SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act ofPROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(Amendment No.(AMENDMENT NO. )
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[_] Definitive Additional Materials
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ARMOR ALL PRODUCTS CORPORATION
- --------------------------------------------------------------------------------Armor All Products Corporation
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------Armor All Products Corporation
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
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Notes:
[LOGO OF ARMOR ALL]ALL APPEARS HERE]
ARMOR ALL PRODUCTS CORPORATION
6 LIBERTY
ALISO VIEJO, CA 92656
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD JULY 31, 199526, 1996
The Annual Meeting of Stockholders of Armor All Products Corporation, a
Delaware corporation (hereinafter called "Armor All" or the "Corporation"),
will be held at 10:00 A.M. on Monday,Friday, July 31, 199526, 1996 in the Lobby Level
Conference Room at 44 Montgomery Street, San Francisco, California 94104, to
consider and take action upon the following matters:
1. election of seven directors,directors;
2. a proposal to amend the Corporation's 1986 Stock Option Plan;
and such other business as may properly come before the meeting or any
adjournment thereof.
Holders of record of the Corporation's Common Stock at the close of business
on June 1, 19953, 1996 are entitled to receive notice of and to vote at the meeting.
To assure that your shares will be represented at the meeting, please
complete, sign, date and return the enclosed proxy promptly in the envelope
provided. You may revoke your proxy at any time before it is voted.
By Order of the Board of Directors
/s/ NANCYNancy A. MILLERMiller
Nancy A. Miller
Vice President and Secretary
June 21, 199518, 1996
ARMOR ALL PRODUCTS CORPORATION
6 LIBERTY
ALISO VIEJO, CA 92656
PROXY STATEMENT
This Proxy Statement is being mailed on or about June 21, 199518, 1996 to
stockholders of Armor All Products Corporation ("Armor All" or the
"Corporation") in connection with the solicitation of proxies by the Board of
Directors of the Corporation for use at the Annual Meeting of Stockholders to
be held on July 31, 1995,26, 1996, and at any adjournment thereof, pursuant to the
accompanying Notice of Meeting. Shares represented by a properly executed
proxy received by the Corporation in time to permit its use at the meeting
will be voted as indicated on the proxy. Stockholders may revoke the authority
granted by their proxies at any time before the exercise of the powers
conferred thereby by notice in writing delivered to the Secretary of the
Corporation; by submitting a subsequently dated proxy; or by attending the
meeting, withdrawing the proxy, and voting in person.
It is proposed that at the meeting action will be taken upon the election of
seven directors to hold office formatters set
forth in the ensuing year.accompanying Notice and described in this Proxy Statement. The
Board of Directors knows of no other business to come before the meeting. If
any other business should properly come before the meeting, the persons named
on the enclosed proxy will have discretionary authority to vote thereon in
accordance with their best judgment.
The cost of soliciting proxies will be borne by the Corporation. In addition
to solicitations by mail, officers and regular employees of the Corporation
may solicit proxies personally or by telephone, telegraph or other means
without additional compensation. Arrangements will also be made with banks,
brokerage houses and other custodians, nominees and fiduciaries to forward
solicitation material to the beneficial owners of stock held of record by such
persons, and the Corporation will, upon request, reimburse them for their
reasonable expenses in so doing.
At the close of business on June 1, 1995,3, 1996, there were outstanding and
entitled to vote at the meeting 21,274,63521,331,222 shares of Common Stock. Each share
of stock outstanding on such date entitles the stockholder of record to one
vote on all matters submitted at the meeting. The presence in person or by
proxy of stockholders entitled to cast a majority of all the votes entitled to
be cast will constitute a quorum for the transaction of business at the
meeting. Abstentions and broker non-votes will be counted for purposes of
determining the presence or absence of a quorum. If a quorum is present, a
plurality of the votes cast at the meeting is required for the election of
directors. Any other
matter submittedApproval of the proposal to stockholders for approval wouldamend the Corporation's 1986 Stock
Option Plan will require the affirmative vote of a majority of the aggregate
number of shares present in person or by proxy at the meeting and entitled to
vote on the matter. Thus, an abstention haswill have the same practical effect as
a negative vote, but a broker non-vote has no effect.
Participants in the Corporation's Profit-Sharing Investment Plan are
entitled to instruct the Plan trustee, on a confidential basis, how to vote
all shares of Armor All Common Stock allocated to their accounts under the
Plan and will receive a separate voting instruction card for that purpose. All
shares as to which the trustee receives no voting instructions from
participants will be voted by the trustee in the same proportion as shares as
to which instructions are received.
1
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
The following table sets forth information as of June 1, 1995,3, 1996, with respect
to the only persons known by the Corporation to be the beneficial owners of
more than five percent of its outstanding Common Stock, which is the
Corporation's only class of voting securities.
AMOUNT AND NATURE
NAME AND ADDRESS OF BENEFICIAL PERCENT
OF BENEFICIAL OWNER OWNERSHIP OF CLASS
------------------- --------------------------------- --------
McKesson Corporation........................... 11,624,900(1) 54.611,624,900 54.5
One Post Street Sole voting and
San Francisco, CA 94104 investment power
Ariel Capital Management, Inc.................. 2,093,379(2) 9.8
307 North Michigan Ave.
Chicago, IL 60601David L. Babson & Co., Inc..................... 1,193,700(1) 5.6
One Memorial Drive
Cambridge, MA 02142
RCM Capital Management......................... 1,625,700(3) 7.61,674,000(2) 7.8
Four Embarcadero Center
Suite 3000
San Francisco, CA 94111
Travelers Group Inc............................ 1,233,070(3) 5.8
388 Greenwich Street
New York, NY 10013
- --------
(1) In November 1994, Eli Lilly and Company acquired what was formerly the
Corporation's majority stockholder, McKesson Corporation,This information is based on a Delaware
corporation, and renamed it PCS Holding Corporation. Immediately prior to
consummation of this transaction, the former McKesson Corporation
distributed to its stockholders all of the common stock of a newly created
Delaware corporation, SP Ventures, Inc., since renamed McKesson
Corporation. This new company holds all of the former McKesson
Corporation's assets, businesses and stock interests, including its
majority interest in the Corporation, other than the pharmaceutical
benefits management business, which has been retained by PCS Holding
Corporation. In connectionSchedule 13G filed with the spin-off, the new McKesson Corporation
has becomeSecurities and
Exchange Commission, reporting that as of December 31, 1995, David L.
Babson & Co., Inc., a co-obligor on the former McKesson Corporation's 4 1/2%
Exchangeable Subordinated Debentures due 2004 (the "Debentures"),registered investment adviser, had sole voting power
as to 546,750 shares, shared voting power as to 646,950 shares, and has
assumed responsibility for satisfying PCS Holding Corporation's obligations
thereunder, including its obligationsole
dispositive power as to deliver shares of the Corporation's
Common Stock or cash in lieu thereof upon an exchange of Debentures.1,193,700 shares.
(2) This information is based on an amendment to a Schedule 13G filed with the
Securities and Exchange Commission reporting that as of December 31, 1994,
Ariel Capital Management, Inc., a registered investment adviser, had sole
voting power as to 1,451,729 shares, shared voting power as to 129,900
shares, and sole dispositive power as to 2,093,379 shares.
(3) This information is based upon information received fromby RCM Capital Management ("RCM"), on
its own behalf and that of its general partner, RCM Limited L.P., and RCM
Limited L.P.'s general partner, RCM General Corporation, reporting that as
of MarchDecember 31, 1995, RCM, a registered investment adviser, had sole
voting power as to 1,341,700 shares, no voting power as
to 284,0001,502,000 shares, shared dispositive power as to 22,00027,000
shares, and sole dispositive power as to 1,603,7001,647,000 shares.
(3) This information is based on a Schedule 13G filed with the Securities and
Exchange Commission, reporting that as of December 31, 1995, Travelers
Group Inc., a parent holding company, had shared voting and dispositive
power as to all 1,233,070 shares.
McKesson Corporation ("McKesson") intends to vote its shares in favor of the
nominees for election to the Board of Directors listed herein.herein and for approval
of the proposed amendments to the Corporation's 1986 Stock Option Plan as
described in this Proxy Statement. Since the holders of Common Stock do not
have cumulative voting rights and since McKesson's shares represent more than
50% of the outstanding shares of
2
Common Stock entitled to be voted at the meeting, McKesson will be able to
elect the entire Board of Directors.
2
Directors and approve the proposed amendments to the
1986 Stock Option Plan.
SECURITY OWNERSHIP OF DIRECTORS AND OFFICERS
The following table indicates as to each director and each of the executive
officers named in the Summary Compensation Table who were employed by the
Corporation on March 31, 19951996 and as to all directors and officers as a group,
the number of shares and percentage of the Corporation's Common Stock
beneficially owned as of June 1, 1995:3, 1996:
AMOUNT AND NATURE
OF BENEFICIAL
NAME OWNERSHIP(1)
---- -----------------
William A. Armstrong................................... -0-
Jon S. Cartwright...................................... 6,000(2)
Kenneth M. Evans....................................... 110,961(2)131,417(2)(3)
David L. Mahoney....................................... -0-
David E. McDowell...................................... -0-
Karen Gordon Mills..................................... 5,000(2)6,000(2)
Alan Seelenfreund...................................... -0-
Michael A. Caron....................................... 44,250(2)52,013(2)(3)
Steven L. Kliff........................................ 20,505(2)Michael G. McCafferty.................................. 3,000(3)
Donald N. Weinberger................................... 32,739(2)(3)
All Directors and Officers as a Group
(17) persons..... 365,556(2)(13 persons).......................................... 261,953(2)(3)
- --------
(1) Unless otherwise indicated, the nature of beneficial ownership for all
shares is sole voting and investment power (or with voting and investment
power shared with a spouse). The shares represent less than 1% of the
outstanding shares for every person, and 1.7%1.2% for all directors and
officers as a group.
