS AND OFFICERS LIABILITY INSURANCE POLICY
THIS IS A CLAIMS MADE POLICY. Except as otherwise provided herein, this
policy covers only claims first made against the Insureds during the Policy
Period. PLEASE READ THIS POLICY CAREFULLY.
DECLARATIONS
____________
Policy No.: PG-7574D
Item 1. Insured Company: THE PROCTER & GAMBLE COMPANY/
OFFICERS OF OPERATING UNITS OF
PROCTER & GAMBLE COMPANY
Principal Address: One Procter & Gamble Plaza
Cincinnati, Ohio 45202
U.S.A.
Item 2. Schedule of Underlying Policies:
Insurer Policy Limits Policy
Number Period
_______ ______ ______ ______
Primary Policy CODA PG-106C $25M 6/30/94-97
Excess Policies X.L. XLD&O-00364-94 $25M 6/30/94-95
A.C.E. PG-7331D $45M 6/30/94-95
STARR 700029 $50M 6/30/94-95
Uninsured retention under primary insurance: $NIL each Insured Person
each Loss, but in no event exceeding $NIL in the aggregate each Loss
for all Insured Persons and $ N/A each Loss for the Insured Company.
Item 3. Followed Policy: Insurer: CODA
Policy No.: PG-106C
Item 4. Policy Period: From 12:01 A.M. JUNE 30, 1994
To 12:01 A.M. JUNE 30, 1995
Standard Time at the address of the
Insured.
Item 5. Aggregate Limit of Liability $5,000,000 U.S. dollars each
Policy Year for all Loss paid on behalf of all Insureds
arising from all claims first made during such Policy Year.
Item 6. One Year Premium: $ Included under Policy PG-7331D
Three Year Premium: $ N/A
(Prepaid)
Discovery Period Premium: 100% of the Policy Period Premium
Item 7. Insurer: A.C.E. Insurance Company, Ltd.
P.O. Box HM 1015
Hamilton, Bermuda HM DX
Telex: 3543 ACEILBA
Telecopy: (809) 295-5221
Countersigned at Hamilton, Bermuda:
Date: January 23, 1995 /s/PATRICK D. TANNOCK
Authorized Representative
THESE DECLARATIONS, TOGETHER WITH THE COMPLETED AND SIGNED APPLICATION AND
THE POLICY FORM ATTACHED HERETO, CONSTITUTE THE INSURANCE POLICY.
I. INSURING CLAUSE
In consideration of the payment of the premium and in reliance upon
all statements made in the application form including the information
furnished in connection therewith, and subject to all terms, conditions,
exclusions and limitations of this policy, the Insurer agrees to provide
insurance coverage to the Insured Persons and, if applicable, the Insured
Company in accordance with the terms, conditions, exclusions and
limitations of the Followed Policy.
II. LIMIT OF LIABILITY
A. It is expressly agreed that liability for any covered Loss with
respect to claims first made in each Policy Year shall attach to
the Insurer only after the insurers of the Underlying Policies,
the Insured Company and/or the Insured Persons shall have paid,
admitted or been held liable to pay the full amount of the
Underlying Limit for such Policy Year. The Insurer shall then be
liable to pay only covered Loss in excess of such Underlying
Limit up to its Aggregate Limit of Liability as set forth in Item
5 of the Declarations, which shall be the maximum aggregate
liability of the Insurer under this policy with respect to all
claims first made in each Policy Year against all Insured Persons
irrespective of the time of payment by the Insurer.
B. Multiple claims based upon or arising out of the same, repeated,
interrelated or causally connected Wrongful Acts, whether made
against the same or different Insured Persons, shall be deemed to
be a single claim first made in the earliest Policy Year in which
the first of such multiple claims is made against any Insured
Person; the Aggregate Limit of Liability shall apply only once to
such multiple claims.
C. In the event and only in the event of the reduction or exhaustion
of the Underlying Limit by reason of the insurers of the
Underlying Policies, the Insured Company and/or the Insured
Persons paying, admitting or being held liable to pay Loss
otherwise covered hereunder, this policy shall: (i) in the event
of reduction, pay excess of the reduced Underlying Limit, and
(ii) in the event of exhaustion, continue in force as primary
insurance; provided always that in the latter event this policy
shall only pay excess of the retention applicable to the primary
insurance as set forth in Item 2 of the Declarations, which
retention shall be applied to any subsequent Loss in the same
manner as specified in such primary insurance.
D. Notwithstanding any of the terms of this policy which might be
construed otherwise, this policy shall drop down only in the
event of reduction or exhaustion of the Underlying Limit and
shall not drop down for any other reason including, but not
limited to, uncollectability (in whole or in part) of any
underlying insurance. The risk of uncollectability of such
underlying insurance (in whole or in part) whether because of
financial impairment or insolvency of an underlying insurer or
for any other reason, is expressly retained by the Insured
Persons and the Insured Company and is not in any way or under
any circumstances insured or assumed by the Insurer.
III. UNDERLYING INSURANCE
A. This policy is subject to the same warranties, terms, conditions,
exclusions and limitations (except as regards the premium, the
amount and limits of liability, the policy period and except as
otherwise provided herein) as are contained in or as may be added
to the Followed Policy.
B. It is a condition of this policy that the Underlying Policies
shall be maintained in full effect with solvent insurers during
the policy period listed in Item 2 of the Declarations except for
any reduction or exhaustion of the aggregate limits contained
therein by reason of Loss paid thereunder (as provided for in
Section II(C) above). Unless the Insurer otherwise agrees in
writing, this policy shall: (i) immediately and automatically
terminate on the date any of the Underlying Policies ceases to be
in full effect; and (ii) automatically terminate 30 days
following the date an insurer of any Underlying Policy becomes
subject to a receivership, liquidation, dissolution,
rehabilitation or any similar proceeding or is taken over by any
regulatory authority unless the Insured Company obtains
replacement coverage for such Underlying Policy within such 30
day period. In the event this policy automatically terminates
pursuant to this Section III(B), the Insurer shall retain the pro-
rata proportion of the premium. Payment or tender of any
unearned premium by the Insurer shall not be a condition
precedent to the effectiveness of such termination, but such
payment shall be made as soon as practicable.
C. If during the Policy Period or any discovery period the terms,
conditions, exclusions or limitations of the Followed Policy are
changed in any manner, the Insured Company or the Insured Persons
shall as a condition precedent to their rights under this policy
give to the Insurer as soon as practicable written notice of the
full particulars thereof. This policy shall become subject to
any such changes upon the effective date of the changes in the
Followed Policy, provided that the Insured Company shall pay any
additional premium reasonably required by the Insurer for such
changes.
IV. GENERAL CONDITIONS
A. Discovery Period: If the Insurer or the Insured Company fails or
refuses to renew or cancels this policy, or if this policy
automatically terminates pursuant to Section III(B), the Insured
Company or the Insured Persons shall have the right, upon payment
of an additional premium as set forth in Item 6 of the
Declarations, to elect an extension of the coverage granted by
this policy, but only for any Wrongful Act committed, attempted
or allegedly committed or attempted prior to the effective date
of such nonrenewal, cancellation or termination. Any such
election shall be made in writing in the time and manner and for
the discovery period stated in the Followed Policy.
B. Application of Recoveries: All recoveries or payments recovered
or received subsequent to a Loss settlement under this policy
shall be applied as if recovered or received prior to such
settlement and all necessary adjustments shall then be made
between the Insured Company or the Insured Person and the
Insurer, provided always that the foregoing shall not affect the
time when Loss under this policy shall be payable.
C. Notice: All notices to the Insurer under any provisions of this
policy shall be given by prepaid courier or electronic service
properly addressed to the Insurer at its address as shown in the
Declarations. Notice so given shall be deemed to be received by
the Insurer on the next succeeding day.
