Exhibit (10-4)
ADDITIONAL REMUNERATION PLAN
The Procter & Gamble Company
(As amended July 11, 2000)
RESOLVED, That the following plan for additional remuneration of the
Chairman of the Board and such other officers and employees of The Procter &
Gamble Company and subsidiary companies who, in the opinion of the Chief
Executive, are largely responsible for the success and development of the
business, be and the same is hereby adopted providing for additions to their
compensation in relation to the consolidated profit of the Company for the
fiscal year and the contribution by those persons to the operation of the
Company. Such additional remuneration may be paid in recognition of the
contribution of such persons during that year, and/or their contribution to
earnings growth over the current and prior years. Credits to a fund established
for this purpose are to be based upon a percentage of the annual consolidated
profit of the companies.
1. Each fiscal year there shall be set aside in an additional remuneration
fund an amount equal to five percent of the consolidated profit before
providing for foreign and United States Federal Income Taxes, based on
income of The Procter & Gamble Company and its subsidiary companies
included in its Consolidated Statement of Profit and Loss for such fiscal
year, conditional upon there being left for consolidated net profit an
amount at least equal to the sum of the dividends on the outstanding
Preferred Stock of The Procter & Gamble Company, plus the sum of the
dividends on the outstanding Common Stock of The Procter & Gamble Company
for said fiscal year, prior deductions having been provided for of the full
amount of the contributions to the Profit Sharing Trust and Employee Stock
Ownership Plan; provided, however, that if at the end of any fiscal year
the full amount equal to said five percent cannot be set aside on account
of the condition above stated, then the amount to be set aside shall be
reduced to the extent necessary to meet said condition. Unawarded balances
in any year shall remain in said fund and be available in later years;
provided, however, that this Board reserves the right to withdraw from said
fund any unawarded balances or part thereof remaining after the award at
the end of any fiscal year.
2. For each fiscal year the Compensation Committee of the Board of Directors
shall determine the method of payment and the amount of the additional
remuneration to be awarded from said fund to each principal officer elected
by the Board of Directors. The Chief Executive shall determine which other
persons are to receive additional remuneration out of said fund and the
method of payment and the amount to be awarded to each.
3. Awards may be made by the Chief Executive to any employee, including
principal officers elected by the Board of Directors except the Chairman of
the Board, upon the termination of their employment or the granting of a
leave of absence where their last year of employment is less than the full
fiscal year. Normally such awards will be made only if the period of
employment for such fiscal year is one month or more. The Chief Executive
may delegate to an appropriate Vice President the authority to make such
awards to persons who are not principal officers.
4. The consolidated profit and the consolidated net profit of The Procter &
Gamble Company and the subsidiary companies consolidated for each year
shall be determined in accordance with generally accepted principles of
accounting and approved by the independent certified public accountants
selected by this Board, and no person who may, at any time, be selected to
share in the fund provided for in paragraph 1 above shall have any right to
question the consolidated profit or the consolidated net profit so
determined.
5. While the amount received by any one individual for any year under this
resolution shall be considered as earned remuneration in addition to salary
paid, it shall be understood that this plan does not give to any officer or
employee any contract rights, express or implied, against any Company for
any award from the Fund or for compensation in addition to the salary paid
to him, or any right to question the action of the Board of Directors, the
Compensation Committee or the Chief Executive.
6. Notwithstanding the foregoing, if there is a Change in Control (as
hereinafter defined) in any fiscal year, an additional remuneration fund
shall be set aside and additional remuneration awards shall be made for the
period from the beginning of the fiscal year in which a Change in Control
occurred up to and including the date of such Change in Control ("CIC
Period") pursuant to this Plan, substituting "CIC Period" for "fiscal
year." If financial statements specified in paragraphs 1 and r are not
available for the CIC Period, the Compensation Committee shall determine
the amount of additional remuneration awarded from the fund in good faith.
