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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
(Mark One)
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 1997
OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transmission period from to
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Commission file number 1-07151
THE CLOROX COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 31-0595760
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1221 Broadway, Oakland, CA 94612-1888
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, (510) 271-7000
including area code
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
- ------------------------ ------------------------
Common Stock, $1 par value New York Stock Exchange
Pacific Exchange
Securities registered pursuant to Section 12(g) of the Act: NONE.
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.[ ]
Aggregate market value of voting stock held by non-affiliates
of the registrant at July 31, 1997: $5,023,617,408.
Number of shares of common stock outstanding at
July 31, 1997: 51,597,992 (prior to giving effect to the 2:1
stock split effected in the form of a dividend payable on
September 2, 1997).
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Annual Report to Stockholders
for the Year Ended June 30, 1997 are incorporated by reference
into Parts I, II and IV of this Report. Portions of the
registrant's definitive Proxy Statement for the Annual
Meeting of Stockholders to be held on November 19, 1997,
which will be filed with the United States Securities and
Exchange Commission within 120 days after the end of the
registrant's fiscal year ended June 30, 1997, are incorporated
by reference into Part III of this Report.
PART I
ITEM l. BUSINESS
(a) GENERAL DEVELOPMENT OF BUSINESS.
The Company (the term "Company" as used herein includes the
registrant identified on the facing sheet, The Clorox
Company, and its subsidiaries, unless the context indicates
otherwise) was originally founded in Oakland, California in
1913 as the Electro-Alkaline Company. It was reincorporated
as Clorox Chemical Corporation in 1922, as Clorox Chemical
Co. in 1928, and as The Clorox Company (an Ohio corporation)
in 1957, when the business was acquired by The Procter &
Gamble Company. The Company was fully divested by The
Procter & Gamble Company in 1969 and, as an independent
company, was reincorporated in 1973 in California as The
Clorox Company. In 1986, the Company was reincorporated
in Delaware.
Portions of The Clorox Company Annual Report for the Year
Ended June 30, 1997 ("Annual Report") to its stockholders
are incorporated herein by specific reference.
During fiscal year 1997, the Company continued to focus on
expanding its domestic business, through internal
development of new products and line extensions of existing
products. The Company introduced 15 new products in the
U.S. during fiscal year 1997. It also continued its
strategy of considering strategic acquisitions and, in that
regard, entered the automotive appearance product market
with its acquisition of Armor All Products Corporation
during fiscal year 1997.
Internationally, the Company continued the implementation
of its strategy of expanding its laundry, household cleaning
and insecticide businesses to markets where these
categories are not yet fully developed, but where it
believes high potential exists. The Company made three
international acquisitions in fiscal year 1997, consisting
of the "Limpido" brand of liquid bleach in Colombia, the
"Pinoluz" brand of pine cleaner in Argentina, and the Shell
Group's insecticides and cleaning products business in
Chile. In addition, the Company introduced 24 new products
or line extensions in previously established international
operations.
(b) FINANCIAL INFORMATION ABOUT INDUSTRY SEGMENTS.
The Company's operations are predominantly in one segment
- -- non-durable household consumer products. Such operations
include the production and marketing of non-durable
consumer products sold primarily through grocery and other
retail stores. Financial information for the last three
fiscal years attributable to the Company's operations is set
forth in the Consolidated Financial Statements, pages 24
through 37 of the Annual Report, incorporated herein by
this reference.
Unless otherwise stated, all share numbers and stock
prices in this Form 10-K give effect to the 2:1 stock split
declared July 15, 1997, effected in the form of a stock
dividend payable September 2, 1997 on all shares of Common
Stock outstanding as of the close of business on July 28,
1997.
(c) NARRATIVE DESCRIPTION OF BUSINESS.
PRINCIPAL PRODUCTS. Products currently marketed in the
United States and certain foreign countries are listed on
the inside back cover (page 44) of the Annual Report,
incorporated herein by this reference.
PRINCIPAL MARKETS - METHODS OF DISTRIBUTION. Most non-
durable household consumer products are nationally
advertised and sold within the United States to grocery
stores through a network of brokers, and to mass
merchandisers, warehouse clubs, military and other retail
stores primarily through a direct sales force. The Company
also sells, within the United States, institutional versions
of specialty food and non-food products. Outside the
United States, the Company sells consumer products through
subsidiaries, licensees, distributors and joint venture
arrangements with local partners.
SOURCES AND AVAILABILITY OF RAW MATERIALS. The Company has
obtained ample supplies of all required raw materials and
packaging supplies, which, with a few exceptions, were
available from a wide variety of sources during fiscal
year 1997. Contingency plans have been developed for
single sourced supplier materials.
PATENTS AND TRADEMARKS. Although some products are
covered by patents, the Company does not believe that
patents, patent licenses or similar arrangements are
material to its business. Most of the Company's brand
name consumer products are protected by registered
trademarks. Its brand names and trademarks are extremely
important to its business and the Company pursues a course
of vigorous action against apparent infringements.