D. Cooperation: The Insured Company and the Insured Persons shall
give the Insurer such information and cooperation as it may
reasonably require.
E. Premium: The premium under this policy is a flat premium and is
not subject to adjustment except as otherwise provided herein.
The premium shall be paid to the Insurer at its address as shown
in the Declarations.
F. Cancellation Clause: This policy may be cancelled by the Insured
Company at any time by written notice or surrender of this policy
to the Insurer. This policy may also be cancelled by, or on
behalf of, the Insurer by delivering to the Insured Company or by
mailing to the Insured Company by registered, certified or other
first class mail, at the address shown in the Declarations,
written notice stating when, not less than (365) days thereafter,
the cancellation shall become effective. The mailing of such
notice as aforesaid shall be sufficient proof of notice, and this
policy shall terminate at the date and hour specified in such
notice. If this policy shall be cancelled by the Insured
Company, the Insurer shall retain the customary short rate
proportion of premium hereon. If this policy shall be cancelled
by or on behalf of the Insurer, the Insurer shall retain the pro-
rata proportion of the premium hereon. Payment or tender of any
unearned premium by the Insurer shall not be a condition
precedent to the effectiveness of cancellation, but such payment
shall be made as soon as practicable.
G. Capacity: Notwithstanding any other provision of this policy,
coverage hereunder shall not apply with respect to a Wrongful Act
by any Insured Person in his capacity as director or officer of
the Insurer.
H. Changes: Notice to or knowledge possessed by any person shall
not effect waiver or change in any part of this policy or estop
the Insurer from asserting any right under the terms of this
policy; nor shall the terms of this policy be waived or changed,
except by endorsement issued to form a part hereof, signed by the
Insurer or its authorized representative.
I. Arbitration: Any dispute arising under or relating to this
policy, or the breach thereof, shall be finally and fully
determined in Hamilton, Bermuda under the provisions of the
Bermuda Arbitration Act of 1986, as amended and supplemented, by
an Arbitration Board composed of three arbitrators who shall be
disinterested and active or retired business executives having
knowledge relevant to the matters in dispute, and who shall be
selected for each controversy as follows:
Either party to the dispute, once a claim or demand on its part
has been denied or remains unsatisfied for a period of twenty
(20) calendar days by the other party, may notify the other party
of its desire to arbitrate the matter in dispute and at the time
of such notification the party desiring arbitration shall notify
the other party of the name of the arbitrator selected by it.
The other party who has been so notified shall within ten (10)
calendar days thereafter select an arbitrator and notify the
party desiring arbitration of the name of such second arbitrator.
If the party notified of a desire for arbitration shall fail or
refuse to nominate the second arbitrator within ten (10) calendar
days following the receipt of such notification, the party who
first served notice of a desire to arbitrate will, within an
additional period of ten (10) calendar days, apply to the Supreme
Court of Bermuda for the appointment of a second arbitrator and
in such a case the arbitrator appointed by the Supreme Court of
Bermuda shall be deemed to have been nominated by the party who
failed to select the second arbitrator. The two arbitrators,
chosen as above provided, shall within ten (10) calendar days
after the appointment of the second arbitrator choose a third
arbitrator. In the event of the failure of the first two
arbitrators to agree on a third arbitrator within the said ten
(10) calendar day period, either party may within a period of ten
(10) calendar days thereafter, after notice to the other party,
apply to the Supreme Court of Bermuda for the appointment of a
third arbitrator and in such case the person so appointed shall
be deemed and shall act as the third arbitrator. Upon acceptance
of the appointment by said third arbitrator, the Arbitration
Board for the controversy in question shall be deemed fixed.
The Arbitration Board shall fix, by a notice in writing to the
parties involved, a reasonable time and place for the hearing and
may in said written notice or at the time of the commencement of
said hearing, at the option of said Arbitration Board, prescribe
reasonable rules and regulations governing the course and conduct
of said hearing.
The Board, shall, within ninety (90) calendar days following the
conclusion of the hearing, render its decision on the matter or
matters in controversy in writing and shall cause a copy thereof
to be served on all parties thereto. In case the Board fails to
reach a unanimous decision, the decision of the majority of the
members of the Board shall be deemed to be the decision of the
Board.
Each party shall bear the expense of its own arbitrator. The
remaining cost of the arbitration shall be borne equally by the
parties to such arbitration.
All awards made by the Arbitration Board shall be final and no
right of appeal shall lie from any award rendered by the
Arbitration Board. The parties agree that the Supreme Court of
Bermuda: (i) shall not grant leave to appeal any award based upon
a question of law arising out of the award; (ii) shall not grant
leave to make an application with respect to an award; and (iii)
shall not assume jurisdiction upon any application by a party to
determine any issue of law arising in the course of the
arbitration proceeding, including but not limited to whether a
party has been guilty of fraud.
All awards made by the Arbitration Board may be enforced in the
same manner as a judgment or order from the Supreme Court of
Bermuda and judgment may be entered pursuant to the terms of the
award by leave from the Supreme Court of Bermuda.
The Insurer and the Insureds agree that in the event that claims
for indemnity or contribution are asserted in any action or
proceeding against the Insurer by any of the Insureds' other
insurers in any jurisdiction or forum other than that set forth
in this clause, the Insureds will in good faith take all
reasonable steps requested by the Insurer to assist the Insurer
in obtaining a dismissal of these claims (other than on the
merits) and will, without limitation, undertake to the court or
other tribunal to reduce any judgment or award against such other
insurers to the extent that the court or tribunal determines that
the Insurer would have been liable to such insurers for indemnity
or contribution pursuant to this policy. The Insureds shall be
entitled to assert claims against the Insurer for coverage under
this policy, including, without limitation, for amounts by which
the Insureds reduced its judgment against such other insurers in
respect of such claims for indemnity or contribution, in an
arbitration between the Insurer and the Insureds pursuant to this
clause; provided, however, that the Insurer in such arbitration
in respect of such reduction of any judgment shall be entitled to
raise any defenses under this policy and any other defenses
(other than jurisdictional defenses) as it would have been
entitled to raise in the action or proceeding with such insurers.
J. Governing Law and Interpretation: This policy shall be construed
and enforced in accordance with the internal laws of the State of
New York (with the exception of Section IV(I), which shall be
construed and enforced in accordance with the laws of Bermuda),
except insofar as such laws may prohibit payment hereunder in
respect of punitive damages; provided, however, that the terms,
conditions, exclusions and limitations of this policy are to be
construed in an evenhanded fashion as between the Insureds and
the Insurer. Without limitation, where the language of this
policy is deemed to be ambiguous or otherwise unclear, the issues
shall be resolved in the manner most consistent with the relevant
terms, conditions, exclusions and limitations (without regard to
authorship of the language, without any presumption or arbitrary
interpretation or construction in favour of either the Insureds
or the Insurer and without reference to parol evidence).
K. Liability of the Company: The Insured Company, the Insured
Persons and the Insurer agree that the liability and obligations
of the Insurer hereunder shall be satisfied from the funds of the
Insurer alone and that the individual shareholders of the Insurer
shall have no liability hereunder to the Insured Company or the
Insured Persons.
L. Headings: The descriptions in the headings and sub-headings of
this policy are inserted solely for convenience and do not
constitute any part of the terms or conditions hereof.
M. Currency: The premiums and any Loss under this policy are
payable in United States currency.
N. Assignment: Assignment of interest under this policy shall not
bind the Insurer unless and until its consent is endorsed hereon.
V. DEFINITIONS
A. The terms "Wrongful Act" and "Loss" shall have the same meanings
in this policy as are attributed to them in the Followed Policy.
The terms "Insurer", "Followed Policy", "Underlying Policies",
"Policy Period" and "Aggregate Limit of Liability" shall have the
meanings attributed to them in the Declarations.
B. The term "Insured Persons" shall mean those directors, officers
and other individuals insured by the Followed Policy.