(2) Includes shares that may be acquired within 60 days after June 1, 19953, 1996
through the exercise of stock options granted under the Corporation's 1986
Stock Option Plan, as follows: Mr. Evans, 71,250;90,000; Mr. Caron, 28,501;34,938; Mr.
Kliff, 11,376;Weinberger, 23,600; Mr. Cartwright, 5,000; Ms. Mills, 5,000; and all
directors and officers as a group, 247,403.179,338.
(3) Includes shares held under the Corporation's Profit-Sharing Investment
Plan and as to which the participant has sole voting but no investment
power, as follows: Mr. Evans, 1,118;1,297; Mr. Caron, 2,498;2,677; Mr. Kliff, 129;Weinberger,
1,555; and all directors and officers as a group, 11,081; 36,5757,331; 33,050 shares
subject to possible forfeiture granted to Mr. Evans, 8,600 to Mr. Caron,
9,0003,000 to Mr. Kliff,McCafferty, 5,400 to Mr. Weinberger, and 84,97555,050 shares to all
directors and officers as a group under the Corporation's 1988 Restricted
Stock Plan; 500 shares as to which a member
of the group disclaims beneficial ownership; and 5001,000 shares held in a family trust by a member of the group,
as to which the holder and his spouse have shared voting and investment
power.power, and 200 shares held by a member of the group as joint trustee for
his minor children, as to which shares he disclaims beneficial ownership.
3
ELECTION OF DIRECTORS
It is the intention of the persons named in the enclosed form of proxy,
unless authorization to do so is withheld, to vote for the election of the
seven nominees named below, to serve as directors until the next annual
meeting of stockholders and until their successors shall have been elected and
qualified. If any nominee should be unavailable for election, an event which
is not presently anticipated, the proxies will be voted for the election of
such other person or persons as shall be determined by the persons named in
the enclosed form of proxy in accordance with their judgment, or the number of
authorized directors may be reduced.
Following is information concerning the nominees for election at the
meeting. Each nominee has consented to being named in this Proxy Statement and
to serve if elected. All nominees are currently serving as directors and were
elected by the stockholders at the 19941995 Annual Meeting. Ages shown are as of
June 1, 1995.
3, 1996.
WILLIAM A. ARMSTRONG
Age 53.55. Vice President Human Resources and Administration of McKesson since
April 1, 1993; Vice President Administration from January 1992 to April 1993;
Vice President from July 1991 until January 1992; Executive Assistant to the
Office of the Chief Executive from April 1990 until January 1992. Mr.
Armstrong has been a director of the Corporation since 1991 and is a member of
the Compensation Committee.
JON S. CARTWRIGHT
Age 58. Professor59. Director Emeritus and Senior Adviser of the Center for
Telecommunications Management ("CTM"), a research, education and Organization ofpublishing
center affiliated with the University of Southern California ("USC") Graduate
School of Business Administration, since January 1995;1995. Executive Director of
the Center for Telecommunications Management, a
nonprofit research and education center affiliated with the USC Graduate School
of Business Administration,CTM from January 1990 to January 1995; Associate
Professor from January 1990 to June 1992, and Professor of Management and
Organization at the USC Graduate School of Business Administration from
JuneJanuary 1992 to January 1995.1995, and Associate Professor from January 1990 to
January 1992. Mr. Cartwright has been a director of the Corporation since 1993
and is Chairman of the Audit Committee and a member of the Compensation
Committee.
KENNETH M. EVANS
Age 53.54. President and Chief Executive Officer since April 1991. Group Vice-
President of the Do-it-Yourself Products Group of L. & F. Products, a
subsidiary of Eastman Kodak, from 1989 to April 1991. Mr. Evans has beenand a director of the
Corporation since April 1991. HeMr. Evans is also a director of the O'Brien
Corporation.
DAVID L. MAHONEY
Age 40.41. Vice President of McKesson since 1990, and President of its
Pharmaceutical Services Group since February 1996. Formerly he was President
of McKesson's Healthcare Delivery Systems, Inc. subsidiary sincefrom September 1994;1994
until December 1995, and served as Vice President Strategic Planning of
McKesson from July 1990 to September 1994;
formerly a Principal (from 1987 to 1990) of McKinsey & Company, an
international management consulting firm.1994. Mr. Mahoney has been a director of
the Corporation since 1992.
DAVID E. MCDOWELL
Age 52.53. Chairman of the Board since April 1992. Employed as a Senior Adviser
to McKesson Corporation since May 20, 1996; formerly he was President, and Chief
Operating Officer and a director of McKesson sincefrom January 1992.1992 until he
resigned effective May 20, 1996. Vice President and General Manager, Quality
and Chief Information Officer of International Business Machines Corporation
("IBM")(IBM) from November 1990 until January 1992; President of IBM's National
Service Division from July 1987 until November 1990. He is also a director of
Medaphis Corporation. Mr. McDowell has been a director of the Corporation
since 1992 and is Chairman of the Compensation Committee and a member of the
Audit Committee.
He is also a
director of McKesson.4
KAREN GORDON MILLS
Age 41.42. President of MMP Group, Inc., a management company providing
consulting and investment banking services, since 1993; Managing Director and
Chief Operating Officer, Industrial Group, E. S. Jacobs & Company, from 1983
to 1993. Director of Triangle Pacific Corp., Arrow Electronics, Inc., Telex
Communications, Inc., and The Scotts Company. Ms. Mills has been a director of
the Corporation since 1994 and is a member of the Audit Committee.
4
ALAN SEELENFREUND
Age 58.59. Chairman of the Board and Chief Executive Officer of McKesson since
November 1989.Mr. Seelenfreund has been a director of the Corporation since
1986.1989. He is also a director of McKesson and Pacific Gas and Electric
Company. Mr. Seelenfreund has been a director of the Corporation since 1986.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Under the federal securities laws, the Corporation's Directors, its
executive officers and any persons holding (as defined in the rules and
regulations of the Securities and Exchange Commission) more than ten percent
of the Corporation's Common Stock are required to report their initial
ownership of the Corporation's Common Stock and any subsequent changes in that
ownership to the Securities and Exchange Commission (the "Commission"), the
NASDAQ Stock Market and the Corporation. For fiscal year 1995,1996, these filing
requirements were satisfied.satisfied, except that one director, Jon S. Cartwright,
inadvertently failed to report the transfer of his directly-owned shares to a
family trust on Form 5 for fiscal year 1995, but subsequently reported this
transaction on a Form 5 for fiscal year 1996. In making this disclosure, the
Corporation has relied solely on written representations of its Directors and
executive officers and its ten percent holders and/or copies of the reports
that they have filed with the Commission.
COMMITTEES AND MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors has designated two standing committees--an Audit
Committee and a Compensation Committee. The members of each standing committee
are appointed by the Board of Directors and serve a term coexistent with that
of the Board that appointed such committee.
The Audit Committee, composed of three directors, held two meetings during
the year ended March 31, 1995.1996. The Audit Committee recommends to the Board the
retention or discharge of the Corporation's independent auditors and reviews
the scope, extent and procedures of the audit and the fees to be paid
therefor. The Committee also reviews the audit results, and approves the
audited financial statements and recommends to the Board their inclusion in
the annual report to stockholders; consults with the independent auditors, the
internal auditors and management on the adequacy of internal accounting
controls; and performs such other functions as may be necessary in the
efficient discharge of its duties.
The Compensation Committee, composed of three directors, held fourfive meetings
during the year ended March 31, 1995.1996. The Compensation Committee serves as the
administrative committee for the Corporation's stock option plan, restricted
stock plan, deferred compensation plan, and all other incentive plans; reviews
and makes recommendations to the Board with respect to the salary and other
terms and conditions of employment of the Chief Executive Officer and approves
salaries and other terms and conditions of employment of all other
5
officers and of other employees of the Corporation above specified salary
grades, and examines and makes recommendations to the Board regarding the
Corporation's overall compensation program for managerial level employees.
The Board of Directors held six meetings during the year ended March 31,
1995.1996. Attendance at Board and Committee meetings combined averaged
approximately 96%94%. Each director, except for Mr. Seelenfreund, attended more
than 75% of the combined total meetings of the Board and Committees of the
Board on which the director served at any time during the year.
The Board of Directors will consider nominees for director recommended by
stockholders. Any stockholder who wishes to recommend a nominee should submit
the recommendation in writing to the Vice President and Corporate Secretary of
the Corporation, c/o McKesson Corporation, One Post Street, San Francisco, CA
94104.
5
COMPENSATION OF DIRECTORS
During the fiscal year ended March 31, 1995,1996, each director who was not an
employee of the Corporation or of McKesson received an annual retainer of
$12,000,$15,000, payable quarterly; a stipend of $750$1,000 for each Board or Committee
meeting attended; and reimbursement for all expenses incurred in attending
such meetings. Directors who are employees of the Corporation or of McKesson
receive no additional compensation for their services as members of the Board
or any Board committee. In addition, the nonemployee directors also receive
nonqualified stock options under the provisions of the 1986 Stock Option Plan,
which provide that each nonemployee director, on the date of the Annual
Meeting of Stockholders at which he or she is first elected to the Board, is
to receive an option to purchase 5,000 shares of Common Stock, which is
immediately exercisable in full but expires in five equal annual installments.
On the date of each subsequent annual meeting, each continuing nonemployee
director automatically receives an option to purchase an additional 1,000
shares, which is immediately exercisable in full. Subject to the above-mentionedabove-
mentioned expiration provisions, the term of each option is five years.