SEASONALITY. The only portions of the operations of the
Company which have any significant degree of seasonality
are the marketing of charcoal briquets, insecticides, and
automotive appearance products. Most sales of these
product lines occur in the third and fourth fiscal quarters.
Working capital to carry inventories built up in the off-
season and to extend terms to customers is generally
provided by internally generated funds plus commercial
paper lines of credit.
CUSTOMERS AND ORDER BACKLOG. During fiscal years 1995,
1996 and 1997, revenues from the Company's sales of its
products to Wal-Mart Stores, Inc. and its affiliated
companies were 13%, 14% and 15%, respectively, of the
Company's gross consolidated revenues. Except for this
relationship, the Company is not dependent upon any other
single customer or a few customers. Order backlog is not
a significant factor in the Company's business.
RENEGOTIATION. None of the Company's operations is subject
to renegotiation or termination at the election of the
Federal government.
COMPETITION. The markets for consumer products are highly
competitive and most of the Company's products compete with
other nationally advertised brands within each category,
and with "private label" brands and "generic" non-branded
products of grocery chains and wholesale cooperatives.
Competition is encountered from similar and alternative
products, many of which are produced and marketed by major
national concerns having financial resources greater than
those of the Company. Depending on the competitor, the
Company's products compete with competitive products on
price, quality or other benefits to consumers.
A newly introduced consumer product (whether improved or
newly developed) usually encounters intense competition
requiring substantial expenditures for advertising and
sales promotion. If a product gains consumer acceptance,
it normally requires continuing advertising and promotional
support to maintain relative market position.
RESEARCH AND DEVELOPMENT. The Company's operations
incurred expenses of approximately $50,489,000 in fiscal
year 1997, $45,821,000 in fiscal year 1996 and
$44,819,000 in fiscal year 1995 on research activities
relating to the development of new products or the
maintenance and improvement of existing products. None of
such research activity was customer sponsored.
ENVIRONMENTAL MATTERS. Historically, the Company has not
made material capital expenditures for environmental control
facilities or to comply with environmental laws and
regulations. However, in general, the Company does
anticipate spending increasing amounts annually for
facility upgrades and for environmental programs. The
amount of capital expenditures for environmental compliance
was not material in fiscal year 1997 and is not expected to
be material in the next fiscal year.
In addition, the Company is involved in certain other
environmental matters, including:
(i) The Company sold its architectural coatings business
in fiscal year 1990. In connection with the
disposition of those manufacturing facilities, the
Company retained responsibility for certain
environmental obligations. The financial reserve
established at the time of the sale is expected to
be adequate to cover the financial responsibilities
for environmental matters which may arise in the
future.
(ii) The Company was named as a potentially responsible
party ("PRP") by the Environmental Protection
Agency pursuant to the Spill Compensation and
Control Act, the Sanitary Landfill Closure and
Contingency Fund Act, and a section of the Solid
Waste Management Act, for a site in New Jersey.
Based on the Company's experience and because the
Company's level of involvement is extremely
limited, the Company does not expect that this
matter will represent a material cost to the Company
in the future.
(iii) The Company continues to operate a water treatment
operation at its former Oakland, California
manufacturing location. A financial reserve
established in an earlier year is considered by
management to be adequate to cover the future costs
or liability in connection with this manufacturing
location.
(iv) An explosion attributed to methane caused property
damage and personal injury in a residential area
near a site formerly operated by a subsidiary of
the Company in Kingsford, Michigan. The Company
was named as a PRP and jointly with other PRPs and
the Environmental Protection Agency is investigating
the site. The investigation is ongoing and the
Company's potential liability is not expected to be
material in the future.
(v) The Company was named as a PRP by the State of
Wisconsin for a site in Rice Lake, Wisconsin in
connection with the Company's former frozen foods
business. Based on the Company's experience and
because the Company's level of involvement was
limited, the Company does not expect that this
matter will represent a material cost to the
Company in the future.
(vi) The Company was named as a PRP by the Environmental
Protection Agency for a landfill site in Whittier,
California. Based on the Company's experience and
because the Company's level of involvement was
extremely limited, the Company does not expect that
this matter will represent a material cost to the
Company in the future.
(vii) The Company was served with a Notice of Violation
by the Environmental Protection Agency pursuant to
the Clean Air Act for a site operated by its
subsidiary in Beryl, West Virginia. Based on the
Company's experience, the Company does not expect
that this matter will represent a material cost to
the Company in the future.
(viii) The Company was served with a Notice of Violation
by the Environmental Protection Agency pursuant to
the Clean Air Act for a site in Chicago, Illinois.
Based on the Company 's experience, the Company
does not expect that this matter will represent a
material cost to the Company in the future.
