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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, 1996
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
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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, 1998: $10,620,440,671.
Number of shares of common stock outstanding at July 31,
1998: 103,684,744.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the registrant's Annual Report to Stockholders
for the Year Ended June 30, 1998 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 18, 1998, 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, 1998, 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, 1998 ("Annual Report") to its stockholders are
incorporated herein by specific reference.
During fiscal year 1998, the Company continued to focus
on expanding its domestic business, through internal
development of new products and line extensions of existing
products, and on the completion of the integration of the
"Armor All" business purchased in fiscal year 1997. The
Company introduced 13 new products in the United States
during fiscal year 1998, including "Clorox 2" bleach-free
laundry booster, "Tilex Fresh Shower" daily shower cleaner
and Lemon Fresh "Formula 409" all-purpose cleaner.
Internationally, the Company continued implementing its
strategy to expand 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 six international
acquisitions in fiscal year 1998. Three of the acquisitions
were in Brazil, consisting of the "Clorosul" brand of
liquid bleach, the "Super Globo" brand of bleach and
cleaners, and the "X-14" brand of cleaners. Also, household
cleaner businesses were purchased in Southeast Asia and
Chile and an insecticide business was purchased in Australia.
In addition, the Company introduced 28 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, on pages 34 through 47 of the Annual Report,
incorporated herein by this reference.
(c) NARRATIVE DESCRIPTION OF BUSINESS.
PRINCIPAL PRODUCTS. Products currently marketed in the
United States and certain foreign countries are listed on
pages 25 through 29 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 1998. 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 portions of the operations of the
Company that 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 1998,
1997 and 1996, revenues from the Company's sales of
its products to Wal-Mart Stores, Inc. and its affiliated
companies were 16%, 15% and 14%, 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 competitive product, the Company's
products compete 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 $56,005,000, $50,489,000
and $45,821,000 in fiscal years 1998, 1997 and 1996, respectively,
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 1998 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 that
may arise in the future.
(ii) In April 1992, 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) In July 1995, an explosion attributed to
methane caused property damage and personal injury in a
residential area near a site formerly operated by a
predecessor of a subsidiary of the Company in Kingsford,
Michigan. In October 1996, The Company was named
as a PRP and jointly with another PRP is investigating the
area. The Company's investigation of the area is ongoing
and the Company's potential liability is not expected to
be material in the future.
(iv) In June 1995, Armor All Products Corporation,
subsequently acquired by 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.
(v) In July 1997, the Company was served with a
Notice of Violation ("NOV") by the Environmental Protection
Agency pursuant to the Clean Air Act for a site operated by
its subsidiary in Beryl, West Virginia. In March 1998,
the Environmental Protection Agency filed suit based on the
NOV and alleged prior Clean Air Act violations, the majority
of which had been resolved between the Company's subsidiary
and the State of West Virginia in March 1997. 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.
(vi) In September 1997, the Company was served with an
NOV by the Environmental Protection Agency pursuant to the Clean
Air Act for a site in Chicago, Illinois; and in August
1998, the Company was served with an NOV by the Missouri
Department of Natural Resources pursuant to the Missouri
Air Pollution Control Program for a site in Belle, Missouri.
Based on the Company's experience, the Company does not
expect that either of these matters 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 1998,
approximately 6,600 persons were employed by the Company.
FORWARD-LOOKING STATEMENTS AND RISK FACTORS. Except for
historical information, matters discussed in this Form 10-K,
including statements about future growth, are forward-looking
statements based on management's estimates, assumptions and
projections. 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, acquisitions, 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,
without limitation, those discussed elsewhere in this Form 10-K,
marketplace conditions and events, 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 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, which were 18% of net sales in fiscal
year 1998, 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 in the United States and
internationally. 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 the United States and
internationally. 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 that 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 Regulations. The manufacture, packaging,
storage, distribution and labeling of the Company's
products and the Company's business operations generally
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 that regulate in parallel to these
federal agencies. The failure to comply with applicable laws
and regulations in these or other areas 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 (excluding Puerto Rico and exports)
were 17%, 7% and 29%, respectively, for fiscal year 1998.
See Note 16 of Notes to Consolidated Financial Statements,
on page 46 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 29 locations
internationally. Most of the space is owned. Some space,
mainly for warehousing, is leased. The Company also leases
six domestic regional distribution centers for the Company's
products which are operated by service providers. None of
the Company's facilities were either closed or sold during
fiscal year 1998 except for the sale of an idle site
previously operated by a subsidiary in Elk Grove, California.