Under the Corporation's Deferred Compensation Administration Plan (the
"DCAP"), any director entitled to compensation for services as a director may
make an irrevocable election to defer receipt of all or a portion of his or
her annual retainer and meeting fees, (but not less than $5,000), until such
person ceases to be a director or attains age 65, whichever is later, or at
such other time as is specified by the director, after which payments are made
in any number of approximately equal annual installments over such period of
years, not exceeding fifteen, as is elected by the director. In the event of a
change in control of the Corporation (as defined in the DCAP) deferred funds
shall be distributed immediately upon the effective date of the change. One
director currently participates in the DCAP.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
David E. McDowell, Chairman of the Compensation Committee, is President and
Chief Operating Officer andemployed by
McKesson as a Director of McKesson,Senior Adviser, and William A. Armstrong, a member of the
Committee, is Vice President Human Resources and Administration of McKesson.
The third member of the Committee, Jon S. Cartwright, is an independent
outside director. (See the discussion of Certain Relationships and Related
Transactions on page 16.15.)
6
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE COMPENSATION
The Corporation's executive compensation program is administered by the
Compensation Committee (the "Committee") of the Board of Directors. The
Committee is composed of three directors. Two are officersOne of the members is an employee of
McKesson, one is an officer of McKesson and onethe third is an independent
outside director. The Committee is responsible for administering the
Corporation's stock option and restricted stock plans, reviewing and making
recommendations to the full Board with respect to the salary, incentive
compensation and other terms and conditions of employment of the Chief
Executive Officer and approving salaries, incentive compensation and other
terms and conditions of employment of the other executive officers named in
the Summary Compensation Table (the "executive officers") and other officers
and key employees of the Corporation in and above specified salary grade
levels.
The following report was prepared by the members of the Committee (whose
names appear at the end of the report) to provide the Corporation's
stockholders with an explanation of Armor All's compensation policies, and the
criteria used in designing compensation programs and setting compensation
levels for the executive officers, and specifically, the compensation of the
Chief Executive Officer during fiscal year 1995.
6
1996.
In its deliberations concerning compensation of executive officers, the
Committee considers the following factors: (1) the Corporation's performance
in comparison with previously set objectives and against the prior year's
achievement, (2) the individual performance of each executive officer, (3) a
number of comparative compensation surveys, which are supplied by professional
compensation consultants approved by the Committee and retained by the
Corporation for this purpose, and other material concerning compensation
levels and stock grants at similar companies, such as compensation information
disclosed in the proxy statements of other companies, (4) the overall
competitive environment for executives and the level of compensation needed to
attract and retain executive talent, and (5) the recommendations of
professional compensation consultants. Companies used in comparative analyses
for executive compensation purposes are selected with the assistance of these
professional compensation consultants. Such companies represent a broad cross-
section of consumer product companies and are selected based on a variety of
factors including similarity in financial attributes, size and complexity to
the Corporation. The companies used in comparative analyses for executive
compensation purposes include some of the companies in the Peer Group Index
used in the Performance Graph, as well as other companies. The Committee
relies on a broad array of companies in various industries for comparative
analysis of executive compensation because it believes that the Corporation's
competitors for executive talent are more varied than the companies included
in the Peer Group Index chosen for comparing stockholder return in the
Performance Graph.
The Corporation's compensation program is designed to enhance stockholder
value by linking a large part of the executives' compensation directly to
performance. The objective is to provide base salary for executives at
approximately the 60th percentile for executives at similar companies, while
providing an opportunity to achieve total compensation (including base salary,
annual bonus and long-term incentives) at the 75th percentile or above for
exceptional performance.
COMPONENTS OF COMPENSATIONComponents of Compensation
The Corporation's compensation package consists of base salary, a short-term
incentive plan, and long-term incentives (stock and cash). Base pay is
reviewed annually. Actual base salary is based on individual performance,
competitive pay practices and level of responsibility. Competitive pay
practices are determined through job evaluation and market comparisons. The
fiscal year 19951996 salaries of executive officers were
7
determined primarily on the basis of each executive officer's performance and
responsibility, the Corporation's performance, and competitive salary level
market data. Increases in fiscal year 19951996 salaries reflected the Committee's
determination that compensation levels should be increased to remain
competitive, given each executive officer's performance, the Corporation's
performance in fiscal year 19951996 and the competitive environment for executive
talent.
The Short-Term Incentive Plan ("STIP") rewards participants for reaching
profit targets related to required rates of return. For fiscal year 1995,1996, the
measures included goals for pre-tax income at specified levels of investment.
Individual executives' target values vary by level of responsibility, are set
as a percentage of base salary and are competitive with those paid to
executive officers at companies in the comparison group. The annual incentive
award an executive officer is eligible to receive can range from zero to three
times the incentive award percentage assigned to his or her position. ActualSTIP
awards were not paid to the executive officers for fiscal year 1995 depended on1996, because
the degree to whichCompany's financial performance was below the Corporation achieved its target income objectives andtargets set forth in the
extent to which the
executive officer was judged to have contributed to the overall results.plan.
The Corporation has three executive compensation plans to help achieve long-
term performance objectives. The three plans are the Stock Option Plan, the
Restricted Stock Plan and the Long-Term Incentive
7
Plan ("LTIP"). One-third of
competitive long-term incentive value is intended to be provided by stock
options, one-third by restricted stock and one-third by the cash LTIP. The
LTIP provides cash awards based solely on the Corporation's results over
three-year periods. Goals for this plan are set annually for the successive
three-year period. These goals are designed to focus an executive officer's
attention on long-term growth balanced with return to stockholders. The
measures of financial performance currently in use for the LTIP are profit
before tax in excess of a specified percentage return on assets employed. The LTIP
awards were not paid to the executive officers for the three-year period ended
March 31, 1995 reflected1996, because the Corporation's achievement of 113% ofCompany's financial performance was below the
minimum targets required for payout under the plan. No further performance
periods remain open under the LTIP targets. Although the
Corporation plans to discontinue the LTIP, it was amended bywhich has been discontinued as an element
of compensation for executive officers.
In March 1996, the Board of Directors on December 1, 1994 to provideestablished an incentive plan for
a one-time incentive period
beginning April 1, 1993 and ending on March 31, 1996 and providing that 50%strategic business unit managers, including the named executive officers,
except for Mr. Weinberger, for fiscal year 1997 ("FY1997 Incentive Plan"). The
FY1997 Incentive Plan provides for performance awards payable in cash upon
achievement of predetermined earnings per share targets for fiscal year 1997.
Payment of the target award shallcash awards, if earned, will be paid in cashtwo equal
installments--50% at the end of fiscal year 1997 and that 50% shall be an awardat the end of restricted stock.fiscal
year 1998.
The Corporation's 1986 Stock Option Plan is designed to strengthen the link
between the interests of shareholdersstockholders and management. Stock options are
generally granted annually and provide executives a ten-year period, subject
to specified vesting requirements, to purchase shares of Common Stock at the
full market price of the stock on the day the option is granted. Annual grants
are generally equal to the target percent of pay described above modified by
performance. In addition, the Committee considers the size of prior grants,
but does not take into account the number of options currently held by an
executive officer in determining annual award levels. The number of options
needed to provide the target percent of pay is determined by use of a modified
Black-
ScholesBlack-Scholes model for valuing stock options.
The Corporation's 1988 Restricted Stock Plan was established to provide
strong incentive for highly qualified executives to remain with the
Corporation as well as to strengthen their link to shareholdersstockholders through
increased stock ownership. Grants of restricted stock are considered annually.
The current general practice is for restrictions to lapse only if performance
goals are met during a four-year period. The measure used to determine if
restrictions will lapse on the performance-based shares awarded in fiscal year
19951996 will be the compounded increase in profit before tax over a four-year
period.
8
The Corporation has not yet adopted a policy regarding the recently enacted
$1 million annual limitation on the federal income tax deductibility of
compensation paid to any executive officer. However, it has been determined
that the new limitations did not impact the Corporation in fiscal year 1995.1996.
At the present time, there are no executive officers whose compensation meets
or exceeds the $1 million annual limit nor is it expected that an executive
officer will reach this limit in fiscal year 1996.1997. The Committee's present
intention is to comply with the requirements of Section 162(m) unless the
Committee concludes that required changes would not be in the best interests
of the Corporation or its stockholders.
COMPENSATION OF THE PRESIDENT AND CHIEF EXECUTIVE OFFICERCompensation of the President and Chief Executive Officer
During fiscal year 1995,1996, the Committee reviewed the performance of the
President and CEO, Kenneth M. Evans, and made recommendations to the Board
concerning his base salary and STIP award and approved his stock option and
restricted stock awards using the same criteria that were used to determine
salaries and incentive compensation levelsawards for the executive officers discussed at the beginning of this report.
Mr. Evans' compensation for fiscal year 19951996 is shown in the Summary
Compensation Table on page 12.
The Corporation's performance in fiscal year11.
On April 1, 1995, reflected strong
improvement over the prior year and against aggressive performance goals that
had been set. The Corporation's international business exceeded performance
targetsCommittee, with increased revenues and profits over fiscal year 1994. Domestic
business exceeded its goal in revenues, while an aggressive goal of profit
before tax was only partially attained. The Corporation's
8
sharethe concurrence of the U.S. Automotive Appearance products marketfull Board,
increased to 36%, as
revenues increased at twice the rate of industry growth. Customer acceptance of
four new products exceeded expectations. Three of these products were developed
and marketed by the Home Care Division, establishing a platform for future
growth in the Home Care industry. During fiscal year 1995, Mr. Evans' annual salary was determinedfrom $300,000 to $312,000 based on the
Corporation's performance for fiscal year 1995 and competitive market data on
salary levels. The Committee increasedGiven the Corporation's disappointing operating results in
fiscal year 1996, Mr. Evans, at his request, did not receive a salary from $285,000 to
$300,000, effective April 1, 1994. His STIP award represented 36% of his annual
compensation and reflectedincrease
at the difficulty in the attainmentend of the year. Additionally, since the profit targets established
under the STIP and the performance goals setestablished under the LTIP for the
Corporation during the yearrespective one-year and his success in achieving those goals.