Although the potential cost to the Company related to
ongoing environmental matters is uncertain due to such
factors as: the unknown magnitude of possible pollution and
clean-up costs; the complexity and evolving nature of
governmental laws and regulations and their interpretations;
and the timing, varying costs and effectiveness of
alternative clean-up technologies; based on its experience
and without offsetting for expected insurance recoveries or
discounting for present value, the Company does not expect
that such costs individually and in the aggregate will
represent a material cost to the Company or affect its
competitive position.
NUMBER OF PERSONS EMPLOYED. At the end of fiscal year 1997,
approximately 5,500 persons were employed by the Company.
FORWARD-LOOKING STATEMENTS AND RISK FACTORS. This Form 10-K
contains "forward-looking" statements under applicable
securities laws. In addition, from time to time, the
Company may publish forward-looking statements relating to
such matters as anticipated financial performance, business
prospects, new products, research and development
activities, plans for international expansion, and similar
matters. The Private Securities Litigation Reform Act of
1995 provides a safe harbor for forward-looking statements.
In order to comply with the terms of the safe harbor, the
Company notes that a variety of factors could cause the
Company's actual results and experience to differ materially
from the anticipated results or other expectations expressed
in the Company's forward-looking statements. The risks and
uncertainties that may affect operations, performance,
product development, and results of the Company's business
include those discussed elsewhere in this Form 10-K and
the following:
Fluctuations in Quarterly Operating Results and Stock Price.
Although the Company's recent historical operating results
have improved when compared with the same quarter in the
previous fiscal year, there can be no assurance that such
quarter-to-quarter comparisons will continue to improve,
or that if any improvement is shown, the degree of
improvement will meet investors' expectations. In addition,
sales volume growth, whether due to acquisitions or to
internal growth, can place burdens on the Company's
management resources and financial controls which, in turn,
can have a negative impact on operating results. The
Company's quarterly operating results will be influenced by
a host of factors which include the following: the
seasonality of its brands; the extent of competition; the
degree of market acceptance of new products and line
extensions; the mix of products sold in a given quarter;
changes in pricing policies by the Company and by its
competitors; acquisition costs and restructuring and other
charges associated with acquisitions; the ability of the
Company to develop, introduce, and market successful new
products and line extensions; the ability of the Company
to control its internal costs and the costs of its raw
materials and packaging materials; the Company's success
in expanding its international operations; changes in the
Company's strategy; personnel changes; and general economic
conditions. To a certain extent, the Company bases its
expense levels in anticipation of future revenues. If
revenue levels come in below such expectations, operating
results are likely to be adversely affected. Because of
all of these factors, the Company believes that quarter-to-
quarter comparisons of its results of operations should not
be relied upon as indications of future performance.
Future announcements concerning the Company or its
competitors, quarterly variations in operating results,
the introduction of new products and line extensions or
changes in product pricing policies by the Company or its
competitors, changes in earning estimates by analysts, or
changes in accounting policies, among other factors, could
cause the market price of the Company's common stock to
fluctuate substantially and have an adverse effect on the
price of the Company's common stock. In addition, stock
markets have experienced price and volume volatility and
such volatility in the future could have an adverse impact
on the Company's market price.
International Operations. The Company believes that its
international sales including exports, which were 16% of
net sales in fiscal year 1997, are likely to comprise an
increasing percentage of its total sales. As a result,
the Company will be increasingly subject to the risks
associated with foreign operations including economic or
political instability in its overseas markets, shipping
delays and fluctuations in foreign currency exchange rates
that may make its products more expensive in its foreign
markets, all of which could have a significant impact on
the Company's ability to sell its products on a timely
and competitive basis in foreign markets and may have a
materially adverse effect on the Company's results of
operations or financial position. The Company seeks to
limit foreign currency exchange risks through the use of
foreign currency forward contracts when practical, but
there can be no assurance that this strategy will be
successful. In addition, the Company's international
operations are subject to the risk of new and different
legal and regulatory requirements in local jurisdictions,
potential difficulties in staffing and managing local
operations, credit risk of local customers and
distributors, and potentially adverse tax consequences.
Importance of New Products and Line Extensions. In most
categories in which the Company competes, there are
frequent introductions of new products and line extensions.
Accordingly, an important factor in the Company's future
performance will be its ability to identify emerging
consumer and technological trends and to maintain and
improve the competitiveness of its products. However,
there can be no assurance that the Company will
successfully achieve those goals. Continued product
development and marketing efforts are subject to all the
risks inherent in the development of new products and line
extensions, including development delays, the failure of
new products and line extensions to achieve anticipated
levels of market acceptance, as well as the cost of failed
product introductions.
Integration of Acquisitions. One of the Company's
strategies is to increase its revenues and the markets it
serves through the acquisition of other businesses both in
the United States and overseas. There can be no assurance
that the Company will be able to identify, acquire, or
profitably manage additional companies or operations or
successfully integrate recent or future acquisitions into
its operations. In addition, there can be no assurance
that companies or operations acquired will be profitable
at the time of their acquisition or will achieve sales
levels and profitability that justify the investment made.