C. The term "Insured Company" shall mean the entity named in Item 1
of the Declarations and any subsidiaries or affiliates thereof
insured by the Followed Policy.
D. The term "Policy Year" shall mean the period of one year
following the inception of this policy or any anniversary, or, if
the time between inception or any anniversary and the termination
of this policy is less than one year, the lesser period. If the
discovery period hereunder is exercised as a result of the
cancellation of or refusal to renew this policy by the Insurer,
such period shall be considered a separate Policy Year. If the
discovery period is otherwise exercised, such period shall be
part of the last Policy Year and not an additional period.
E. The term "Underlying Limit" shall mean an amount equal to the
aggregate of all limits of liability as set forth in Item 2 of
the Declarations for all Underlying Policies, plus the uninsured
retention, if any, applicable to the primary insurance as set
forth in Item 2 of the Declarations.
IN WITNESS WHEREOF, this policy has been made, entered into and
executed by the Insurer in Hamilton, Bermuda as of the date set forth in
the Declarations.
A.C.E. INSURANCE COMPANY, LTD.
By: /s/K. P. WHITE /s/W. A. SCOTT
Senior Vice President President
ADDITIONAL/RETURN PREMIUM: NIL
CANCELLATION ENDORSEMENT
------------------------
(1 YEAR POLICY)
It is agreed and acknowledged that Section IV(F) of this policy is deleted
in its entirety.
It is further agreed and acknowledged that this policy shall not be subject
to Clause 7 (Automatic Extension) of the Followed Policy.
The effective date of this endorsement is June 30, 1994
All other terms and conditions remain unchanged.
This endorsement is attached to and made a part of Policy No. PG-7574D of
A.C.E. INSURANCE COMPANY, LTD.
Issued to: THE PROCTER & GAMBLE COMPANY/OFFICERS OF OPERATING UNITS OF
PROCTER & GAMBLE COMPANY
Date of Issue: January 23, 1995
By /s/PATRICK D. TANNOCK
AUTHORISED REPRESENTATIVE
End No. 1
ADDITIONAL/RETURN PREMIUM NIL
DISCOVERY PERIOD ENDORSEMENT
It is agreed and acknowledged that Section IV(A) (Discovery Period) is
deleted and replaced in its entirety by the following:
IV(A)(1) If the INSURER or the Insured Company cancels or elects not to
renew this POLICY, then the INSURED persons or INSURED Company
shall have the right, upon payment of an additional premium of
100% of the sum of all premiums otherwise paid or due for the
POLICY YEAR in which such election is made, to a continuation of
the reporting period of this POLICY in respect of any CLAIMS
first made against the INSURED persons or INSURED Company or any
of them during a period (hereinafter referred to as the
"Discovery Period") after the end of the POLICY PERIOD, but only
if the CLAIMS are based on WRONGFUL ACTS alleged to have been
committed prior to the end of the POLICY PERIOD. Such CLAIMS
shall be deemed to have been made during the last POLICY YEAR
provided that notification of each CLAIM is in accordance with
Clause IV C below. The right to elect the Discovery Period shall
terminate, however, unless written notice of such election
together with the additional premium is received by the INSURER
within ten (10) days after the end of the POLICY PERIOD. Any
premium paid for the Discovery Period is not refundable.
(2) The length of the Discovery Period shall be the same amount of
time as the length of the POLICY PERIOD, subject to a maximum
Discovery Period of one year.
(3) The offer by the INSURER of renewal at a premium different from
the premiums for the expiring POLICY YEAR shall not constitute an
election by the INSURER not to renew this POLICY.
(4) The Discovery Period does not reinstate or increase the LIMIT OF
LIABILITY of this POLICY.
The effective date of this endorsement is June 30, 1994.
All other terms and conditions remain unchanged.
This endorsement is attached to and made a part of Policy No. PG-7574D
of A.C.E. INSURANCE COMPANY, LTD.
Issued to: THE PROCTER & GAMBLE COMPANY/OFFICERS OF OPERATING UNITS OF
PROCTER & GAMBLE COMPANY
Date of Issue: January 23, 1995
End. No. 2 By /s/PATRICK D. TANNOCK
Authorized Representative
ADDITIONAL/RETURN PREMIUM: NIL
CLAUSE III B AMENDATORY ENDORSEMENT
-----------------------------------
In consideration of the premium charged it is hereby understood and agreed
that Clause IIIB (i) and (ii) is amended to read as follows:
B. It is a condition of this policy that the Followed Policies shall be
maintained in full effect with solvent insurers during the policy
period listed in Item 2 of the Declarations except for any reduction
or exhaustion of the aggregate limits contained therein by reason of
Loss paid thereunder (as provided for in Section II (C) above).
Unless the Insurer otherwise agrees in writing, this policy shall:
(i) immediately and automatically terminate on the date any of the
Followed Policies ceases to be in full effect; and (ii) automatically
terminate 30 days following the date an insurer of any Followed Policy
becomes subject to a receivership, liquidation, dissolution,
rehabilitation or any similar proceeding or is taken over by any
regulatory authority unless the Insured Company obtains replacement
coverage for such Followed Policy within such 30 day period. In the
event this policy automatically terminates pursuant to this Section
III(B), the Insurer shall retain the pro-rata proportion of the
premium. Payment or tender of any unearned premium by the Insurer
shall not be a condition precedent to the effectiveness of such
termination, but such payment shall be made as soon as practicable.
The effective date of this endorsement is June 30, 1994
All other terms and conditions remain unchanged.
This endorsement is attached to and made a part of Policy No. PG-7574D
of A.C.E. INSURANCE COMPANY, LTD.
Issued to: THE PROCTER & GAMBLE COMPANY/OFFICERS OF OPERATING UNITS OF
PROCTER & GAMBLE COMPANY
Date of Issue: January 23, 1995
End No. 3 By /s/PATRICK D. TANNOCK
AUTHORISED REPRESENTATIVE
ADDITIONAL/RETURN PREMIUM $ NIL
IT IS UNDERSTOOD AND AGREED THAT SECTION II - A & C IS REPLACED BY THE
FOLLOWING:
A. IT IS EXPRESSLY AGREED THAT LIABILITY FOR ANY COVERED LOSS WITH
RESPECT TO CLAIMS FIRST MADE IN EACH POLICY YEAR SHALL ATTACH TO
THE INSURER ONLY AFTER THE INSURERS OF THE UNDERLYING POLICIES,
THE INSURED COMPANY AND/OR THE INSURED PERSONS SHALL HAVE PAID,
IN THE APPLICABLE LEGAL CURRENCY, THE FULL AMOUNT OF THE
UNDERLYING LIMITS FOR SUCH POLICY YEAR. THE INSURER SHALL THEN
BE LIABLE TO PAY ONLY COVERED LOSS IN EXCESS OF SUCH UNDERLYING
LIMIT UP TO ITS AGGREGATE LIMIT OF LIABILITY AS SET FORTH IN ITEM
5 OF THE DECLARATIONS, WHICH SHALL BE THE MAXIMUM AGGREGATE
LIABILITY OF THE INSURER UNDER THIS POLICY WITH RESPECT TO ALL
CLAIMS FIRST MADE IN EACH POLICY YEAR AGAINST ALL INSURED PERSONS
IRRESPECTIVE OF THE TIME OF PAYMENT BY THE INSURER.