He also received an LTIP award for the three-year period endingincentive periods ended March 31, 1995
based upon the Corporation's exceeding performance targets during the period.1996 were
not met, no awards were paid to Mr. Evans under either plan in fiscal year
1996.
The stock option award forto Mr. Evans made in January 1996 was based on the
Committee's assessment of his overall performance during a difficult year and
on the Committee's philosophy that stock ownership by management aligns
management's interests more closely with those of the Corporation's
shareholders. He also received astockholders. The restrictions imposed on the restricted stock grant of 5,500
sharesaward granted
to Mr. Evans in fiscal year 1995. The restrictions on these sharesJanuary 1996 will lapse in fiscal year 1999 dependent upon the achievement of stretch goals in2000 only if specific
performance objectives for compound growth in profit before tax.tax are met.
It is the Committee's view that the total compensation package for Mr. Evans
was based on an appropriate balance of (1) the Corporation's performance, (2)
his ownindividual performance, and (3) competitive practice.
The Compensation Committee
David E. McDowell, Chairman
William A. Armstrong
Jon S. Cartwright
9
PERFORMANCE GRAPHSGRAPH
Set forth below is a line graph comparing the performance of the
Corporation's Common Stock during the period April 1, 19901991 through March 31,
19951996 with the NASDAQ Stock Market Index, and a peer group composed of the
following eighteenseventeen consumer products companies: Alberto-Culver Company, Church
& Dwight Co., Inc., Eljer Industries, Inc., First Brands Corporation, Kimball
International, Inc., Lancaster Colony Corporation, La-Z-Boy Chair Company,
National Presto Industries, Inc., NCH Corporation, Oneida Ltd., Pratt &
Lambert, Inc., Royal Appliance
Mfg. Co., RPM, Inc., The Scotts Company, Stanhome Inc., The Valspar
Corporation, WD-40 Company, and Wynn's International, Inc. The Corporation is
not included in the peer group. Neutragena Corporation,Pratt & Lambert, Inc., formerly a member of the
peer group, has been removed because it is no longer a publicly-held company.
Total Return Indices reflect reinvested dividends and are weighted on a market
capitalization basis at the time of each reported data point. The stock price
performance depicted in the performance graphs shown below is not necessarily
indicative of future price performance.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
AMONG ARMOR ALL PRODUCTS, NASDAQ COMPOSITE AND PEER GROUP
PERFORMANCE GRAPHFive-Year Cumulative Total Return*
[GRAPH APPEARS HEREHERE]
Measurement Period ARMOR ALL NASDAQ
(Fiscal Year Covered) PRODUCTS COMPOSITE Peer GroupFiscals Years
1991 1992 1993 1994 1995 1996
- --------------------- ---------- --------- ----------------------------------------------------------------------------------------
Measurement Pt- 03/31/90 $100.00 $100.00 $100.00
FYE 03/31/91 $ 77.72 $114.21 $121.34
FYE 03/31/92 $ 86.58 $145.58 $143.69
FYE 03/31/93 $141.39 $167.28 $149.49
FYE 03/31/94 $148.49 $180.59 $153.20
FYE 03/31/95 $157.11 $185.32 $152.72
* Assumes $100 invested in Armor All Common Stock and in each index on March 31,
1990 and that all dividends are reinvested.
10
The Corporation has been under the direction of its current President and CEO
since April 15, 1991, and as the graph below demonstrates, the Corporation's
Common Stock has outperformed the broad NASDAQ Stock Market Index and its peer
group since April 1, 1992.
COMPARISON OF FOUR-YEAR CUMULATIVE TOTAL RETURN*
AMONG ARMOR ALL PRODUCTS, NASDAQ COMPOSITE AND PEER GROUP
PERFORMANCE GRAPH APPEARS HERE
Measurement Period ARMOR ALL NASDAQ
(Fiscal Year Covered) PRODUCTS COMPOSITE Peer Group
- --------------------- ---------- --------- ----------
Measurement Pt- 03/31/91Armor All $100.00 $111.40 $181.94 $191.07 $220.08 $173.91
NASDAQ Composite $100.00 $127.45 $146.51 $158.15 $175.93 $238.88
Peer Group $100.00 FYE 03/31/92 $111.40 $127.47 $118.42
FYE 03/31/93 $181.92 $146.47 $123.20
FYE 03/31/94 $191.06 $158.13 $126.26
FYE 03/31/95 $202.15 $162.27 $125.86$118.49 $123.26 $126.24 $128.51 $150.60
- ------------------------------------------------------------------------------
- --------
* Assumes $100 invested in Armor All Common Stock and in each index on March
31, 1991 and that all dividends are reinvested.
1110
SUMMARY COMPENSATION TABLE
The following table sets forth information concerning the compensation for services in all
capacities to the Corporation for the three fiscal years ended March 31, 1993,
1994,
1995 and 19951996 of those persons who were at March 31, 1995 the Chief Executive Officer, and each of the only other two individuals who served asfour most
highly compensated executive officers of the Corporation as of March 31, 1995, and an executive officer whose employment
terminated prior to March 31, 1995.in fiscal year 1996.
LONG-TERM COMPENSATION
----------------------------
ANNUAL COMPENSATION AWARDS PAYOUTS
------------------------------------------------------------------ ------------------- --------
RESTRICTED
OTHER ANNUAL STOCK LTIP ALL OTHER
NAME AND PRINCIPAL COMPENSATION AWARDS OPTIONS/ PAYOUTS COMPENSATION
POSITION(1) YEAR SALARY ($SALARY($) BONUS ($BONUS($) ($)(2) ($)(3) SARS (#)SARS(#) ($) ($)(4)
------------------ ---- ---------- --------- -------- ------------ ---------- -------- -------- ------------
Kenneth M. Evans, 1995 $300,000 $170,000 -- $118,250 20,0001996 $312,000 $ 91,5300 $35,428(5) $ 42,37481,875 15,000 $ 0 $13,646
President and 1995 300,000 170,000 -- 118,250 20,000 91,530 50,154
CEO 1994 285,000 290,000 -- 347,900 15,000 112,500 32,508
CEO 1993 269,167 330,000Michael G. McCafferty, 1996 134,615 0 -- 175,000 30,00049,125 35,000 0 28,8580
Executive Vice President
and Chief Financial
Officer(6)
Michael A. Caron, 1996 177,500 0 -- 32,750 6,500 0 10,298
Senior Vice President 1995 169,000 47,000 -- 43,000 7,000 44,800 29,467
Senior Vice37,247
and President of Armor 1994 163,600 54,000 -- 43,050 3,000 56,900 21,332
President and 1993 158,600 84,500 -- 43,750 8,250 50,200 18,518
President of Armor
All International
Donald N. Weinberger, 1996 151,000 0 -- 0 0 0 9,268
Vice President
Operations(6)
Steven L. Kliff, 1996 165,212 0 -- 0 0 0 4,685
Senior Vice President 1995 175,000 47,000 -- 43,000 6,500 41,000 21,633
Senior Vice29,413
Consumer Products(6) 1994 158,250 70,000 -- 61,500 5,000 0 9,368
President
Consumer
Products(5)
Mervyn J. 1995 185,500(6) (6) -- 0 0 (6) 352,202(6)
McCulloch, 1994 179,000 72,000 -- 61,500 5,000 60,100 23,268
Executive Vice President 1993 170,000 125,000 -- 52,500 13,200 52,500 20,223
and Chief Financial
Officer(6)
- --------
(1) Mr. McDowell, who serves as Chairman of the Board of the Corporation,
receives no compensation from the Corporation.
(2) The aggregate amountExcept as noted in the footnotes below, the dollar value of perquisites
and other personal benefits paid tofor each of the named executive officers forofficer during fiscal
year 1995 did not exceed
the lesser of 10% of such officer's total annual salary and bonus or
$50,000, and such amounts are not included in the table.1996 was less than established reporting thresholds.
(3) All shares awarded in fiscal years 19951996 and 19931995 were performance-based
and the restrictions will lapse at the end of fiscal years 19992000 and 1997,1999,
respectively, if the Corporation meets specified financial goals. Of the
restricted shares awarded in fiscal year 1994, 12,500 shares awarded to
Mr. Evans, will beare being released in annual increments of 25% beginning one
year after the date of the award, provided that Mr. Evans is stillremains in the
employ of the Corporation on the dates on which the restrictions lapse.
The remaining restricted shares awarded in fiscal year 1994 were
performance-
basedperformance-based and will be released at the end of fiscal year 1998 if
the Corporation attains a specified goal of compounded growth in profit
before tax for the four-year period fiscal year 1995 through fiscal yearending on March 31, 1998. Dividends
are paid on the shares at the same rate as paid to all other stockholders.
The 1988 Restricted Stock Plan provides that, in the event of a change in
control of the Corporation or of McKesson (as defined in the plan), all
restrictions on outstanding restricted stock grants shall immediately
lapse. As of March 31, 1995,1996, the number of shares of restricted stock
outstanding to each named executive officer and the market value 12
of the
shares (based upon the closing stock price of $16.375
11
on Friday, March 29, 1996), respectively, were as follows: Mr. Evans,
36,57533,050 and $786,363;$541,194; Mr. McCafferty, 3,000 and $49,125; Mr. Caron, 8,600
and $184,900;$140,825; Mr. Kliff, 9,000Weinberger, 5,400 and $193,500;$88,425; and Mr. McCulloch,Kliff, 0 and $0.