Environmental Matters. The Company is subject to various
environmental laws and regulations in the jurisdictions in
which it operates, including those relating to air
emissions, water discharges, the handling and disposal of
solid and hazardous wastes, and the remediation of
contamination associated with the use and disposal of
hazardous substances. The Company has incurred, and will
continue to incur, capital and operating expenditures and
other costs in complying with such laws and regulations in
both the United States and abroad. The Company is
currently involved in or has potential liability with
respect to the remediation of past contamination in the
operation of certain of its present and formerly owned and
leased facilities. In addition, certain of the Company's
present and former facilities have been or had been in
operation for many years, and over such time, some of
these facilities may have used substances or generated and
disposed of wastes that are or may be considered hazardous.
It is possible that such sites, as well as disposal sites
owned by third parties to which the Company has sent waste,
may in the future be identified and become the subject of
remediation. Accordingly, although the Company believes
that it is currently in substantial compliance with
applicable environmental requirements, it is possible the
Company could become subject to additional environmental
liabilities in the future which could result in a material
adverse effect on the Company's results of operations or
financial condition.
Intellectual Property. The Company relies on trademark,
trade secret, patent, and copyright law to protect its
intellectual property. There can be no assurance that
such intellectual property rights can be successfully
asserted in the future or will not be invalidated,
circumvented, or challenged. In addition, laws of certain
foreign countries in which the Company's products are or
may be sold do not protect the Company's intellectual
property rights to the same extent as the laws of the
United States. The failure of the Company to protect its
proprietary information and any successful intellectual
property challenges or infringement proceedings against
the Company could have a material adverse effect on the
Company's business, operating results, and financial
condition.
Government Regulation. The manufacture, packaging,
storage, distribution, and labeling of the Company's
products are all subject to extensive federal, state, and
foreign laws and regulations. For example, in the United
States, many of the Company's products are subject to
regulation by the Environmental Protection Agency, the Food
and Drug Administration, and the Consumer Product Safety
Commission. Most states have agencies which regulate in
parallel to these federal agencies. The failure to comply
with applicable laws and regulations could subject the
Company to civil remedies, including fines, injunctions,
recalls or seizures, as well as potential criminal
sanctions, any of which could have a material adverse
effect on the Company. Loss of or failure to obtain
necessary permits and registrations could delay or prevent
the Company from introducing new products, building new
facilities, or acquiring new businesses and could
adversely effect operating results.
(d) FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC
OPERATIONS AND EXPORT SALES.
Net sales, pretax earnings and identifiable assets
related to foreign operations and export sales are 16%,
8% and 27%, respectively, for fiscal year 1997. See Note
17 of Notes to Consolidated Financial Statements, page 35
of the Annual Report, incorporated herein by this reference.
ITEM 2. PROPERTIES
PRODUCTION FACILITIES. The Company operates production and
major warehouse facilities for its operations in 17
locations throughout the United States, and in 24 locations
internationally. Most of the space is owned. Some space,
mainly for warehousing, is leased. No facilities were
either closed or sold during fiscal year 1997. The Company
considers its manufacturing and warehousing facilities to be
adequate to support its business.
OFFICES AND TECHNICAL CENTER. The Company's general
office building is owned and is located in Oakland,
California. The Company's Technical Center and Data
Center are owned and are located in Pleasanton, California.
Leased sales and other office facilities are located at a
number of manufacturing and other locations.
ENCUMBRANCES. None of the Company's owned facilities are
encumbered to secure debt owed by the Company, except that
the manufacturing facilities in Wheeling, Illinois and
Belle, Missouri secure industrial revenue bond indebtedness
incurred in relation to the construction or upgrade thereof.
ITEM 3. LEGAL PROCEEDINGS
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
EXECUTIVE OFFICERS OF THE REGISTRANT
The names, ages and current positions of the executive
officers of the Company are set forth below:
Name (Age) and Year Elected to
Current Position Title and Current Position(s)
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G. C. Sullivan (57) 1992 Chairman of the Board, Chief Executive Officer
and President
W. F. Ausfahl (57) 1983 Group Vice President and Chief Financial Officer
E. A. Cutter (58) 1992 Senior Vice President-General Counsel
and Secretary
G. E. Johnston (50) 1996 Group Vice President
P. N. Louras, Jr. (47) 1992 Group Vice President
D. C. Murray (61) 1996 Group Vice President
C. T. Alcantara (47) 1996 Vice President-Latin America
A. W. Biebl (47) 1992 Vice President-Product Supply
R. H. Bolte (57) 1995 Vice President-Corporate Marketing Services
J. M. Brady (43) 1993 Vice President-Human Resources
R. T. Conti (42) 1996 Vice President-Kingsford Products
C. M. Couric (50) 1995 Vice President and General Manager-Brita Products
L. Griffey (61) 1993 Vice President-International Manufacturing
R. C. Klaus (52) 1996 Vice President-Corporate Administration
L. S. Peiros (42) 1995 Vice President-Food Products Division
K. M. Rose (48) 1993 Vice President-Treasurer
H. J. Salvo, Jr. (49) 1991 Vice President-Controller
B. A. Sudbury (50) 1992 Vice President-Research and Development
F. A. Tataseo (43) l994 Vice President-Sales
C. E. Williams (48) 1993 Vice President-Information Services
There is no family relationship between any of the above
named persons, or between any of such persons and any of
the directors of the Company or any persons nominated for
election as a director of the Company. See Item 10 of Part
III of this Form 10-K.