C. IN THE EVENT AND ONLY IN THE EVENT OF THE REDUCTION OR EXHAUSTION
OF THE UNDERLYING LIMITS BY REASON OF THE INSURERS OF THE
UNDERLYING POLICY, THE INSURED COMPANY AND/OR THE INSURED PERSONS
PAYING, IN THE APPLICABLE LEGAL CURRENCY, LOSS OTHERWISE COVERED
HEREUNDER, THIS POLICY SHALL: (i) IN THE EVENT OF REDUCTION, PAY
EXCESS OF THE REDUCED UNDERLYING LIMIT, AND (ii) IN THE EVENT OF
EXHAUSTION, CONTINUE IN FORCE AS PRIMARY INSURANCE; PROVIDED
ALWAYS THAT IN THE LATTER EVENT THIS POLICY SHALL ONLY PAY EXCESS
OF THE RETENTION APPLICABLE TO THE PRIMARY INSURANCE AS SET FORTH
IN ITEM 2 OF THE DECLARATIONS, WHICH RETENTION SHALL BE APPLIED
TO ANY SUBSEQUENT LOSS IN THE SAME MANNER AS SPECIFIED IN SUCH
PRIMARY INSURANCE.
NOTHING HEREIN CONTAINED SHALL BE HELD TO VARY, ALTER, WAIVE OR EXTEND ANY
OF THE TERMS, CONDITIONS, EXCLUSIONS OR LIMITATIONS OF THE ABOVE-MENTIONED
POLICY, EXCEPT AS EXPRESSLY STATED HEREIN.
The effective date of this endorsement is June 30, 1994
All other terms and conditions remain unchanged.
This endorsement is attached to and made a part of Policy No. PG-7574D
of A.C.E. INSURANCE COMPANY, LTD.
Issued to: THE PROCTER & GAMBLE COMPANY/OFFICERS OF OPERATING UNITS OF
PROCTER & GAMBLE COMPANY
Date of Issue: JANUARY 23, 1995
End No. 4 By /s/PATRICK D. TANNOCK
AUTHORISED REPRESENTATIVE
ADDITIONAL/RETURN PREMIUM: NIL
DIRECTORS AND OFFICERS LIABILITY ENDORSEMENT
--------------------------------------------
In consideration of the premium charged it is hereby agreed and
acknowledged that coverage afforded by this Policy is only in respect of
Directors and Officers Liability and not Company Reimbursement.
The effective date of this endorsement is June 30, 1994
All other terms and conditions remain unchanged.
This endorsement is attached to and made a part of Policy No. PG-7574D
of A.C.E. INSURANCE COMPANY, LTD.
Issued to: THE PROCTER & GAMBLE COMPANY/OFFICERS OF OPERATING UNITS OF
PROCTER & GAMBLE COMPANY
Date of Issue: JANUARY 23, 1995
End No. 5 By /s/PATRICK D. TANNOCK
AUTHORISED REPRESENTATIVE
Exhibit (99.6)
--------------
Fiduciary Responsibility Insurance Policy
PENSION AND WELFARE FUND
FIDUCIARY RESPONSIBILITY INSURANCE POLICY
To be attached to and form part of: THE PROCTER & GAMBLE COMPANY
Policy No: 68 FF 100827733 BCA
Issued to: THE PROCTER & GAMBLE COMPANY
It is agreed that:
1. Section IV OTHER DEFINITIONS (3)(a) is amended by adding the
following, "except for civil penalties resulting from Section 502(l)
of the Employee Retirement Income Security Act of 1974."
2. This extension of coverage shall be a part of and not in addition to
the "Annual Aggregate Limit of Liability" available for settlement or
adjudication of such claim. Payment under this endorsement is limited
to 20% of the settlement or adjudicated amount and shall not, in the
aggregate, exceed 20% of the "Annual Aggregate Limit of Liability."
3. Nothing contained herein shall vary, alter, or extend any of the
terms, conditions, and limitations of the Policy except as stated
above.
This endorsement forms a part of the policy to which attached, effective on
the inception date of the policy unless otherwise stated herein.
Endorsement No.
Policy No.
---------------------------------------------------------------------------
Complete Only When This Endorsement Is Not Prepared With The Policy Or Is
Not To Be Effective With The Policy.
Issued to (Designated Trust or Plan)
Effective Date of This endorsement
AETNA CASUALTY AND SURETY COMPANY
By /s/ROBERT D. LANG
Authorized Representative
---------------------------------------------------------------------------
SECTION 502(l) ENDORSEMENT
For use with Aetna C & S Fiduciary
Responsibility Insurance Policy.
RENEWAL CERTIFICATE XX The Aetna Casualty and Surety Company
FIDUCIARY RESPONSIBILITY Hartford, Connecticut 06156
INSURANCE POLICY F-1191
The Standard Fire Insurance Company
Hartford, Connecticut 06156
DESIGNATED TRUST OR PLAN POLICY NUMBER
THE PROCTER & GAMBLE COMPANY PROFIT 68 FF 100827733 BCA
SHARING TRUST; etal POLICY PERIOD
FROM JUNE 30, 1994 TO JUNE 30, 1995
RENEWAL PREMIUM
$139,100.00
--------------
PREMIUM PAYABLE
CURRENT EACH ANNIVERSARY
$139,100.00 $N/A
In consideration of the stated renewal premium, the policy is renewed for
the Policy Period indicated.
The premium for this policy has been paid by the Designated Trust or
Plan. The Company has the right of recourse pursuant to Condition (10).
Endorsement (F-1280) is attached to eliminate recourse.
Premium for elimination of recourse: $N/A (included in stated renewal
premium)
Payable In Advance Each Installment
Endorsements made a part of this policy at renewal (Designated by
Endorsement Number)
/s/RONALD E. COMPTON
Chairman and President Countersigned by: /s/ROBERT D. LANG
RENEWAL CERTIFICATE XX The Aetna Casualty and Surety Company
FIDUCIARY RESPONSIBILITY Hartford, Connecticut 06156
INSURANCE POLICY F-1191
The Standard Fire Insurance Company
Hartford, Connecticut 06156
DESIGNATED TRUST OR PLAN POLICY NUMBER
THE PROCTER & GAMBLE COMPANY PROFIT 068 FF 100827733 BCA
SHARING TRUST; etal POLICY PERIOD
FROM 6/30/95 TO 6/30/96
RENEWAL PREMIUM
$145,000.00
--------------
PREMIUM PAYABLE
CURRENT EACH ANNIVERSARY
$145,000.00 $N/A
In consideration of the stated renewal premium, the policy is renewed for
the Policy Period indicated.
The premium for this policy has been paid by the Designated Trust or
Plan. The Company has the right of recourse pursuant to Condition (10).
Endorsement (F-1280) is attached to eliminate recourse.
Premium for elimination of recourse: $N/A (included in stated renewal
premium)
Payable In Advance Each Installment
Endorsements made a part of this policy at renewal (Designated by
Endorsement Number)
F-1197
/s/RONALD E. COMPTON
Chairman and President Countersigned by: /s/ROBERT D. LANG
It is agreed that as of the effective date hereof the policy is amended or
cancelled as indicated by X.
X CHANGE ENDORSEMENT
(Do not use this form to change Policy Effective/Expiry Dates or Policy
Number.)
1. Name of Designated Trust or Plan form to
2. Mailing Address
3. X Insurance Representative - Name is hereby change to: H. L. Maxson
4. Add designated Trust or Plan
5. Add Designated Fiduciary
Delete Designated Fiduciary
6. Other
MIDTERM CANCELLATION NOTICE
7. Cancellation by Insured, effective
8. You are hereby notified that this Company elects to cancel this
policy, effective , in accordance with the terms of said
policy.
This endorsement, issued by one of the below named companies, forms a part
of the policy to which attached.
Endorsement effective 6/30/95 Premium for elimination Document Premium
of recourse
(if applicable)
Designated Trust or Plan
The Procter & Gamble Company In Adv. $ In Adv. $
Profit Sharing Trust, et al 1st Anniv. $ 1st Anniv. $
2nd Anniv. $ 2nd Anniv. $
Total Document Premium $
Policy No. 068 FF 100827733 BCA Additional Premium Return Premium
Endorsement No.