(4) For fiscal year 1995,1996, includes the aggregate value of (i) the
Corporation's matching stock contributions under the Profit-Sharing
Investment Plan ("PSIP"), a plan designed to qualify as an employee stock
ownership plan under the Internal Revenue Code (the "Code"), allocated to
the accounts of the named executive officers, as follows: Mr. Evans,
$5,004;$1,800; Mr. Caron, $4,949;$1,800; and Mr. Kliff, $2,537;Weinberger, $1,800; (ii) employer
matching cash contributions under the Supplemental PSIP, an unfunded,
nonqualified plan established because of limitations on annual
contributions to the PSIP contained in the Code, as follows: Mr. Evans,
$18,191;$4,794; Mr. Caron, $4,010;$908; and Mr. McCulloch,
$5,481;Weinberger, $780; (iii) stock
contributions and a special cash allocation resulting
from the PCS transaction made by McKesson Corporation to the named executives' ESOP accounts
under the McKesson PSIP, as follows: Mr. Evans, $19,178;$7,052; Mr. Caron, $19,343;$7,120;
Mr. Weinberger, $6,688; and Mr. Kliff, $19,096; and Mr. McCulloch,
$10,590;$4,685; and (iv) above-market
interest accrued on deferred compensation for Mr. Caron in the amount of
$1,165.$470.
(5) Includes $13,618 imputed interest on the loan to Mr. KliffEvans described under
"Indebtedness of Executive Officers" on page 15.
(6) Mr. McCafferty's employment with the Corporation commenced on September
11, 1995; Mr. Weinberger became an executive officer on August 17, 1993.
(6)September 1, 1995;
and Mr. McCulloch'sKliff's employment with the Corporation terminated on January 31,
1995. In connection therewith, the Corporation and Mr. McCulloch entered
into an agreement whereby his salary was continued for a period of three
months, and the Corporation agreed to pay him the cash sums of (i)
$210,000, payable in installments over a period of one year, a portion of
which is subject to offset by income received from any subsequent employer,
(ii) approximately $118,000 in lieu of awards otherwise payable pursuant to
the Corporation's annual and long-term incentive plans for fiscal year
1995, and (iii) $8,131 in accrued vacation pay, which amounts are included
in the table. 2,000 shares of restricted stock which vested on February 21,
1995 were distributed to Mr. McCulloch, and he received the right to
exercise all of his vested stock options until that date. The agreement
also contains standard provisions such as a release of claims, continuing
confidentiality obligations, and restrictions on Mr. McCulloch's ability to
engage in activities in competition with the Corporation for a specified
period of time.1996.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
GRANT DATE
INDIVIDUAL GRANTS VALUE
-------------------------------------------- ----------------
% OF TOTAL
OPTIONS
GRANTED TO EXERCISE
EMPLOYEES OR BASE
OPTIONS/SARS IN FISCAL PRICE EXPIRATION GRANT DATE
NAME GRANTED(#)(1) YEAR ($/SH) DATE PRESENT VALUE(2)
---- ------------- ---------- -------- ---------- ----------------
Kenneth M. Evans........ 20,000 11.25 $21.5015,000 7.16 $16.00 1/26/23/06 $ 60,720
Michael G. McCafferty... 25,000 11.93 17.50 9/20/05 $134,376110,688
10,000 4.77 16.00 1/23/06 40,480
Michael A. Caron........ 7,000 3.94 21.506,500 3.10 16.00 1/26/05 47,03223/06 26,312
Donald N. Weinberger.... -0- -0- -0- -0- -0-
Steven L. Kliff......... 6,500 3.66 21.50 1/26/05 43,672
Mervyn J. McCulloch..... -0- -0- -0- -0- -0-
- --------
(1) During fiscal year 1995,1996, options to purchase an aggregate of 183,800211,500
shares were granted to 7759 optionees at option prices ranging from $19.75$16.00
to $22.25$19.25 with a weighted average option price of $21.40.$16.48. All options
granted to employees are for ten-year terms and are granted at fair market
value and exercisable in installments of 25% per year beginning one year
after the date of grant, except that the grant of 25,000 shares to Mr.
McCafferty on September 20, 1995, at the exercise price of $17.50 per
share, vests in full on the first anniversary of the date of grant.
Optionees may satisfy the exercise price by submitting currently owned
shares and/or cash. Income tax withholding obligations may be satisfied by
electing to have the Corporation withhold shares otherwise issuable under
the option
13
with a fair market value equal to such obligations. The
Corporation has not granted any stock appreciation rights.
(2) In accordance with Securities and Exchange Commission rules, a modified
Black-Scholes option pricing model was chosen to estimate the grant date
present value of 31.25%25.3% for the options set forth in this table. The
assumptions used in calculating the reported value include: stock
volatility, 32.97%35.09%; interest rate, 7.78%5.65%; annual dividend, $0.64;$.64; exercise
period, 10 years; reductions of approximately 9.61% to reflect the
12
probability of forfeiture due to termination prior to vesting, and
approximately 12.98%10.37% to reflect the probability of a shortened option term
due to termination of employment prior to the option expiration date. The
Corporation does not believe that the Black-Scholes model, or any other
model, can accurately determine the value of an option. Accordingly, there
is no assurance that the value realized by an executive, if any, will be at
or near the value estimated by the Black-Scholes model. Future compensation
resulting from option grants is based solely on the performance of the
Corporation's stock price.
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION VALUES
NUMBER OF UNEXERCISED VALUE OF UNEXERCISED
SHARES NUMBER OF UNEXERCISEDOPTIONS AT FISCAL YEAR- IN-THE-MONEY OPTIONS AT
ACQUIRED OPTIONS AT FISCAL YEAR-END(#)END (#) FISCAL YEAR-END ($)(1)
ON VALUE ------------------------------------------------------- -------------------------
NAME EXERCISE REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------- -------- ----------- ------------- ----------- -------------
Kenneth M. Evans........ 5,000 $46,875 58,750 61,250 $491,875 $232,500-0- $ -0- 90,000 45,000 $305,000 $5,625
Michael G. McCafferty... -0- -0- -0- 35,000 -0- 3,750
Michael A. Caron........ 8,500 80,813 28,501 15,249 199,276 39,481-0- -0- 34,938 15,312 86,581 2,438
Donald N. Weinberger.... 2,825 16,306 23,600 6,875 10,781 -0-
Steven L. Kliff......... -0- -0- 11,376 17,374 72,879 42,934
Mervyn J. McCulloch..... 17,600 141,80618,563 -0- -0- -0-34,125 -0-
- --------
(1) Options are "in-the-money" if on March 31, 1995Calculated based upon the fair market value share price of $16.375 on
Friday, March 29, 1996, less the Common Stock ($21.50) exceeded the exerciseshare price of such options. The
value of such options is calculated by determining the difference between
the aggregate market price of the Common Stock covered by the options on
March 31, 1995 and the aggregate exercise price of such options.
LONG-TERM INCENTIVE PLAN AWARDS IN THE LAST FISCAL YEAR
ESTIMATED FUTURE PAYOUTS
UNDER
NON-STOCK PRICE BASED
PLANS(1)
------------------------
PERFORMANCE OR OTHER
PERIOD UNTIL MATURATION THRESHOLD TARGET MAXIMUM
NAME OR PAYOUT ($) ($) ($)
---- ----------------------- --------- ------ -------
Kenneth M. Evans........ 3 years 52,500 75,000 112,500
Michael A. Caron........ 3 years 23,660 33,800 50,700
Steven L. Kliff......... 3 years 24,500 35,000 52,500
- --------
(1) The table above represents potential payouts of awards, if earned, upon
completion of the three-year incentive period ending March 31, 1996. These
awards are tied to profit before tax plus amortization expense in excess of
a specified percentage return on assets employed. Target amounts will be
earned if the goal for return on assets employed is achieved; threshold
amounts are earned at 80% of target, and maximum amounts at 121% of target.
If earned, 50% of the target awards at the time of distribution will be paid in cashon exercise. There
is no guarantee that if and 50% shall be in the form of an award of restricted stock.
Restrictions on the awards shall lapse at the rate of one-third of the
shares on each of the first three anniversaries of the date of the awards.
14
when these options are exercised they will
have this value.
EMPLOYMENT CONTRACTS AND TERMINATION
OF EMPLOYMENT AND CHANGE IN CONTROL ARRANGEMENTS
The Corporation does not have employment agreements with its executive
officers. However, as ofAprilof April 1, 1994 it entered into termination agreements
with Messrs. Evans Kliff and McCullochKliff providing for payment of severance benefits upon
their termination of employment following a "change in control" of the
Corporation (defined in the agreements as the occurrence of certain specified
events). Mr. McCulloch'sKliff's agreement was cancelled when his employment terminated on
January 31, 1995. The other two agreements,1996. Mr. Evans' agreement, which will remain in effect until
terminated by the Compensation Committee (or by the Board of Directors, in the case of Mr. Evans' agreement), provideprovides for the payment of benefits
upon a change in control of the Corporation or of McKesson and actual or
constructive termination of employment within two years of such change. In the
event of termination of employment under the agreements,agreement, the Corporation shall
pay to the executive as severance pay in a cash lump sum an amount equal to
2.99 times his "severance pay base", subject to adjustment as described below.
"Severance pay base" means the executive's "base amount" determined under
Section 280G of the Internal Revenue Code. The amount of severance benefits
paid shall be no higher than the amount that is not subject to disallowance of
deduction under Section 280G of the Internal Revenue Code. Accrual of service
for Mr. Evans would continue under the McKesson Executive Benefit Retirement
Plan and he would continue to participate in the McKesson Executive Medical
Plan and Executive Survivor Benefits Plan for a minimum of twelve months, plus
one month for each year of service with a maximum benefit of twenty-four
months.