G. C. Sullivan, W. F. Ausfahl, E. A. Cutter, P. N. Louras,
Jr., L. Griffey, K. M. Rose, H. J. Salvo, and B. A. Sudbury
have been employed by the Company for at least the past
five years in the same respective positions as listed above.
The other executive officers have held the respective
positions described below for at least the past five years:
G. E. Johnston joined the Company in July 1981 as Regional
Sales Manager-Special Markets. Prior to his election as
Group Vice President effective July 1, 1996, he was Vice
President-Kingsford Products from November 17, 1993 through
June 1996, Vice President-Corporate Development from June
1992 through November 16, 1993, Director of Corporate
Development from 1991 through May 1992, and Director of
Business Development from September 1989 through 1991.
D. C. Murray joined the Company in February 1978 as Regional
Manager-Latin America and Asia. Prior to his election as
Group Vice President effective July 1, 1996, he was Vice
President-Household Products Division from April 1989
through June 30, 1996, Vice President-International from
November 1984 through April 1989, and Vice President-Latin
America and Asia from April 1982 through November 1984.
C. T. Alcantara joined the Company in 1992 as Area General
Manager-Latin America. Prior to his election as Vice
President-Latin America effective July 1, 1996, he left the
Company briefly from December 8, 1995 through March 31,
1996, when he returned as Area General Manager-Latin
America.
A. W. Biebl joined the Company in 1981 as Manufacturing
Manager, Food Service. Prior to his election as Vice
President-Manufacturing, Engineering and Distribution
effective June 1, 1992 (which title changed to Vice
President-Product Supply effective January 1997), he was
Vice President-Kingsford Products from 1989 through May
1992 and Vice President-Food Service Products from 1985
through 1989.
R. H. Bolte joined the Company in April 1982. Prior to
his election as Vice President-Corporate Marketing Services
in July 1995, he was Director of Advertising and Promotion
from June 1993 through June 1995 and Director of Media
Services from May 1982 through May 1993.
J. M. Brady joined the Company in 1976 as a brand assistant
in Marketing, Household Products. From November 1991 until
her election as Vice President-Human Resources in September
1993, she was Vice President-Corporate Marketing Services.
She was director of Corporate Marketing Services from August
1991 through November 1991, Director of Marketing, Kingsford
Products from 1989 through August 1991 and held various
marketing positions for Household Products and Kingsford
Products from 1987 through 1989.
R. T. Conti joined the Company in 1982 as Associate Region
Sales Manager, Household Products. Prior to his election
as Vice President-Kingsford Products effective July 1,
1996, he was Vice President-International from June 1992
through June 1996, Area General Manager-International for
Europe, Middle East and Africa from 1990 through May 1992
and Manager of Sales Planning for Household Products from
1987 through 1990.
C. M. Couric joined the Company in 1973 as a brand assistant
in the Household Products marketing organization. Prior to
his election in July 1995 as Vice President-Brita Products,
he had served as Director, Brita Operations from 1988
through June 1995 and as a Manager of Business Development
from 1984 through 1988.
R. C. Klaus joined the Company in 1977 as Regional Sales
Manager (Baltimore) for the Company's Household Products
Business. Prior to his election as Vice President-
Corporate Administration in November 1995, he was Vice
President-Clorox Professional Products from March 1994
through October 1995, and Vice President-Food Service
Products from May 1990 through March 1994.
L. S. Peiros joined the Company in 1982 and was elected
Vice President-Food Products Division effective July 1995.
From September 1993 until his election to his current
position he was Vice President-Corporate Marketing Services.
From June 1992 through August 1993 he was Director of
Marketing-Household Products and from August 1991 through
June 1992 he was Director of Marketing-Kingsford Products.
Prior to that he had served in various marketing positions
in both Household Products and Kingsford Products.
F. A. Tataseo joined the Company in October 1994 as Vice
President-Sales. Previously, he was employed by The
Pillsbury Company (Division of Grand Metropolitan Inc.)
as Vice President, Sales (March - September 1994), and as
Vice President, Direct Sales Force (June 1993 - February
1994); and by The Procter & Gamble Company as Sales
Merchandising Division Manager, Soap Sector (May 1992 -
May 1993); as Division Sales Manager, Laundry Products
Category (November 1990 - April 1993); and as Division
Sales Manager, Fabric Care Category (July 1988 - October
1990).