"Change in Control" shall mean the occurrence of any of the following:
(a) An acquisition (other than directly from the Company) of any voting
securities of the Company (the "Voting Securities") by any "Person"
(as the term person is used for purposes of Section 13(d) or 14(d) of
the Exchange Act), immediately after which such Person has "Beneficial
Ownership" (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of twenty percent (20%) or more of the then outstanding
Shares or the combined voting power of the Company's then outstanding
Voting Securities; provided, however, in determining whether a Change
in Control has occurred pursuant to this Section 6(a), Shares or
Voting Securities which are acquired in a "Non-Control Acquisition"
(as hereinafter defined) shall not constitute an acquisition which
would cause a Change in Control. A "Non-Control Acquisition" shall
mean an acquisition by (i) an employee benefit plan (or a trust
forming a part thereof) maintained by (A) the Company or (B) any
corporation or other Person of which a majority of its voting power or
its voting equity securities or equity interest is owned, directly or
indirectly, by the Company (for purposes of this definition, a
"Related Entity"), (ii) the Company or any Related Entity, or (iii)
any Person in connection with a "Non-Control Transaction" (as
hereinafter defined);
(b) The individuals who, as of July 11, 2000 are members of the Board (the
"Incumbent Board"), cease for any reason to constitute at least half
of the members of the Board; or, following a Merger (as hereinafter
defined) which results in a Parent Corporation (as hereinafter
defined), the board of directors of the ultimate Parent Corporation;
provided, however, that if the election, or nomination for election by
the Company's common stockholders, of any new director was approved by
a vote of at least two-thirds of the Incumbent Board, such new
director shall, for purposes of this Plan, be considered as a member
of the Incumbent Board; provided further, however, that no individual
shall be considered a member of the Incumbent Board if such individual
initially assumed office as a result of either an actual or threatened
"Election Contest" (as described in Rule 14a-11 promulgated under the
Exchange Act) or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board (a "Proxy
Contest") including by reason of any agreement intended to avoid or
settle any Election Contest or Proxy Contest; or
(c) The consummation of:
(i) A merger, consolidation or reorganization with or into the
Company or in which securities of the Company are issued (a
"Merger"), unless such Merger is a "Non-Control Transaction." A
"Non-Control Transaction" shall mean a Merger where:
(A) the stockholders of the Company, immediately before such
Merger own directly or indirectly immediately following such
Merger at least fifty percent (50%) of the combined voting
power of the outstanding voting securities of (x) the
corporation resulting from such Merger (the "Surviving
Corporation") if fifty percent (50%) or more of the combined
voting power of the then outstanding voting securities of
the Surviving Corporation is not Beneficially Owned,
directly or indirectly by another Person (a "Parent
Corporation"), or (y) if there is one or more Parent
Corporations, the ultimate Parent Corporation;
(B) the individuals who were members of the Incumbent Board
immediately prior to the execution of the agreement
providing for such Merger constitute at least half of the
members of the board of directors of (x) the Surviving
Corporation, if there is no Parent Corporation, or (y) if
there is one or more Parent Corporations, the ultimate
Parent Corporation; and
(C) no Person other than (1) the Company, (2) any Related
Entity, (3) any employee benefit plan (or any trust forming
a part thereof) that, immediately prior to such merger,
consolidation or reorganization, was maintained by the
Company or any Related Entity, or (4) any Person who,
immediately prior to such Merger had Beneficial Ownership of
twenty percent (20%) or more of the then outstanding Voting
Securities or Shares, has Beneficial Ownership of twenty
percent (20%) or more of the combined voting power of the
outstanding voting securities or common stock of (x) the
Surviving Corporation if there is no Parent Corporation, or
(y) if there is one or more Parent Corporations, the
ultimate Parent Corporation;
(ii) A complete liquidation or dissolution of the Company; or
(iii) The sale or other disposition of all or substantially all of the
assets of the Company to any Person (other than a transfer to a
Related Entity or under conditions that would constitute a
Non-Control Transaction with the disposition of assets being
regarded as a Merger for this purpose or the distribution to the
Company's stockholders of the stock of a Related Entity or any
other assets).
Notwithstanding the foregoing, a Change in Control shall not be deemed to
occur solely because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the then outstanding Shares
or Voting Securities as a result of the acquisition of Shares or Voting
Securities by the Company which, by reducing the number of Shares or Voting
Securities then outstanding, increases the proportional number of shares
Beneficially Owned by the Subject Persons, provided that if a Change in
Control would occur (but for the operation of this sentence) as a result of
the acquisition of Shares or Voting Securities by the Company, and after
such share acquisition by the Company, the Subject Person becomes the
Beneficial Owner of any additional Shares or Voting Securities which
increases the percentage of the then outstanding Shares or Voting
Securities Beneficially Owned by the Subject Person, then a Change in
Control shall occur.
7. This Board reserves the right to terminate this plan at any time during any
fiscal year and any unawarded balance remaining in the fund shall be
withdrawn.
Original Plan - Adopted April 12, 1949
Amended - September 12, 1950 (Eff. 7/1/50)
Paragraphs 1, 2, and 7 amended - June 14, 1960 (Eff. 7/1/59)
Paragraphs 2 and 4 amended - June 13, 1961 (Eff. 7/1/60)
Entire Plan amended - June 10, 1975 (Eff. 7/1/75)
Paragraphs 1, 2 and 5 amended - March 13, 1979 (Eff. 10/10/78)
Paragraphs 1 and 8 amended - May 13, 1980 (Eff. 5/13/80)
Resolution and Paragraphs 1, 2 and 8 amended - April 14, 1981 (Eff. 4/14/81)
Resolution and Paragraphs 2, 3 and 8 amended - July 12, 1983 (Eff. 7/12/83)
Paragraphs 1 and 8 amended - June 11, 1985 (Eff. 6/11/85)
Resolution and Paragraphs 2, 3 and 8 amended - June 10, 1986 (Eff. 6/10/86)
Paragraphs 1 and 8 amended - June 14, 1988 (Eff. 6/14/88)
Paragraphs 1, 2 and 8 amended - June 12, 1990 (Eff. 6/12/90)
Paragraphs 3, 6 amended and Paragraph 8 deleted July 11, 2000 (eff.7/11/00)