For purposes of the termination agreements, a "change in control" is
generally deemed to occur if (a) any person (as defined in the Securities
Exchange Act of 1934, as amended) excluding the Corporation or any of its
subsidiaries, a trustee or any fiduciary holding securities under an employee
benefit plan of the Corporation or any of its subsidiaries, an underwriter
temporarily holding securities pursuant to an offering of such securities or a
corporation owned, directly or indirectly, by stockholders of the Corporation
in substantially the same proportions as their ownership of the Corporation,
is or becomes the "beneficial owner" (as defined in
13
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of
the Corporation representing 30% or more of the combined voting power of the
Corporation's then outstanding securities; or (b) during any period of not
more than two consecutive years, individuals who at the beginning of such
period constitute the Board and any new director (other than a director
designated by a person who has entered into an agreement with the Corporation
to effect a transaction described in clause (a), (c) or (d) of this paragraph)
whose election by the Board or nomination for election by the Corporation's
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority thereof; or (c) the
shareholders of the Corporation approve a merger or consolidation of the
Corporation with any other corporation, other than (i) a merger or
consolidation which would result in the voting securities of the Corporation
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity), in combination with the ownership of any trustee or other
fiduciary holding securities under an employee benefit plan of the
Corporation, at least 50% of the combined voting power of the voting
securities of the Corporation or such surviving entity outstanding immediately
after such merger or consolidation, or (ii) a merger or consolidation effected
to implement a recapitalization of the Corporation (or similar transaction) in
which no person acquires more than 50% of the combined voting power of the
Corporation's then outstanding securities; or (d) the shareholders of the
Corporation approve a plan of complete liquidation of the Corporation or an
agreement for the sale or disposition by the Corporation of all or
substantially all of the Corporation's assets.
On April 1, 1996 the Corporation entered into a settlement agreement with
Mr. Kliff, in connection with the termination of his employment (the
"Agreement"), whereby it agreed to pay to Mr. Kliff the cash sums of (i)
$350,000 in settlement of certain claims, and (ii) $5,563 in reimbursement for
the cost of six months of premiums on an HMO medical/group health insurance
policy. The Agreement also provides for the extension until June 30, 1996 of
the period within which Mr. Kliff may exercise all stock options which were
exercisable on the date his employment terminated, and the waiver by the
Corporation of $11,095 in interest on his outstanding loan (see "Indebtedness
of Executive Officers" on page 15). The Agreement also contains standard
provisions such as a mutual release of claims, continuing confidentiality
obligations as to the terms of the Agreement, except as required by law, and
protection of proprietary information.
RETIREMENT PLAN
Employees of the Corporation participate in the McKesson Corporation
Retirement Plan (the "McKesson Plan"). The costs of participation in the
McKesson Plan are paid by the Corporation.
The table below illustrates, as of March 31, 1995,1996, the estimated annual
benefits payable upon retirement at age 65 under the McKesson Plan in the
specified compensation and years-of-service classifications. The benefits are
computed as single life annuity amounts.
FIVE YEAR YEARS OF SERVICE
AVERAGE -------------------------------
COMPENSATION 15 20 25 30
- ------------ ------- ------- ------- -------
$150,000....................................... $29,556 $39,408 $49,260 $59,112
200,000....................................... 29,556 39,408 49,260 59,112
300,000....................................... 29,556 39,408 49,260 59,112
400,000....................................... 29,556 39,408 49,260 59,112
500,000....................................... 29,556 39,408 49,260 59,112
600,000....................................... 29,556 39,408 49,260 59,112
700,000....................................... 29,556 39,408 49,260 59,112$150,000................................... $29,432 $39,242 $49,053 $58,864
200,000................................... 29,432 39,242 49,053 58,864
300,000................................... 29,432 39,242 49,053 58,864
400,000................................... 29,432 39,242 49,053 58,864
500,000................................... 29,432 39,242 49,053 58,864
600,000................................... 29,432 39,242 49,053 58,864
700,000................................... 29,432 39,242 49,053 58,864
14
Annual benefits are generally equal to a percentage of final average pay
(averaged over the highest consecutive five-year period out of the last 15
years of service preceding retirement) up to Covered Compensation (the average
of the Social Security wage bases over the 35 year period ending with the year
the participant attains or will attain Social Security Retirement Age) plus a
percentage of final average pay exceeding Covered Compensation, the total of
which is multiplied by years of creditable service up to a maximum of 30
years. Compensation covered under the McKesson Plan is defined as base pay
plus overtime 15
and/or annual bonus as disclosed in the Summary Compensation
Table for the named executive officers and as limited by Internal Revenue Code
Section 401(a)(17).
As of March 31, 1995,1996, the following individuals had the number of years of
creditable service indicated: Mr. Evans, 45 years; Mr. McCafferty, 0 years; Mr.
Caron, 1011 years; and Mr. Kliff, 4Weinberger, 7 years.
Mr. Evans also participates in the McKesson Corporation 1984 Executive
Benefit Retirement Plan (the "EBRP"). The benefit under the EBRP is a
percentage of final average pay based on years of service or is determined by
the Board of Directors. The maximum benefit is 60% of final average pay. The
total paid under the EBRP is not reduced by Social Security benefits but is
reduced by those benefits payable on a single life basis under the McKesson
Plan. Based on retirement at age 65, the annual combined benefit payable to
Mr. Evans under the McKesson Plan and the EBRP would be approximately
$337,260.$290,885.
INDEBTEDNESS OF EXECUTIVE OFFICEROFFICERS
During fiscal year 19951996 Mr. Evans' maximum aggregate indebtedness to the
Corporation, and the amount outstanding at May 15, 1996, was $400,000. This
amount relates to an interest-free loan extended to Mr. Evans and secured by a
deed of trust on certain residential property owned him. The principal amount
of the loan is payable upon the earlier of (i) termination of Mr. Evans'
employment with the Corporation, or (ii) sale of the property, unless the loan
is then secured by a separate deed of trust on real property purchased by Mr.
Evans as his principal residence.
A loan in the amount of $300,000 to finance home repair and improvements was
extended to Mr. Kliff in a prior fiscal year. The loan in the
principal amount of $300,000, due six years after the date of the loan, withrequired annual
interest payments at the rate of 4% per annum, and one interim principal
payment of $150,000 due three years after the date of the loan. The loan to Mr.
Kliff was to finance home repair and improvements, and the loan is secured by a
deed of trust on that property.annum. Mr. Kliff's maximum aggregate
indebtedness to the Corporation during fiscal year 1995 was $520,000, under a prior promissory note which was
repaid in fiscal year 1995. The amount outstanding at March 31, 1995 under the
current promissory note1996 was $300,000 and the
amount outstanding at May 15,
1995March 31, 1996 was $196,000. Under the terms of his
Agreement with the Corporation (see discussion under "Employment Contracts and
Termination of Employment and Change in Control Arrangements" on page 13),
this balance was paid in full in April 1996.
No other director or executive officer was indebted to the Corporation in an
amount in excess ofexceeding $60,000 at any time during fiscal year 1995.1996.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On July 1, 1986, the Corporation entered into a Services Agreement, (the
"Agreement") with McKesson, of which Messrs. McDowellMr. Seelenfreund is an officer and
Seelenfreund are
officers and directors, anddirector, Messrs. Armstrong and Mahoney are officers.officers and Mr. McDowell is a
Senior Adviser. Pursuant to the Agreement, McKesson has agreed to provide
certain corporate staff services to the Corporation. For the fiscal year ended
March 31, 1995,1996, the amount charged the Corporation by McKesson for such
services was $543,000,$519,000, exclusive of insurance and outside professional
services that are billed separately. This charge is modified annually to
reflect changes in McKesson's costs of providing these services. Such services
include treasury and financial, legal, corporate secretary, investor relations, tax, internal
audit, planning and corporate development, accounting advice, and employee
benefit, personnel and payroll
15
services. The Corporation can request, and McKesson may provide, data
processing, computer programming and other services to supplement the
capabilities of the Corporation. McKesson has agreed to make available to the
Corporation certain employee benefit plans and also has agreed to allow
Corporation employees to continue to participate in McKesson's retirement plan
and employee stock ownership plans. The Corporation has agreed to contribute
annually to the plans the amount necessary to fund employee participation. The
Corporation is also insured under McKesson's property and casualty insurance
program for limits of liability and deductibles deemed appropriate for the
Corporation's risk exposures and size. Premiums are based on the Corporation's
risk exposure and historical loss experience.
The Agreement is automatically renewed for successive one-year terms unless
terminated and is reviewed annually by the Corporation's Chief Financial
Officer with the independent nonemployee directors. The Agreement will be
terminated if McKesson should own less than a majority of the outstanding
voting stock
16
of the Corporation, or upon 120 days' prior written notice by
either party, or upon such earlier date as the parties may mutually agree to
in writing. The Agreement provides that McKesson's liability with respect to
any loss or damages arising in connection with the provision of services to
the Corporation is limited to amounts billed for such services.
Pursuant to the Agreement, the Corporation's U.S. operations participate on
a daily basis in a cash management program administered by McKesson. Under
this arrangement, the Corporation invests any excess cash under the cash
management program, has access to the cash invested and meets cash
requirements through borrowing from McKesson. All amounts invested with
McKesson are deposited in a separate bank account in the Corporation's name.
The Corporation receives interest from McKesson on funds deposited under the
program, or pays interest to McKesson on funds borrowed, at a rate equal to
the monthly Federal Reserve Composite Rate for 7-day commercial paper less
one-tenth of one percent for funds deposited under the program and plus one-halfone-
half of one percent for funds borrowed from McKesson. The Agreement provides
that McKesson will make available that amount of cash necessary to provide the
Corporation with sufficient funds to meet its needs as defined in its annual
capital and operating budget and that the Corporation will pay McKesson an
annual credit facility fee of $25,000. At March 31, 1995,1996, the Corporation had
invested $18,182,000$17,359,000 under the cash management program at an interest rate of
6.0%5.3%. The maximum amount invested by the Corporation under the cash management
program at any month end during the fiscal year ended March 31, 19951996 was
$49,027,000.$37,875,000. In the fiscal year ended March 31, 1995,1996, the Corporation received
from McKesson net interest in the amount of $1,656,000$1,486,000 pursuant to this
arrangement.
Under the terms of the Acquisition Agreement dated July 1, 1986 pursuant to
which McKesson transferred the business of its Armor All Products Division to
the Corporation (the "Acquisition Agreement"), McKesson and the Corporation
have agreed that, so long as McKesson owns at least a majority of the
outstanding voting stock of the Corporation, McKesson will refer to the
Corporation any business opportunities McKesson deems appropriate concerning
appearance protection products applicable to the automotive aftermarket.