C. E. Williams joined the Company in May 1993 as Vice
President-Information Services. From 1987 until he joined
the Company, Mr. Williams was Director of Information
Services of the Fritz Companies, Inc.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTERS
(a) MARKET INFORMATION.
The principal markets for Clorox Common Stock are the New
York Stock Exchange and the Pacific Exchange. The high
and low sales prices quoted for New York Stock Exchange-
Composite Transactions Report for each quarterly period
during the past two fiscal years appears under "Quarterly
Data," page 38 of the Annual Report, incorporated herein
by this reference, and on July 31, 1997, the closing price
for the Company's stock was $69.906 per share.
(b) HOLDERS.
The approximate number of record holders of Clorox Common
Stock as of July 31, 1997 was 13,354 based on information
provided by the Company's transfer agent.
(c) DIVIDENDS.
The amount of quarterly dividends paid with respect to
Clorox Common Stock during the past two fiscal years appears
under "Quarterly Data," page 38 of the Annual Report,
incorporated herein by this reference.
ITEM 6. SELECTED FINANCIAL DATA
This information appears under "Financial Summary," pages
40 and 41 of the Annual Report, incorporated herein by
this reference.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATION
This information appears under "Management's Discussion
and Analysis," pages 22 and 23 of the Annual Report,
incorporated herein by this reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
This information appears under "Quantitative and Qualitative
Disclosures about Market Risk," page 39 of the Annual Report,
incorporated herein by this reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
These statements and data appear on pages 24 through 37
and 38 of the Annual Report, incorporated herein by
this reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM l0. DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT
Information regarding each nominee for election as a
director, including those who are executive officers of the
Company, appears under "Nominees for Election as Directors"
of the definitive Proxy Statement of the Company, which
will be filed with the United States Securities and
Exchange Commission within 120 days after the end of the
registrant's fiscal year ended June 30, 1997 ("Proxy
Statement"), incorporated herein by this reference.
Pursuant to Instruction 3 to Item 401(b) of Regulation
S-K, information regarding the executive officers of the
registrant is reported in Part I of this Report.
The information required by Item 405 of Regulation S-K
appears under "Section 16(a) Beneficial Ownership
Reporting Compliance" of the Proxy Statement, incorporated
herein by this reference.
ITEM 11. EXECUTIVE COMPENSATION
The information required by Item 402 of Regulation S-K appears
under "Organization of the Board of Directors," "Summary
Compensation Table," "Options and Stock Appreciation Rights,"
"Long-Term Incentive Plans -- Awards in Last Fiscal Year,"
"Comparative Stock Performance," "Compensation Interlocks and
Insider Participation," and "Pension Benefits" of the Proxy
Statement, all incorporated herein by this reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT
(a) SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS.
Information concerning the only entity or person known to
the Company to be the beneficial owner of more than 5% of
its Common Stock appears under "Beneficial Ownership of
Voting Securities" of the Proxy Statement, incorporated
herein by this reference.
(b) SECURITY OWNERSHIP OF MANAGEMENT.
Information concerning the beneficial ownership of the
Company's Common Stock by each nominee for election as a
director and by all directors and executive officers as
a group appears under "Beneficial Ownership of Voting
Securities" of the Proxy Statement, incorporated herein
by this reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Information concerning transactions with directors,
nominees for election as directors, management and the
beneficial owner of more than 5% of the Company's Common
Stock appears under "Certain Relationships and
Transactions" of the Proxy Statement, incorporated herein
by this reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS
ON FORM 8-K
(a)(1) Financial Statements: Page
Financial Statements and Independent Copy
Auditors' Report Included
included in the Annual Report,
incorporated herein by this
reference:
Statements of Consolidated Earnings for
the years ended June 30, 1997, l996 and
l995
Consolidated Balance Sheets, June 30, 1997
and l996
Statements of Consolidated Stockholders'
Equity for the years ended June 30, 1997,
l996 and l995
Statements of Consolidated Cash Flows for
the years ended June 30, 1997, l996 and l995
Notes to Consolidated Financial Statements
Independent Auditors' Report
Quarterly Data
(2) Financial Statement Schedules have been omitted
because of the absence of conditions
under which they are required, or because the
information is shown elsewhere in this Form 10-K.