THE AETNA CASUALTY AND SURETY COMPANY Countersigned by /s/ROBERT D. LANG
THE STANDARD FIRE INSURANCE COMPANY (Authorized Representative)
Hartford, Connecticut 06156
Pension and Welfare Fund
Fiduciary Responsibility Insurance Declarations
1. Designated Trust or Plan Policy Number
The Procter & Gamble Company 68 FF 100827733 BCA
Profit Sharing Trust; etal
2. Mailing Address
One Procter & Gamble Plaza, Cincinnati, Ohio 45202
3. Policy Period
From 6/30/93 to 6/30/94 12:01 a.m.
Standard Time at the Mailing Address Stated in Item 2.
4. Annual Aggregate Limit of Liability
Aetna Casualty and Surety Company $20,000,000 part of $30,000,000
Celtic Insurance Company $10,000,000 part of $30,000,000
5. Insurance Representative 6. Premium for the
Policy Period
$139,100
Gerald L. Leighton Premium Payable to
The Aetna Casualty and Surety Company
7. Endorsements made a part of the policy (Designated by Endorsement
Number)
F-1282, F-1274, F-1401, F-1400, Deductible Endorsement, Impairment of
Assets Endorsement, Pollution Exclusion Endorsement, Special
Endorsement #1
Countersigned by /s/ROBERT D. LANG
PENSION AND WELFARE FUND FIDUCIARY RESPONSIBILITY
INSURANCE POLICY
THIS IS A CLAIMS MADE POLICY
IN CONSIDERATION of the payment of the premium stated in the Declarations
and subject to all of the terms, conditions, and limitations of this
Policy, the Company agrees as follows:
I. INSURING AGREEMENT.
The Company will pay on behalf of the INSURED all sums which the
INSURED shall become legally obligated to pay as DAMAGES on account
of any claim made against the INSURED for any WRONGFUL ACT and the
Company shall have the right and duty to defend such claim against
the INSURED seeking such DAMAGES, even if any of the allegations of
the claim are groundless, false or fraudulent, and may make such
investigation and settlement of any claim as it deems expedient,
but the Company shall not be obligated to pay any claim or judgment
or to defend any suit after the applicable limit of the Company's
liability has been exhausted by payment of judgments or
settlements.
II. EXCLUSIONS.
This insurance does not apply to any claim:
(1) Arising out of any dishonest, fraudulent or criminal act, or
willful or reckless violation of any statute, but this exclusion
does not apply to a claim upon which suit may be brought by reason
of any alleged dishonesty on the part of the INSURED, unless:
(a) A judgment or other final adjudication thereof adverse to
the INSURED shall establish that acts of active deliberate
dishonesty committed by the INSURED was material to the cause
of action so adjudicated or
(b) The claim is a claim by or on behalf of a fidelity insurer
against a natural person whose dishonesty has resulted in a
loss which has been paid under a fidelity bond.
(2) Arising out of libel or slander;
(3) Arising out of bodily injury, sickness, disease or death, or
loss of, injury to, destruction of, or loss of use of, any tangible
property, including loss of currency, coins, bank notes, bullion,
travelers checks, register checks, money orders, and all negotiable
and non-negotiable instruments or contracts representing money;
(4) Arising out of the INSURED'S failure to comply with any law
concerning Workers' Compensation, Unemployment Insurance, Social
Security or Disability Benefits, or any similar law;
(5) Arising out of the failure to procure or maintain adequate
insurance or bonds on assets or property of the Trust or Employee
Benefit Plan designated in the Declarations;
(6) Arising out of liability of others assumed by the INSURED under
any contract or agreement, either oral or written, except in
accordance with the Agreement and Declaration of Trust;
(7) Arising out of the INSURED gaining in fact any personal profit
or advantage to which such INSURED was not legally entitled or for
the return by the INSURED of any remuneration paid in fact to such
INSURED if payment of such remuneration shall be held by the courts
to have been in violation of law;
(8) For the failure to collect contributions owed to the Trust or
Employee Benefit Plan described in the Declarations from employers
unless such failure is due to the negligence of the INSURED or for
the return of any contributions to an employer if such amounts are
or could be chargeable to the Trust or Employee Benefit Plan, but
this exclusion shall not apply to the Company's obligation to
defend such claim nor pay the costs and expenses thereof.
III. DEFINITION OF INSURED.
Each of the following is an INSURED to the extent set forth below:
(1) The Trust or Employee Benefit Plan designated in the
Declarations and any additional Trust or Employee Benefit Plan
created during the policy period by the sole sponsor referred to in
Item (2) below, or by any interest owned or controlled by said sole
sponsor, provided written notice of such is given to the Company
within 90 days.
(2) An employer who is the sole sponsor of such Trust or Employee
Benefit Plan.
(3) Any natural person who at any time holds or shall have held the
position of:
(a) Trustee of such Trust or Employee Benefit Plan.
(b) Director, officer or employee of such Trust or Employee
Benefit Plan or of such sole sponsor employer.
(4) Any other person or organization designated in the Declarations
as a Fiduciary.
(5) Any other Trust or Employee Benefit Plan of any firm hereafter
acquired through consolidation, merger or takeover by the sole
sponsor or by any interest owned or controlled by said sole
sponsor, provided:
(a) Written notice of such acquisition is given to the Company
within 90 days of the effective date of such acquisition, and
(b) The INSURED pays the Company an additional premium computed
pro-rata from the date of such acquisition to the end of the
Policy Period, and
(c) That specific Application on the Company's form in use at
the time of acquisition is made to the Company as soon as
practicable after the aforesaid notice is given.
The insurance applies separately to each INSURED against whom claim
is made or suit is brought except with respect to the application
of the limits of liability, and it shall also apply to the estates,
heirs and personal representatives of persons INSURED hereunder.
IV. OTHER DEFINITIONS.
(1) "WRONGFUL ACT" means a breach of fiduciary duty by the INSURED
in the discharge of duties as respects the Trust or Employee
Benefit Plan designated in the Declarations; the term includes any
negligent act, error or omission of the INSURED in the
"ADMINISTRATION" of "EMPLOYEE BENEFITS".
"ADMINISTRATION" as used herein shall mean:
(a) Giving counsel to employees with respect to EMPLOYEE
BENEFITS;
(b) Interpreting EMPLOYEE BENEFITS;
(c) Handling records in connection with EMPLOYEE BENEFITS;
(d) Effecting enrollment, termination or cancellation of
employees under an EMPLOYEE BENEFITS program.
"EMPLOYEE BENEFITS" as used herein shall mean the Trust or Employee
Benefit Plan designated in the Declarations, Workers' Compensation
Insurance, Unemployment Insurance, Social Security or Disability
Benefits.
(2) "INSURANCE REPRESENTATIVE" means the person designated in the
Declarations as the exclusive agent to act on behalf of the
INSUREDS, individually or collectively, in all matters relating to
insurance under this policy.
(3) "DAMAGES" shall mean sums of money payable as compensation for
loss or in discharge of an obligation of an INSURED to make good a
shortage in the INSURED Trust or Employee Benefit Plan. The word
"DAMAGES" shall not include:
(a) Fines, penalties, taxes or punitive or exemplary damage.
(b) Benefits due or to become due under the terms of the Trust
or Plan, unless and to the extent that recovery for such
benefits is based upon a WRONGFUL ACT and is payable as a
personal obligation of an INSURED.
V. POLICY PERIOD: TERRITORY.
This insurance applies only to claims first made during the policy
period described in the Declarations within the United States of
America, its territories or possessions or Canada; provided the
INSURED at the effective date of this insurance had no knowledge of
or could not have reasonably foreseen any circumstances which might
result in such claim.
VI. LIMITS OF LIABILITY.
Regardless of the number of persons or organizations bringing claims
or suits against the INSURED and regardless of the number of
persons or organizations INSURED hereunder, the total limit of the
Company's liability to pay DAMAGES because of all claims made
against the INSURED during any single policy year shall not exceed
the amount shown in the Declarations as "Annual Aggregate Limit of
Liability", regardless of time of payment.