McKesson has complete discretion to determine which products or ideas the
Corporation may develop or fund. McKesson has not established objective
criteria to utilize in exercising its discretion. Such determinations will be
made on a case-by-case basis as such opportunities arise. McKesson has no
obligation to refer to the Corporation ideas or products whether or not
related to appearance protection products applicable to the automotive
aftermarket. McKesson is currently in the business of distributing appearance
protection products, and will continue to be entitled to distribute such
products and any other products it deems appropriate. The Corporation is
entitled to retain and develop any product or idea within the scope of its
intended operations which it develops through its own facilities or staff.
McKesson is not obligated to fund, or permit the Corporation to fund,
development of any product or idea, if McKesson concludes that such
development is not in the Corporation's best interests.
16
AMENDMENTS TO THE 1986 STOCK OPTION PLAN
Background and Purpose
The Board of Directors believes that the grant of stock options has been of
substantial value in facilitating the efforts of the Corporation to attract
and retain key employees and directors of outstanding ability by providing
them an opportunity to acquire a proprietary interest in the Corporation and
giving them an additional incentive to remain with the Corporation and to use
their best efforts on its behalf. In view of the Corporation's policy to
provide stock options to a broad category of key employees and nonemployee
directors whose continued efforts are essential to the future growth and
earnings of the Corporation, the Board of Directors believes it important that
an adequate supply of Common Stock be available for future stock option
grants. In order to continue to promote the objectives of the 1986 Stock
Option Plan (the "Option Plan"), the Board of Directors adopted two amendments
to the Option Plan on March 19, 1996, subject to approval of the Corporation's
stockholders.
To ensure that an adequate supply of shares is available for future awards
under the Option Plan, the Board approved an amendment to increase by 800,000
the maximum number of shares of Common Stock that may be optioned thereunder
to a total of 2,100,000 shares, and authorized the Compensation Committee to
utilize such additional shares for the granting of options under the Option
Plan prior to approval of the proposed amendment by the stockholders, on the
condition that any such option so granted not be exercised unless and until
the stockholders approve the proposed amendment at the 1996 Annual Meeting.
The last increase of shares under the Option Plan was approved by the
stockholders in 1991. As of May 15, 1996, 40,024 shares remained available for
grant under the Option Plan.
In addition, the Board of Directors approved an amendment to the Option
Plan, which by its terms expires on September 30, 1996, extending it until
such time as it is terminated by the Board.
The full text of the proposed plan amendments is annexed as Exhibit A to
this Proxy Statement. A description of the Option Plan, as currently in
effect, follows.
Description of the Plan
The Option Plan currently provides for the granting of nonqualified options
to purchase an aggregate of not more than 1,300,000 shares of Common Stock of
the Corporation. Shares subject to options which for any reason (except
surrender for shares of stock) cease to be exercisable continue to be
available for subsequent options under the Option Plan. The exercise price of
the stock covered by each option may not be less than 85% of the fair market
value of such stock on the date the option is granted. Shares issued upon
exercise of options may be authorized but unissued stock or authorized and
issued stock reacquired by the Corporation and held in treasury.
The Option Plan provides that each nonemployee director who is elected to
the Board for the first time at any special or annual meeting of stockholders
is to receive, on such date, an option to purchase 5,000 shares of Common
Stock, which is immediately exercisable in full but expires in five equal
annual installments on the date of each of the five subsequent annual
meetings. On the date of each such subsequent annual meeting, each continuing
nonemployee director automatically receives an option to purchase an
additional 1,000 shares, which is immediately exercisable in full. The
exercise price of the options granted to nonemployee directors may not be less
than 100% of the fair market value on the date the option is granted. Subject
to the abovementioned expiration provisions, the term of each option is five
years.
The Option Plan is administered by the Compensation Committee of the Board
(the "Committee"). Committee members are not eligible to receive options under
the Option Plan, except for the options
17
automatically granted to nonemployee directors as described above. From time
to time the Committee may grant options to key employees and designate the
number of shares for which an option will be granted. The Committee has the
full power to construe and interpret the Option Plan and to establish, amend
or rescind rules and regulations for its administration.
The maximum term of each option, except for options granted to nonemployee
directors, may be for such period of time as the Committee may determine, but
not more than ten years from the date it is granted. In consideration of the
granting of options under the Option Plan, an optionee must enter into a
written Stock Option Agreement (the "Agreement") containing such terms,
provisions and conditions determined by the Committee to be consistent with
the Option Plan. An optionee, other than a nonemployee director, must remain
in the continuous employ of the Corporation and/or one of its affiliates for a
period of at least twelve months from the date on which the option is granted
in order to first become eligible to exercise such option. Thereafter, options
granted as installment options become exercisable in four equal annual
installments beginning one year after the grant date. Options granted as non-
installment options become fully exercisable at any time after four years from
the date of grant. Any portion of an option not exercised as it becomes
available shall accumulate and may thereafter be exercised by the optionee at
any time during the option term. In the event of a capital adjustment
resulting from a merger, consolidation, reorganization, recapitalization,
reincorporation, stock split or stock dividend (in excess of 2%), the number
of shares of Common Stock under option and the option price per share will be
appropriately adjusted.
The Option Plan provides that the Committee, in its sole discretion, may
permit an optionee to pay the purchase price upon exercise of any option, in
whole or in part, by tendering to the Corporation shares of the Corporation's
Common Stock owned by the optionee and having an aggregate fair market value
equal to the option price of the new shares being acquired. The rules under
the Option Plan provide for the forfeiture, under certain circumstances, of
options granted on or after March 21, 1994.
The Board of Directors may at any time amend, suspend, or terminate the
Option Plan, but may not adversely affect options already granted or, without
stockholder approval, increase the maximum number of shares subject to the
Option Plan (except for adjustments for recapitalization, stock dividends and
other change in the corporate structure), or change the designation or class
of employees eligible to receive options thereunder.
Federal Tax Consequences
Options granted under the Option Plan will not qualify as "Incentive Stock
Options" within the meaning of Section 422 of the Internal Revenue Code of
1986, as amended, but will be taxable as nonqualified options.
No taxable income results to an optionee upon the grant of nonqualified
stock options. Upon exercise, generally an optionee will have reportable
ordinary income in an amount equal to the difference between the option price
and the fair market value of the shares on the date of exercise, and such
amount will be deductible by the Corporation for federal income tax purposes.
The ordinary income upon exercise of the options will be subject to applicable
withholding taxes. Generally, any profit or loss on the subsequent disposition
of such shares will be short-term or long-term capital gain or loss, depending
upon the holding period for the shares.
New Plan Benefits
Inasmuch as awards under the Option Plan are granted at the sole discretion
of the Committee, other than the initial and annual awards automatically
granted to nonemployee directors, benefits under the Option Plan are not
determinable. The Corporation has approximately 149 employees and in the
fiscal year ended March 31,
18
1996, 57 key employees and two nonemployee directors were granted stock
options. Awards granted during the fiscal year ended March 31, 1996 to the
named executive officers are shown in the Option Grant Table on page 12. The
number and dollar value of awards granted to all current executive officers as
a group (including the named executive officers), to all current directors who
are not executive officers as a group, and to all employees, including all
current officers who are not executive officers, as a group, were 60,500
shares and $13,313; 2,000 shares and $0; and 149,000 shares and $44,250,
respectively. The dollar values represent the difference between the option
exercise price and the closing market price of the Corporation's Common Stock
on March 29, 1996 of $16.375 per share.
On June 3, 1996, the closing market price of the Corporation's Common Stock
was $15.50 per share.
Vote Required
Approval of the proposed amendments to the Option Plan will require the
affirmative vote of a majority of the aggregate number of votes present in
person or by proxy and entitled to vote at the annual meeting.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR APPROVAL OF THE PROPOSED
AMENDMENTS TO THE OPTION PLAN.
RELATIONSHIP WITH INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has appointed the firm of Deloitte & Touche LLP as
independent auditors to audit the accounts of the Corporation for the fiscal
year ending March 31, 1996.1997. Deloitte & Touche served as auditors for the
Corporation during the fiscal year ended March 31, 1995.1996. Representatives of
Deloitte & Touche are expected to be present at the meeting to respond to
appropriate questions and to make a statement if they desire to do so.
17
ANNUAL REPORT
A copy of the Annual Report of the Corporation for the year ended March 31,
1995,1996, including financial statements, accompanies this Proxy Statement.
STOCKHOLDER PROPOSALS FOR 19961997 ANNUAL MEETING
A stockholder who intends to submit a proposal for inclusion pursuant to
Rule 14a-8 under the Securities Exchange Act of 1934 in the proxy statement
for the 19961997 Annual Meeting, must send the proposal so as to be received by
the Vice President and Corporate Secretary at the principal executive offices of the Corporation, 6
Liberty, Aliso Viejo,c/o McKesson
Corporation, One Post Street, San Francisco, CA 92656,94104, no later than February
21, 1996.18, 1997.
By Order of the Board of Directors
/s/ NANCYNancy A. MILLERMiller
Nancy A. Miller
Vice President and Secretary
June 21, 1995
18, 1996
19
EXHIBIT A
AMENDMENTS TO ARMOR ALL PRODUCTS CORPORATION
1986 STOCK OPTION PLAN
(AS PROPOSED TO STOCKHOLDERS ON JULY 26, 1996)
RESOLVED, that the first sentence of Section 2(a) of the Armor All Products
Corporation 1986 Stock Option Plan (the "Option Plan") is amended to read in
its entirety as follows (amendment is underlined):
"2. Stock Subject to the Plan.
(a) Options may be granted under the Plan from time to time to
purchase an aggregate of not more than 2,100,000 shares of Stock."