(3) Executive Compensation Plans and Arrangements:
Stock Option Plan (1977), amended 10/16/80, 7/21/82,
6/21/83, 10/19/83, 9/18/85, 11/20/85, 7/15/87
and 11/17/93 (Exhibit 10(i) to Annual Report on
Form 10-K for the year ended June 30, 1994)
Long-Term Compensation Program dated October 21, 1987,
amended 11/17/93 (Exhibit 10(ii) to Annual Report on
Form 10-K for the year ended June 30, 1994)
Officer Employment Agreement (form) (Exhibit 10(xi)
to the Annual Report on Form 10-K for the year ended
June 30, 1996)
Officer Change of Control Employment Agreement (form)
(Exhibit 10(xii) to the Annual Report on Form 10-K
for the year ended June 30, 1996)
Supplemental Executive Retirement Plan dated July 17,
1991 (Exhibit 10(x) to Annual Report on Form 10-K
for the year ended June 30, 1993)
Non-Qualified Deferred Compensation Plan (Exhibit 10
(xiii) to the Annual Report on Form 10-K for the year
ended June 30, 1996)
The Clorox Company 1995 Performance Unit Plan
(Exhibit 10(xiv) to the Annual Report on Form 10-K
for the year ended June 30, 1996)
The Clorox Company 1996 Stock Incentive Plan (Exhibit
10(xv) to the Annual Report on Form 10-K for the year
ended June 30, 1996)
The Clorox Company 1996 Executive Incentive
Compensation Plan (Exhibit 10(xvi) to the Annual
Report on Form 10-K for the year ended June 30, 1996)
The Clorox Company Value Sharing Plan, formerly The
Clorox Company Tax Reduction Investment Plan (Exhibit
4.3 to Amendment No. 2 dated July 12, 1996 to
Registration Statement on Form S-8 No. 33-41131 dated
June 10, 1991)
The Clorox Company Value Sharing Plan for Puerto Rico
(Exhibit 4 to Registration Statement on Form S-8 No.
333-16969 dated November 27, 1996)
The Clorox Company Independent Directors' Stock-Based
Compensation Plan (filed as Exhibit 10 (xix) to this
Annual Report on Form 10-K for the year ended June
30, 1997)
(b) Current Reports on Form 8-K during the fourth quarter
of fiscal year 1997:
None.
(c) Exhibits:
Index to Exhibits follows.
(d) (Not applicable)
Index to Exhibits
(2) (Not applicable)
(3)(i) Restated Certificate of Incorporation and Certificate
of Correction to Restated Certificate of Incorporation
of the Registrant (filed as Exhibit 4.1 to
Registration Statement on Form S-8 No. 333-16969 dated
November 27, 1996, incorporated herein by this
reference)
(ii) Bylaws (restated) of the Company (filed as Exhibit
3(ii) to Quarterly Report on Form 10-Q for the
quarter ended December 31, 1992, incorporated herein
by this reference)
(4)(i) Form of Indenture between the Company and Wachovia
Bank & Trust Company, N.A. as Trustee, regarding
$200,000,000 in 8.8% Notes due 2001 (filed as Exhibit
4 to Registration Statement on Form S-3 No. 33-4083
dated May 24, 1991, incorporated herein by this
reference)
(ii) Prospectus Supplement (to Prospectus dated July 9,
1991) giving terms of the Indenture referenced in
Exhibit 4 (i) above (filed on July 18, 1991,
supplementing the Registration Statement on Form S-3
No. 33-4083 dated May 24, 1991, and incorporated
herein by this reference)
(9) (Not applicable)
(10) Material contracts:
(i) Stock Option Plan (1977) (Amended l0/l6/80, 7/2l/82,
6/2l/83, l0/l9/83, 9/18/85, 11/20/85, 7/15/87 and
11/17/93) (filed as Exhibit 10(i) to Annual Report on
Form 10-K for the year ended June 30, 1994,
incorporated herein by this reference)
(ii) Long-Term Compensation Program dated October 21, 1987
(Amended 11/17/93) (filed as Exhibit 10(ii) to Annual
Report on Form 10-K for the year ended June 30, 1994,
incorporated herein by this reference)
(iii) Agreement between Henkel KGaA and the Company dated
June l8, l981 (filed as Exhibit (l0)(v) to Form 8
dated August 11, l983, incorporated herein by this
reference)
(iv) Agreement between Henkel GmbH (now Henkel KGaA) and
the Company dated July 3l, l974 (filed as Exhibit
(l0)(vi) to Form 8 dated August 11, l983, incorporated
herein by this reference)
(v) Agreement between Henkel KGaA and the Company dated
November l6, 1981 (filed as Exhibit (l0)(vii) to Form
8 dated August 11, l983, incorporated herein by this
reference)
(vi) Agreement between Henkel KGaA and the Company dated
July 16, 1986 (filed as Exhibit B to Current Report
on Form 8-K for March 19, 1987, incorporated herein
by this reference)
(vii) Agreement between Henkel KGaA and the Company dated
March 18, 1987 (filed as Exhibit A to Current Report
on Form 8-K for March 19, 1987, incorporated herein
by this reference)
(viii) Agreement between Henkel KGaA and the Company dated
January 16, 1992 (filed as Exhibit 10(xi) to Annual
Report on Form 10-K for the year ended June 30, 1992,
incorporated herein by this reference)