If the policy period described in the Declarations is for a term of
more than one year, said "Annual Aggregate Limit of Liability"
shall apply separately to each consecutive annual period.
VII. CLAIMS MADE EXTENSION CLAUSE.
If, during the policy period hereof, the INSURED shall first become
aware of any WRONGFUL ACT which may subsequently give rise to a
claim against any INSURED and shall during the policy period hereof
give written notice to the Company of such WRONGFUL ACT, then any
such claim which is subsequently made against the INSURED arising
out of such WRONGFUL ACT shall for the purposes of this policy be
deemed to have been first made against the INSURED during the
policy period.
VIII. SUPPLEMENTARY PAYMENTS.
The Company will pay in addition to the limits of liability shown in
the Declarations all costs, charges and expenses incurred by the
Company in the investigation, settlement, defense and negotiation
of any claim coming within the terms of this insurance, but, in the
event of any judgment in excess of the amount of the aggregate
limit available under this policy, the Company's liability for the
costs and expenses incurred by it or with its consent shall be such
proportion thereof as the amount of the aggregate limit available
under this policy bears to the amount paid to dispose of the claim.
In no event shall the Company be obligated to pay any claim or
judgment or to defend or continue the defense of any suit after the
aggregate limit of the Company's liability has been exhausted by
payment of judgments or settlements.
The Company will pay in addition to the Limits of Liability shown in
the Declarations reasonable expenses incurred by the INSURED at the
Company's request.
IX. CONSENT TO SETTLE.
The Company may, with the written consent of the INSURED, make such
settlement or such compromise of any claim or suit as the Company
deems expedient, and if the INSURED shall refuse to consent to the
settlement of any claim or suit recommended by the Company, based
upon a judgment or a bonafide offer of settlement, the INSURED
shall thereafter negotiate or defend such claim or suit
independently of the Company and on said INSURED'S own behalf, and
in such event the DAMAGES and expenses accruing or determined
through litigation or otherwise in excess of the amount for which
settlement could have been made as so recommended by the Company
shall not be recoverable under this policy.
X. EXTENSION CLAUSE.
It is agreed that at any time prior to termination or cancellation
of this policy as an entirety, whether by the INSURED or by the
Company, the INSURED may give to the Company notice that it desires
to be INSURED for an additional period of twelve (12) months after
the effective date of termination or cancellation, at an additional
premium of 25% of the premium hereunder, for claims made against
the INSURED during the said twelve (12) month period by reason of a
WRONGFUL ACT committed or alleged to have been committed prior to
the effective date of termination or cancellation and which would
be otherwise INSURED by this policy, subject to the following
provisions:
(a) Such additional period shall be deemed part of the policy
period and not an addition thereto;
(b) Such additional period of time shall terminate forthwith on
the effective date of any other insurance obtained by the
INSURED or its successors in business, replacing in whole or
in part the insurance afforded by this policy. Where such
other policy provides no coverage for loss sustained prior to
its effective date, it shall not be deemed to be a replacement
of this policy.
If the policy period described in the Declarations is for
a term of more than one year, the maximum premium for this
extension shall be 25% of the equivalent annual premium.
XI. CONDITIONS.
(1) INSUREDS DUTIES IN THE EVENT OF OCCURRENCE, CLAIM OR SUIT.
It is a condition precedent to the application of all insurance
afforded herein that:
(a) In the event the INSURED shall first become aware of any
claim or allegation of a WRONGFUL ACT, or any occurrence which
might reasonably give rise to such claim or allegation of a
WRONGFUL ACT, written notice containing particulars sufficient
to identify the INSURED and any claimant and also reasonably
obtainable information with respect to the time, place and
circumstances thereof, and the names and addresses of the
injured parties and of available witnesses, shall be given by
or for the INSURED to the Company or any of its authorized
agents as soon as practicable;
(b) If claim is made or suit is brought against an INSURED, the
INSURED or INSURANCE REPRESENTATIVE shall immediately forward
to the Company every demand, notice, summons or other process
received;
(c) The INSURED shall cooperate with the Company and, upon the
Company's request, assist in making settlements, in the
conduct of suits and in enforcing any right of contribution or
indemnity against any person or organization who may be liable
to the INSURED because of an act with respect to which
insurance is afforded under this policy; and the INSURED shall
attend hearings and trials and assist in securing and giving
evidence and obtaining the attendance of witnesses. The
INSURED shall not voluntarily assume or admit any liability,
nor, except at said INSURED'S own cost, voluntarily make any
payment, assume any obligations or incur any expense without
the Company's prior written consent.
(2) ACTION AGAINST THE COMPANY.
No action shall lie against the Company unless, as a condition
precedent thereto, there shall have been full compliance with all
of the terms of this policy, nor until the amount of the INSURED'S
obligation to pay shall have been finally determined either by
judgment against the INSURED after actual trial or by written
agreement of the INSURED, the claimant and the Company.
Any person or organization or the legal representative thereof who
has secured such judgment or written agreement shall thereafter be
entitled to recover under this policy to the extent of the
insurance afforded by this policy. No person or organization shall
have any right under this policy to join the Company as a party to
any action against the INSURED to determine the INSURED'S liability
nor shall the Company be impleaded by the INSURED or said INSURED'S
legal representative. Bankruptcy or insolvency of the INSURED or
of the INSURED'S estate shall not relieve the Company of any of its
obligations hereunder.
(3) OTHER INSURANCE.
This insurance shall apply only as excess insurance over any other
valid and collectible insurance available to the INSURED.
(4) SUBROGATION.
In the event of any payment under this policy, the Company shall be
subrogated to all the INSURED'S rights of recovery therefor against
any person or organization and the INSURED shall execute and
deliver instruments and papers and do whatever else is necessary to
secure such rights. The INSURED shall do nothing after loss to
prejudice such rights.
(5) CHANGES.
Notice to any agent or knowledge possessed by any agent or by any
other person shall not effect a waiver or a change in any part of
this policy or estop the Company from asserting any right under the
terms of this policy, nor shall the terms of this policy be waived
or changed, except by endorsement issued to form a part of this
policy.
(6) ASSIGNMENT.
Assignment of interest under this policy shall not bind the Company
until its consent is endorsed hereon; if, however, the INSURED
shall become incompetent or die, such insurance as is afforded by
this policy shall apply to the INSURED'S legal representative as an
INSURED, but only while acting within the scope of said INSURED'S
duties as such.
(7) CANCELLATION.
This policy may be cancelled on behalf of the INSUREDS at any time
by written notice to the Company. This policy may also be
cancelled on behalf of the Company by mailing to the INSURANCE
REPRESENTATIVE at the address of the Trust or Plan shown in the
Declarations, written notice stating when, not less than thirty
(30) days thereafter, the cancellation shall become effective. The
mailing of such notice shall be sufficient proof of notice, and
this policy shall terminate at the date and hour specified in such
notice.
If this policy shall be cancelled by the INSUREDS the Company shall
retain the customary short rate proportion of the premium hereon.
If this policy shall be cancelled by or on behalf of the Company,
the Company shall retain the pro-rata proportion of the premium
hereon. Payment or tender of any unearned premium by the Company
shall not be a condition precedent to the effectiveness of
cancellation, but such payment shall be made as soon as
practicable.
(8) DECLARATIONS.
By acceptance of this policy, each INSURED agrees that the
statements in the Application attached to this policy are said
INSURED'S agreements and representations, that this policy is
issued in reliance upon the truth of such representations and that
this policy embodies all agreements existing between said INSURED
and the Company or any of its agents relating to this insurance.
(9) AUTHORIZATION.