RESOLVED, FURTHER, that the last sentence of the second paragraph of Section
9(b) of the Option Plan is amended to read as follows (language to be deleted
is shown as stricken, amendment is underlined):
"This Plan shall remain in effect from the effective date until
terminated by the Board of Directors of the Corporation." terminate on
September 30, 1996, unless previously terminated by the Board pursuant to
this paragraph. [portion outside quotes is stricken in original]
June 21, 199518, 1996
Dear Armor All Profit-Sharing Investment Plan Participant:
As a participant in the Armor All Products Corporation Profit-Sharing
Investment Plan ("PSIP"), you are a stockholder in the Corporation. At the
Annual Stockholders Meeting to be held on July 31, 1995,26, 1996, you have the right to
instruct the Plan Trustee, on athe confidential basis, how to vote the shares of
Armor All Common Stock allocated to your accounts on matters that come before
the stockholders. Your PSIP accounts include the shares held as a result of
Company Matching Contributions and Quarterly Contributions.
The enclosed Proxy Statement describes the proposalproposals to be voted on at
this year's Annual Meeting. The Board of Directors of Armor All recommends that
you vote FOR the election of directors. PLEASE COMPLETE, SIGN AND RETURN THE
ENCLOSEDdirectors and the amendments to the 1986 Stock
Option Plan. Please complete, sign and return the enclosed PSIP VOTING CARD IN THE ENVELOPE PROVIDED. Ifvoting card in
the envelope provided. It you sign and return this card without marking any
specific voting directions, your shares will be voted in accordance with the
Board of Directors' recommendationrecommendations as indicated above. This card also gives the
Trustee authority to vote on your behalf on any other matters which may properly
come before the meeting. All shares for which the Trustee receives no voting
instructions will be voted in the same proportion as shares for which
instructions are received.
Participants who own shares of Armor All Common Stock by means other than
the PSIP will receive a separate proxy for the voting of those shares.
To ensure that your shares are represented and voted at the meeting
according to your wishes, your signed PSIP voting card must be received by the
Trustee by July 26, 1995.24, 1996. A copy of the Corporation's 19951996 Annual Report will be
distributed separately.
I encourage you to exercise your voting rights as a stockholder of the
Corporation.
Sincerely,
Kenneth M. Evans
President and
Chief Executive Officer
- --------------------------------------------------------------------------------
P R O X YLOGO
ARMOR ALL PRODUCTS CORPORATION
PROXY FOR ANNUAL MEETING
JULY 31, 199526, 1996
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE CORPORATION
The undersigned, whose signature appears on the reverse side, hereby
consti-
tutesconstitutes and appoints David E. McDowell, Kenneth M. Evans, and Nancy A. Miller and Michael G.
McCafferty, and each of them, with full power of substitution, proxies to vote
all stock of Ar-
morArmor All Products Corporation which the undersigned is entitled
to vote at the Annual Meeting of Stockholders to be held in the Lobby Level
Conference Room, 44 Montgomery Street, San Francisco, California, on Monday,Friday,
July 31, 199526, 1996 at 10:00 A.M., or at any adjournments thereof, as specified upon
the matters indi-
cated on the reverse side,indicated below, and in their discretion upon any other matters
that may properly come before said meeting.
This Proxy when properly executed will be voted in the manner directed below.
If no direction is given, this proxy will be voted FOR the following proposals:
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSALS:
1. Election of Directors:Directors
William A. Armstrong, Jon S. Cartwright, Kenneth M. Evans, David L.
Mahoney,
David E. McDowell, Karen Gordon Mills and Alan Seelenfreund.
[_] FOR [_] WITHHELD
FOR, except vote withheld from the following nominee(s):
- --------------------------------------------------------------------------------
2. Approval of Amendments to the 1986 Stock Option Plan.
[_] FOR [_] AGAINST [_] ABSTAIN
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICECHOICES BY MARKING THE APPROPRIATE BOX, SEE
REVERSE SIDE,BOXES,
BUT YOU NEED NOT MARK ANY BOX IF YOU WISH TO VOTE IN ACCORDANCE WITH THE BOARD
OF DIRECTORS' RECOMMENDATION.RECOMMENDATIONS. THE PROXY COMMITTEE CANNOT VOTE YOUR SHARES
UNLESS YOU SIGN AND RETURN THIS CARD.
SEE REVERSE
SIDE
- --------------------------------------------------------------------------------
-- FOLD AND DETACH HERE --
- --------------------------------------------------------------------------------
[X] Please mark your votes as in this example.
-------
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BELOW.
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE FOLLOWING PROPOSAL:
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSAL:
- --------------------------------------------------------------------------------
1. Election of Directors (see reverse)
FOR [_] WITHHELD [_]
FOR, except vote withheld from the following nominee(s):
- --------------------------------------------------------------------------------Date: _______________, 1996
---------------------------
---------------------------
SIGNATURE(S)
NOTE: Please sign exactly
as name appears hereon.
Joint owners should each
sign. When signing as
attorney, executor,
administrator, trustee or
guardian, please give full
title as such.
- --------------------------------------------------------------------------------
________________________________________________________________________________
SIGNATURE(S) DATE
- --------------------------------------------------------------------------------
[PASTE-UP ART]
[ARMOR ALL ADVERTISING ART/COUPON]
- --------------------------------------------------------------------------------
P R O X Y
ARMOR ALL PRODUCTS CORPORATION
PROXY FOR ANNUAL MEETING
JULY 31, 1995
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF THE CORPORATION
The undersigned, whose signature appears on the reverse side, hereby consti-
tutes and appoints David E. McDowell, Kenneth M. Evans and Nancy A. Miller, and
each of them, with full power of substitution, proxies to vote all stock of Ar-
mor All Products Corporation which the undersigned is entitled to vote at the
Annual Meeting of Stockholders to be held in the Lobby Level Conference Room,
44 Montgomery Street, San Francisco, California, on Monday, July 31, 1995 at
10:00 A.M., or at any adjournments thereof, as specified upon the matters indi-
cated on the reverse side, and in their discretion upon any other matters that
may properly come before said meeting.
Election of Directors: William A. Armstrong,
Jon S. Cartwright, Kenneth M. Evans,
David L. Mahoney, David E. McDowell, Karen
Gordon Mills and Alan Seelenfreund.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICE BY MARKING THE APPROPRIATE BOX, SEE
REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOX IF YOU WISH TO VOTE IN ACCORDANCE
WITH THE BOARD OF DIRECTORS' RECOMMENDATION. THE PROXY COMMITTEE CANNOT VOTE
YOUR SHARES UNLESS YOU SIGN AND RETURN THIS CARD.
SEE REVERSE
SIDE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[X] Please mark your votes as in this example.
--------
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED BELOW.
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE FOLLOWING PROPOSAL:
- --------------------------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING PROPOSAL:
- --------------------------------------------------------------------------------
1. Election of Directors (see reverse)
FOR [_] WITHHELD [_]
FOR, except vote withheld from the following nominee(s):
- --------------------------------------------------------------------------------
NOTE: Please sign exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such.
- --------------------------------------------------------------------------------
________________________________________________________________________________
SIGNATURE(S) DATE
- --------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
PSIP VOTING CARD
DIRECTION TO TRUSTEE, ARMOR ALL PRODUCTS CORPORATION
PROFIT-SHARING INVESTMENT PLAN
To: The Chase Manhattan Bank, N.A.
I direct you as Trustee of the Armor All Products Corporation Profit-Sharing
Investment Plan to vote (in person or by proxy) as I have indicated on the
reverse side hereof, all shares of Armor All Products Corporation Common Stock
allocated to my accounts under the plan at the Annual Meeting of Stockholders
of Armor All Products Corporation on July 31, 1995.26, 1996. You may vote according to
your discretion (or that of your proxy holder) on any other matter which may
properly come before the meeting.
Election of Directors: William A. Armstrong, Jon S.
Cartwright, Kenneth M. Evans,
David L. Mahoney, David E. McDowell, Karen Gordon
Mills and Alan Seelenfreund.
YOU ARE ENCOURAGED TO SPECIFY YOUR CHOICECHOICES BY MARKING THE APPROPRIATE BOX,BOXES,
SEE REVERSE SIDE, BUT YOU NEED NOT MARK ANY BOXBOXES IF YOU WISH TO VOTE IN
ACCORDANCE WITH THE BOARD OF DIRECTORS' RECOMMENDATION.RECOMMENDATIONS.
-------------
SEE REVERSE
SIDE
- --------------------------------------------------------------------------------
[PASTE-UP ART]
[ARMOR ALL ADVERTISING ART/COUPON]-------------
- --------------------------------------------------------------------------------
[X] PLEASE MARK VOTES
AS IN THIS EXAMPLE
With- For All
For hold Except
1. Election of Directors FOR [_] WITHHOLD [_] FOR ALL EXCEPT [_]
WILLIAM A. ARMSTRONG DAVID E. MCDOWELLL. MAHONEY
JON S. CARTWRIGHT DAVID E. MCDOWELL
KENNETH M. EVANS KAREN GORDON MILLS
KENNETH M. EVANS ALAN SEELENFREUND
DAVID L. MAHONEY
If you do not wish your shares voted "FOR" a particular nominee, mark the
"For All Except" box and strike a line through the nominee(s) name. Your
shares will be voted for the remaining nominee(s).
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE ABOVE PROPOSAL.PROPOSALS.
2. Approval of Amendments to 1986 Stock Option Plan
FOR AGAINST ABSTAIN
[_] [_] [_]
THIS VOTING CARD WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED
ABOVE. IF NO DIRECTION IS GIVEN, IT WILL BE VOTED FOR THE PROPOSAL.PROPOSALS.
- -----------------------------------------------------------------------
(Signature) X: ____________________________________________________________ Date:_________________________________________
Please be sure to sign and date this Proxy.
- -----------------------------------------------------------------------
- --------------------------------------------------------------------------------
DETACH CARD DETACH CARD