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 facility in Belle, Missouri, secures
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 (58) 1992 Chairman of the Board, Chief Executive
Officer and President
P. D. Bewley (52) 1998 Senior Vice President - General Counsel
and Secretary
G. E. Johnston (51) 1996 Group Vice President
P. N. Louras, Jr. (48) 1992 Group Vice President
K. M. Rose (50) 1997 Group Vice President - Finance and Chief
Financial Officer
C. T. Alcantara (48) 1998 Vice President - Worldwide Business
Development
A. W. Biebl (49) 1992 Vice President - Product Supply
R. H. Bolte (58) 1995 Vice President - Corporate Marketing
Services
J. M. Brady (44) 1993 Vice President - Human Resources
R. T. Conti (43) 1996 Vice President - Kingsford Products
C. M. Couric (52) 1995 Vice President - Brita Products
S. D. House (37) 1997 Vice President - Treasurer
R. C. Klaus (53) 1995 Vice President - Corporate Administration
L. S. Peiros (43) 1998 Vice President - Household Products
H. J. Salvo, Jr. (50) 1991 Vice President - Controller
G. R. Savage (42) 1997 Vice President - Food Products
D. G. Simpson (44) 1997 Vice President - Strategy and Planning
K. R. Tandowsky (41) 1998 Vice President - Information Services
F. A. Tataseo (44) l994 Vice President - Sales
S. A. Weiss (42) 1998 Vice President - Asia Middle East
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, P. N. Louras, Jr., A. W. Biebl, J. M. Brady
and H .J. Salvo 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:
P. D. Bewley joined the Company in February 1998 as Senior Vice
President-General Counsel and Secretary. From 1994 through
January 1998, he was employed by Nova Care, Inc., as Senior Vice
President-General Counsel and Secretary, and prior to that was
employed by Johnson & Johnson as Associate General Counsel.
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.
K. M. Rose joined the Company in 1978 as a Financial Analyst.
Prior to her election as Group Vice President-Finance and
Chief Financial Officer effective December 1, 1997, she was
Vice President-Treasurer from July 1992 through November 1997
and Controller, Household Products from July 1988 through
July 1992.
C. T. Alcantara joined the Company in 1992 as Area General
Manager-Latin America. Prior to his election as Vice President-
Worldwide Business Development effective June 1, 1998, he was
Vice President-Latin America from July 1, 1996 though May 1998.
He left the Company briefly from December 8, 1995 through
March 31, 1996.
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.
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.
S. D. House joined the Company in 1983 as a staff accountant,
and was elected Vice President-Treasurer effective December 1,
1997. Prior to that, he had served as Director of Finance for
the international business and also had held various positions
in auditing, financial analysis and forecasting.
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-Household Products effective June 1, 1998. Prior
to that, he had served as Vice President-Food Products from
July 1995 until election to his current position, and from
September 1993 until July 1995 he served as 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.
G. R. Savage joined the Company in 1983 as an Associate
Marketing Manager, and was elected Vice President-Food
Products effective December 1, 1997. Prior to that, he
had served as Director of Marketing for the household products
business from 1993.
D. G. Simpson joined the Company in 1979 in the brand
management function, and was elected Vice President-Strategy
and Planning effective December 1, 1997. Prior to that, he
had served as head of corporate strategic planning.
K. R. Tandowsky joined the Company in 1981 as a staff accountant
and was elected Vice President-Information Services effective
February 7, 1998. Prior to that, he had served as Director
of Finance for the Kingsford products business from 1994 and
Director of Corporate Finance, Treasury from 1992.
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).
S. A. Weiss joined the Company in 1994 as an area general
manager for the Pacific Rim business, and held the position
of Area General Manager Asia-Middle East before being elected
Vice President-Asia Middle East effective June 1, 1998.
Prior to that, he had been employed by Bristol Myers Squibb
in international and domestic marketing assignments.
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," on page 48 of the Annual Report,
incorporated herein by this reference, and on July 31,
1998, the closing price for the Company's stock was $102.75
per share.
(b) HOLDERS.
The approximate number of record holders of Clorox Common
Stock as of July 31, 1998 was 13,752 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," on page 48 of the Annual Report,
incorporated herein by this reference.