By acceptance of this policy, the INSURANCE REPRESENTATIVE agrees to
act on behalf of all INSUREDS with respect to the payment of
premiums and the receiving of any return premiums that may become
due under this policy, and the receiving of all notices of
cancellation, non-renewal or change of coverages and the INSUREDS
agree that they have, individually and collectively, delegated this
authority exclusively to the INSURANCE REPRESENTATIVE. Nothing
herein shall relieve each INSURED from giving any notice to the
Company that is required under Condition (1) of the policy.
(10) RECOURSE.
In the event that an INSURED breaches any fiduciary obligation
imposed by the Employee Retirement Income Security Act of 1974, as
it may be amended from time to time, it is agreed that the Company
has the right of recourse against any such INSURED for any amount
paid by the Company on account of such a breach of fiduciary
obligation, but the Company shall have no such right of recourse if
this policy has been purchased by an Employer or by an Employee
organization.
(11) LIBERALIZATION CLAUSE.
If during the period that insurance is in force under this policy,
or within 45 days prior to the inception date thereof, on behalf of
the Company there be adopted, or filed with and approved or
accepted by the insurance supervisory authorities, all in
conformity with law, any changes in the form attached to this
policy by which this form of insurance could be extended or
broadened without increased premium charge by endorsement or
substitution of form, then such extended or broadened insurance
shall inure to the benefit of the INSURED hereunder as though such
endorsement or substitution of form had been made.
IN WITNESS WHEREOF, the Company has caused this policy to be signed
by its President and a Secretary at Hartford, Connecticut, and
countersigned on the Declarations page by a duly authorized agent of the
Company.
/s/LOUISE L. MCCORMICK /s/RONALD E. COMPTON
Secretary President
PENSION AND WELFARE FUND
FIDUCIARY RESPONSIBILITY INSURANCE POLICY
OMNIBUS NAME OF DESIGNATED TRUST OR PLAN ENDORSEMENT
(To be attached to and form part of Pension and Welfare Fund
Fiduciary Responsibility Insurance Policy)
It is agreed that:
1. From and after the time this endorsement becomes effective, the Name
of Designated Trust or Plan referred to in Item 1. of the
Declarations is:
Any Employee Benefit Plan sponsored by the employer listed in Item
2., below, or jointly-sponsored by said employer and a labor
organization, for the exclusive benefit of the employees of said
employer; subject, however, to the notice requirement set forth in
Section III (5) DEFINITION OF INSURED.
2. Name of employer: The Procter & Gamble Company
This endorsement, issued by one of the below named companies, forms a part
of the policy to which attached, effective on the inception date of the
policy unless otherwise stated herein.
(The information below is required only when this endorsement is issued
subsequent to preparation of the policy.)
Endorsement effective 6-30-93 Policy No. 68 FF 100827733 BCA
Endorsement No.
Name of Designated Trust or Plan
The Procter & Gamble Company Profit Sharing Trust; etal
Countersigned by /s/ROBERT D. LANG
(Authorized Representative)
The Aetna Casualty and Surety Company
The Standard Fire Insurance Company
Hartford, Connecticut 06156
PENSION AND WELFARE FUND
FIDUCIARY RESPONSIBILITY INSURANCE POLICY
CONTINUITY OF COVERAGE ENDORSEMENT
It is agreed that the policy is amended as follows:
1. By deleting Section V. POLICY PERIOD: TERRITORY. and substituting in
lieu thereof the following:
V. POLICY PERIOD: TERRITORY.
This insurance applies only to claims first made during the policy
period described in the Declarations within the United States of
America, its territories or possessions or Canada; provided the
INSURED at the effective date of this insurance, or at the time the
INSURED first purchased PRIOR SIMILAR COVERAGE, had no knowledge of
or could not have reasonably foreseen any circumstances which might
result in such claim; but this insurance shall not apply to claims
arising out of any WRONGFUL ACT of which the INSURED became aware
while such PRIOR SIMILAR COVERAGE was in effect and which was
reported to the company which provided such PRIOR SIMILAR COVERAGE.
2. By adding to Section IV. OTHER DEFINITIONS. the following new
definition:
(4) "PRIOR SIMILAR COVERAGE" shall mean insurance which provides in
whole or in part the insurance afforded by this policy which the
INSURED has maintained on an uninterrupted basis until the
effective date of this policy.
This endorsement forms a part of the policy to which attached, effective on
the inception date of the policy unless otherwise stated herein.
(The information below is required only when this endorsement is issued
subsequent to preparation of the policy.)
Endorsement effective 6-30-93 Policy No. 66 FF 100827733 BCA
Endorsement No.
Name of Designated Trust or Plan
The Procter & Gamble Company Profit Sharing Trust; etal
The Aetna Casualty and Surety Company
Hartford, Connecticut 06156
Countersigned by /s/ROBERT D. LANG
(Authorized Representative)
PENSION AND WELFARE FUND
FIDUCIARY RESPONSIBILITY INSURANCE POLICY
ENDORSEMENT FR-1
It is agreed that the policy is amended as follows:
1. By deleting paragraph (1) of Section II. EXCLUSIONS and substituting
the following therefor:
(1) Arising out of any dishonest, fraudulent or criminal act, or
willful violation of any statute, but this exclusion does not apply
to a claim upon which suit may be brought by reason of any alleged
dishonesty on the part of the INSURED, unless:
2. By deleting Section X. EXTENSION CLAUSE in its entirety and
substituting the following therefor:
X. EXTENSION CLAUSE.
It is agreed that if the Company terminates or refuses to renew this
policy, the INSURED may give to the Company notice that it desires
to be INSURED for an additional period of twelve (12) months after
the effective date of termination or nonrenewal, provided that
written notice of its desire to be INSURED for said additional
period is given to the Company prior to the effective date of
termination or nonrenewal of the policy by the Company or within 10
days following the effective date of termination or nonrenewal.
If the INSURED terminates this policy or declines to accept renewal,
the INSURED may give to the Company notice that it desires to be
INSURED for an additional period of twelve (12) months after the
effective date of termination or nonrenewal, provided that written
notice of its desire to be INSURED for said additional period is
given to the Company prior to the effective date of termination or
nonrenewal.
The Company, at its sole option, may grant further extension periods
beyond the twelve (12) months provided for herein.
The insurance afforded during any extension period or periods shall
apply only to claims made against the INSURED during the said
extension period or periods by reason of a WRONGFUL ACT committed
or alleged to have been committed prior to the effective date of
termination or nonrenewal and which would be otherwise INSURED by
this policy, subject to the following provisions:
(a) Such additional period shall be deemed part of the policy
period and not an addition thereto;
(b) Such additional period of time shall terminate forthwith on
the effective date of any other insurance obtained by the
INSURED or its successors in business, replacing in whole or
in part the insurance afforded by this policy. Where such
other policy provides no coverage for loss sustained prior to
its effective date, it shall not be deemed to be a replacement
of this policy.
The INSURED shall pay to the Company an additional premium of 25% of
the equivalent annual premium hereunder for each 12 month period of
extension.
3. By deleting subsection (1)(a) of Section XI. CONDITIONS and
substituting the following therefor:
(a) In the event the INSURED shall first become aware of any
claim or allegation of a WRONGFUL ACT, written notice of such
claim or allegation shall be given by or for the INSURED to
the Company or any of its authorized agents as soon as
practicable and the INSURED shall give the Company such
information concerning such claim or allegation as the Company
shall reasonably require.
This endorsement forms a part of the policy to which attached, effective on
the inception date of the policy unless otherwise stated herein.
(The information below is required only when this endorsement is issued
subsequent to preparation of the policy.)