(ix) Supplemental Executive Retirement Plan dated July 17,
1991 (filed as Exhibit 10(x) to Annual Report on Form
10-K for the year ended June 30, 1993, incorporated
herein by this reference)
(x) 1993 Directors' Stock Option Plan dated November 17,
1993 (filed as Exhibit 10(xi) to Annual Report on Form
10-K for the year ended June 30, 1994, incorporated
herein by this reference)
(xi) Officer Employment Agreement (form) (filed as Exhibit
10(xi) to the Annual Report on Form 10-K for the year
ended June 30, 1996, incorporated herein by this
reference)
(xii) Officer Change of Control Employment Agreement (form)
(filed as Exhibit 10(xii) to the Annual Report on Form
10-K for the year ended June 30, 1996, incorporated
herein by this reference)
(xiii) Non-Qualified Deferred Compensation Plan (filed as
Exhibit 10(xiii) to the Annual Report on Form 10-K
for the year ended June 30, 1996, incorporated herein
by this reference)
(xiv) The Clorox Company 1995 Performance Unit Plan (filed
as Exhibit 10(xiv) to the Annual Report on Form 10-K
for the year ended June 30, 1996, incorporated herein
by this reference)
(xv) The Clorox Company 1996 Stock Incentive Plan (filed as
Exhibit 10(xv) to the Annual Report on Form 10-K for
the year ended June 30, 1996, incorporated herein by
this reference)
(xvi) The Clorox Company 1996 Executive Incentive
Compensation Plan (filed as Exhibit 10(xvi) to the
Annual Report on Form 10-K for the year ended June 30,
1996, incorporated herein by this reference)
(xvii) The Clorox Company Value Sharing Plan, formerly The
Clorox Company Tax Reduction Sharing Plan (Exhibit 4.3
to Amendment No. 2 dated July 12, 1996 to Registration
Statement on Form S-8 No. 33-41131 dated June 10, 1991,
incorporated herein by this reference)
(xviii) The Clorox Company Value Sharing Plan for Puerto Rico
(Exhibit 4 to Registration Statement on Form S-8 No.
333-16969 dated November 27, 1996, incorporated herein
by this reference)
(xix) The Clorox Company Independent Directors' Stock-Based
Compensation Plan
(11) (Not applicable)
(12) (Not applicable)
(13) Excerpt of 1997 Annual Report to Stockholders
(16) (Not applicable)
(l8) (Not applicable)
(21) Subsidiaries of the Company
(22) (Not applicable)
(23) Independent Auditors' Consent
(24) Power of Attorney (see page 17)
(27) Financial Data Schedule
SIGNATURES
Pursuant to the requirements of Section l3 or l5(d) of the
Securities Exchange Act of l934, the registrant has duly
caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
THE CLOROX COMPANY
Date: September 17, 1997 By: /s/G. C. Sullivan
-------------------
G. C. Sullivan, Chairman of
the Board and Chief Executive
Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose
signature appears below constitutes and appoints Edward A.
Cutter and Henry J. Salvo, Jr., jointly and severally,
attorneys-in-fact and agents, with full power of substitution,
for her or him in any and all capacities to sign any and all
amendments to this Form 10-K, and to file the same and all
exhibits thereto, and other documents in connection therewith,
with the Securities and Exchange Commission, hereby ratifying
and confirming all that each of said attorneys-in-fact and
agents, and his or their substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act
of l934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and
on the dates indicated.
Signature Title Date
/s/G.C. Sullivan
- ------------------
G. C. Sullivan Chairman of the Board & September 17, 1997
Director (Chief Executive Officer)
/s/W. F. Ausfahl
- ------------------
W. F. Ausfahl Group Vice President & Director September 17, 1997
(Principal Financial Officer)
/s/D. Boggan, Jr.
- ------------------
D. Boggan, Jr. Director September 17, 1997
/s/J. W. Collins
- ------------------
J. W. Collins Director September 17, 1997
/s/U. Fairchild
- ------------------
U. Fairchild Director September 17, 1997
/s/J. Manchot
- ------------------
J. Manchot Director September 17, 1997
/s/D. O. Morton
- ------------------
D. O. Morton Director September 17, 1997
/s/K. Morwind
- ------------------
K. Morwind Director September 17, 1997
/s/E. L. Scarff
- ------------------
E. L. Scarff Director September 17, 1997
/s/L. R. Scott
- ------------------
L. R. Scott Director September 17, 1997
/s/F. N. Shumway
- -----------------
F. N. Shumway Director September 17, 1997
/s/J. A. Vohs
- -----------------
J. A. Vohs Director September 17, 1997
/s/C. A. Wolfe
- -----------------
C. A. Wolfe Director September 17, 1997
/s/H. J. Salvo, Jr.
- -------------------
H. J. Salvo, Jr. Vice President-Controller(Principal September 17, 1997
Accounting Officer)