ITEM 6. SELECTED FINANCIAL DATA
This information appears under "Five-Year Financial Summary,"
on page 49 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,"on pages 31 through 34 of the Annual Report,
incorporated herein by this reference.
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
MARKET RISK
This information appears under "Market-Sensitive Derivatives
and Financial Instruments" in the "Management's Discussion
and Analysis," on pages 32-33 of the Annual Report, incorporated
herein by this reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
These statements and data appear on pages 34 through 48 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, 1998 ("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,"
"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 Auditors' Copy
Report included in the Annual Report, incorporated Included
herein by this reference:
Statements of Consolidated Earnings for the years
ended June 30, 1998, l997 and l996
Consolidated Balance Sheets, June 30, 1998 and l997
Statements of Consolidated Stockholders' Equity for
the years ended June 30, 1998, l997 and l996
Statements of Consolidated Cash Flows for the years
ended June 30, 1998, l997 and l996
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:
Long-Term Compensation Program dated October 21,
1987, amended 11/17/93 (Exhibit 10(ii) to the
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 the 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 (Exhibit 10 (xix) to the
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 1998:
None.
(c) Exhibits:
Index to Exhibits follows.
(d) (Not applicable)
Index to Exhibits
(3) (i) Restated Certificate of Incorporation (filed as
Exhibit 4.1 to Registration Statement on Form S-8
No. 333-44675 dated January 22, 1998, incorporated herein
by this reference)
(ii) Bylaws (restated) of the Company (filed as Exhibit 3(ii)
to this Annual Report on Form 10-K for the year ended
June 30, 1998)
(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)
(10) Material contracts:
(i) Long-Term Compensation Program dated October 21, 1987
(Amended 11/17/93) (filed as Exhibit 10(ii) to the
Annual Report on Form 10-K for the year ended June 30,
1994, incorporated herein by this reference)
(ii) 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)
(iii) 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)
(iv) 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)
(v) 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)
(vi) 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)
(vii) Agreement between Henkel KGaA and the Company dated
January 16, 1992 (filed as Exhibit 10(xi) to the
Annual Report on Form 10-K for the year ended June 30,
1992, incorporated herein by this reference)
(viii) Supplemental Executive Retirement Plan dated July 17,
1991 (filed as Exhibit 10(x) to the Annual Report on
Form 10-K for the year ended June 30, 1993, incorporated
herein by this reference)
(ix) 1993 Directors' Stock Option Plan dated November 17,
1993 (filed as Exhibit 10(xi) to the Annual
Report on Form 10-K for the year ended
June 30, 1994, incorporated herein by this
reference)
(x) 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)
(xi) 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)
(xii) 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)
(xiii) 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)
(xiv) 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)
(xv) 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)
(xvi) 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, incorporated herein by this
reference)
(xvii) 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)
(xviii) The Clorox Company Independent Directors'
Stock-Based Compensation Plan (filed as
Exhibit 10 (xix) to the Annual Report on Form
10-K for the year ended June 30, 1997, incorporated
herein by this reference)
(13) Excerpts of 1998 Annual Report to Stockholders
(21) Subsidiaries of the Company
(23) Independent Auditors' Consent
(24) Power of Attorney (see pages 16-17)
(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 16, 1998 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
Peter D. Bewley, Karen M. Rose, 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 Chairman of the Board & Director September 16, 1998
G. C. Sullivan (Chief Executive Officer)
/s/D. Boggan, Jr. Director September 16, 1998
D. Boggan, Jr.
/s/J. W. Collins Director September 16, 1998
J. W. Collins
/s/U. Fairchild Director September 16, 1998
U. Fairchild
/s/T. M. Friedman Director September 16, 1998
T. M. Friedman
/s/J. Manch Director September 16, 1998
J. Manchot
/s/D. O. Morton Director September 16, 1998
D. O. Morton
- ----------------- Director September 16, 1998
/s/K. Morwind
/s/E. L. Scarff Director September 16, 1998
E. L. Scarff
/s/L. R. Scott Director September 16, 1998
L. R. Scott
/s/J. A. Vohs Director September 16, 1998
J. A. Vohs
/s/C. A. Wolfe Director September 16, 1998
C. A. Wolfe
/s/K. M. Rose Group Vice President - Finance September 16, 1998
K. M. Rose and Chief Financial Officer
(Principal Financial Officer)
/s/H. J. Salvo, Jr. Vice President-Controller September 16, 1998
H. J. Salvo, Jr. (Principal Accounting Officer)