Endorsement effective 6-30-93 Policy No. 68 FF 100827733 BCA
Name of Designated Trust or Plan
The Procter & Gamble Company Profit Sharing Trust; etal
Countersigned by /s/ROBERT D. LANG
(Authorized Representative)
PENSION AND WELFARE FUND
FIDUCIARY RESPONSIBILITY INSURANCE POLICY
ENDORSEMENT FR-2
It is agreed that the policy is amended as follows:
Section I. INSURING AGREEMENT is deleted in its entirety and the following
is substituted therefor:
I. INSURING AGREEMENT.
The Company will pay on behalf of the INSURED all sums which the INSURED
shall become legally obligated to pay as DAMAGES on account of any claim
made against the INSURED for any WRONGFUL ACT committed or alleged to have
been committed by the INSURED or by any natural person for whose WRONGFUL
ACT the INSURED is legally liable.
The Company shall have the right and duty to defend the INSURED in any
claim seeking pecuniary or nonpecuniary relief for a WRONGFUL ACT even if
the allegations of the claim are groundless, false or fraudulent, and may
make such investigation and settlement of any claim as it deems expedient,
or may, at its sole option, give its written consent to the defense by the
INSURED of such claim, but the Company shall not be obligated to pay any
claim or judgment or to defend any suit, nor pay for the defense of any
suit being conducted by the INSURED with the Company's written consent,
after the applicable limit of the Company's liability has been exhausted by
payment of judgments or settlements.
This endorsement forms a part of the policy to which attached, effective on
the inception date of the policy unless otherwise stated herein.
(The information below is required only when this endorsement is issued
subsequent to preparation of the policy.)
Endorsement effective 6-30-93 Policy No. 68 FF 100827733 BCA
Name of Designated Trust or Plan
The Procter & Gamble Company Profit Sharing Trust; etal
Countersigned by /s/ROBERT D. LANG
(Authorized Representative)
PENSION AND WELFARE FUND FIDUCIARY RESPONSIBILITY INSURANCE POLICY
To be attached to and form part of Policy No. 68 FF 100827733 BCA
issued to The Procter & Gamble Company Profit Sharing Trust; et al
It is agreed that:
The attached policy is amended by adding an additional section
thereto as follows:
"XII DEDUCTIBLE AMOUNT
**Twenty Five Thousand and 00/100------ ($25,000.00) (hereinafter
referred to as Deductible Amount) shall be deducted from the
amount of each claim covered hereunder, including all expense
incurred, and the Company shall be liable only in excess of
such Deductible Amount. Claims based on or arising out of the
same Wrongful Act or interrelated Wrongful Acts of one or more
of the INSUREDS shall be considered a single claim and only
one Deductible Amount shall be applied to each single claim.
Subject to Section IX, CONSENT TO SETTLE, of the attached
policy, the Company may pay any part or all of the Deductible
Amount to effect settlement of any claim or suit and upon
notification of the action taken, the INSURED shall promptly
reimburse the Company for such part of the Deductible Amount
as has been paid by the Company.
**This Endorsement has been amended as follows:
The Deductible is to apply to defense costs only.
THE AETNA CASUALTY AND SURETY COMPANY
By: /s/ROBERT D. LANG
Authorized Representative
Accepted by:
_____________________________
Insurance Representative
(Excess over an underlying amount)
ENDORSEMENT
To be attached to and form part of
Policy No. 68 FF 100827733 BCA
issued to The Procter & Gamble Company Profit Sharing Trust; etal
It is agreed that:
1. Section II of the attached policy, EXCLUSIONS, is amended by
adding the following exclusion:
(9) Arising out of plan terminations or restructures alleging
impairment of assets, or alleging wrongful distribution
of plan assets.
This endorsement forms a part of the policy to which attached, effective on
the inception date of the policy unless otherwise stated herein.
(The information below is required only when this endorsement is issued
subsequent to preparation of the policy.)
Endorsement effective Policy No.
Name of DESIGNATED TRUST OR PLAN
Countersigned by /s/ROBERT D. LANG
(Authorized Representative)
Accepted by:
_______________________________
Insurance Representative
TO EXCLUDE LOSS ALLEGING IMPAIRMENT
OR WRONGFUL DISTRIBUTION OF ASSETS
ENDORSEMENT
To be attached to and form part of Policy No. 68 FF 100827733 BCA
issued to The Procter & Gamble Company Profit Sharing Trust; etal
It is agreed that:
1. Section II of the attached policy, EXCLUSIONS, is amended by
adding the following exclusion:
(10) Based on, arising out of, directly or indirectly resulting
from, in consequence of, or in any way involving, actual
or alleged seepage, pollution or contamination of any
kind.
This endorsement forms a part of the policy to which attached, effective on
the inception date of the policy unless otherwise stated herein.
(The information below is required only when this endorsement is issued
subsequent to preparation of the policy.)
Endorsement effective Policy No.
Name of DESIGNATED TRUST OR PLAN
Countersigned by /s/ROBERT D. LANG
(Authorized Representative)
Accepted by:
_______________________________
Insurance Representative
POLLUTION EXCLUSION ENDORSEMENT
SPECIAL ENDORSEMENT #1
To be attached to and form part of Policy 68 FF 100827733 BCA
issued by The Aetna Casualty and Surety Company (hereinafter called
Controlling Company)
in favor of The Procter & Gamble Profit Sharing Trust; et al.
It is agreed that:
1. The term "Underwriter" as used in the attached policy shall be
construed to mean, unless otherwise specified in this rider, all the
Companies executing the attached policy.
2. Each of said Companies shall be liable for such proportion of
any loss under the attached policy as the amount underwritten by such
Company as specified in the Schedule forming a part hereof, bears to the
Annual Aggregate Limit of Liability of the attached policy.
3. Each of said Companies shall be liable for any payments made
pursuant to Section VIII, Supplementary Payments in proportion for which
each Companies' respective Limit of Liability bears to the Annual Aggregate
Limit of the policy.
4. In the absence of a request from any of said Companies to pay
premiums directly to it, premiums for the attached policy may be paid to
the Controlling Company for the account of all of said Companies.
5. In the absence of a request from any of said Companies that
notice of claim and proof of loss be given to or filed directly with it,
the giving of such notice to and the filing of such proof with, the
Controlling Company shall be deemed to be in compliance with the conditions
of the attached policy for the giving of notice of loss and the filing of
proof of loss, if given and filed in accordance with said conditions.
6. The Controlling Company may give notice in accordance with the
terms of the attached policy, terminating or canceling the attached policy,
and any notice so given shall terminate or cancel the liability of all of
said Companies.
7. Any Company other than the Controlling Company may give notice
in accordance with the terms of the attached policy, terminating or
canceling the entire liability of such other Company under the attached
policy.
8. In the absence of a request from any of said Companies that
notice of termination or cancellation by the INSURED of the attached policy
in its entirety be given to or filed directly with it, the giving of such
notice in accordance with the terms of the attached policy to the
Controlling Company shall terminate or cancel the liability of all of said
Companies as an entirety. The giving of notice for termination or
cancellation in accordance with the terms of the attached bond to any
Companies shall terminate or cancel the liability of the Controlling
Company.
9. In the event of the termination or cancellation of the attached
policy as an entirety, no Company shall be liable to the INSURED for a
greater proportion of any return premium due the INSURED than the amount
underwritten by such Company bears to the Annual Aggregate Limit of
Liability of the attached policy.
10. In the event of the termination or cancellation of the attached
policy as to any Company, such Company alone shall be liable to the INSURED
for any return premium due the INSURED on account of such termination or
cancellation. The termination or cancellation of the attached policy as to
any Company other than the Controlling Company shall not terminate, cancel
or otherwise affect the liability of the other Companies under the attached
policy.
11. This rider shall become effective as of 12:01 a.m. on 6/30/93
standard time.
Underwritten for the sum of $20,000,000
except as follows:
Controlling Company
By: The Aetna Casualty and Surety Company
Attest: /s/DANIEL A. WALLA
Underwritten for the sum of $10,000,000
except as follows:
By: Celtic Insurance Company
Attest:
Accepted:
INSURED
By: The Procter & Gamble Company; etal
