THE CLOROX COMPANY
NONQUALIFIED DEFERRED COMPENSATION PLAN
(January 1, 1996)
Amended and Restated through April 8, 1996
ARTICLE I.
PURPOSE
This Plan is designed to restore to selected employees of The
Clorox Company and its affiliates certain benefits that cannot be
provided under The Clorox Company's tax-qualified retirement
plans. In addition, this Plan permits selected employees to
defer bonuses and regular pay.
This Plan is intended to be a plan that is unfunded and
that is maintained by The Clorox Company primarily for the
purpose of providing deferred compensation for a select group
of management or highly compensated employees within the
meaning of the Employee Retirement Income Security Act.
ARTICLE II.
DEFINITIONS
In this Plan, the following terms have the meanings
indicated below.
2.01 "Account" means a bookkeeping entry used to
record deferrals and contributions made on a Participant's
behalf under Article III of the Plan and gains and losses
credited to these deferrals and contributions under
Article IV of the Plan.
2.02 "Affiliate" means an entity other than the
Company whose employees participate in the Profit Sharing
Plan and/or the Pension Plan.
2.03 "Beneficiary" means the beneficiary or
beneficiaries designated by a Participant, in writing, to
receive amounts (if any) payable from that Participant's
Account after the Participant's death. If a Participant
fails to properly designate a beneficiary or if a beneficiary
predeceases the Participant, the portion of the Participant's
Account that was to be paid to the improperly designated
beneficiary or to the beneficiary that predeceased the
Participant will be paid to the Participant's estate.
2.04 "Bonus" means one or more cash bonuses
designated from time to time by the Committee as eligible
for deferral under this Plan. As of January 1, 1996, the
term Bonus includes the following bonuses payable (but
for any deferral election) after July 1, 1996:
Cash-or-Deferred Profit Sharing Bonus, and/or an award
under The Clorox Management Incentive Compensation Plan
and/or a Sales Added Compensation Bonus and/or a Mid Level
Incentive Bonus.
2.05 "Committee" means the Company's Employee
Benefits Committee or another group appointed by the
Employee Benefits and Management Compensation Committee
of the Company's Board of Directors. The Committee has
full discretionary authority to administer and interpret the
Plan, to determine eligibility for Plan benefits, to select
employees for Plan participation, and to correct errors.
The Committee may delegate its duties and responsibilities
and, unless the Committee expressly provides to the contrary,
any such delegation will carry with it the Committee's full
discretionary authority to accomplish the delegation.
Decisions of the Committee and its delegate will be final
and binding on all persons.
2.06 "Company" means The Clorox Company.
2.07 "Eligible Employee" means an employee of the
Company or of an Affiliate who has been selected by the
Committee for Plan participation and who, except as provided
in Section 3.01(c), has confirmed his or her participation
in writing with the Committee before the calendar year in
which deferrals and/or restoration contributions under this
Plan are made on that employee's behalf.
o An individual will cease to be an Eligible Employee
on the earliest of (i) the date the individual ceases to be
employed by the Company and all Affiliates, (ii) the date the
Plan is terminated, or (iii) the date the individual is
notified by the Committee that he or she is no longer an
Eligible Employee.
o For purposes of the restoration contributions
described in Section 3.02 of this Plan, an employee who
terminates employment with the Company and all Affiliates
before July 1, 1996 will not be an Eligible Employee,
unless and until he or she is rehired by the Company or
an Affiliate and designated by the Committee as an Eligible
Employee.
o For purposes of the deferrals described in Section
3.01 of this Plan, an employee who terminates employment
with the Company and all Affiliates before January 1, 1996
will not be an Eligible Employee, unless and until he or
she is rehired by the Company or an Affiliate and redesignated
by the Committee as an Eligible Employee.
2.08 "$150,000 Limit" means the $150,000 (indexed)
limit of Internal Revenue Code Section 401(a)(17), which limits
the compensation that can be taken into account when determining
benefits under a tax-qualified retirement plan.
2.09 "Participant" means a current or former Eligible
Employee who retains an Account.
2.10 "Pension Plan" means The Clorox Company Pension
Plan, as amended from time to time. "Pension Plan Year" means
the plan year defined in the Pension Plan and "Cash Balance
Contribution" means a cash balance contribution as defined in
the Pension Plan.
2.11 "Plan" means The Clorox Company Nonqualified Deferred
Compensation Plan, as amended from time to time.
2.12 "Profit Sharing Plan" means The Clorox Company
Profit Sharing Plan, as amended from time to time. "Profit
Sharing Plan Year" means the plan year defined in the Profit
Sharing Plan and "Profit Sharing Contribution" means a profit
sharing contribution (including forfeitures) as described in
the Profit Sharing Plan.
2.13 "Regular Pay" means the pre-tax amount of an
Eligible Employee's base salary. Regular Pay is determined
on a "paycheck by paycheck" basis and does not include amounts
paid before January 1, 1997.
2.14 "Termination of Employment" means termination of
employment with the Company and all Affiliates, other than by
reason of death.
ARTICLE III.
DEFERRALS AND CONTRIBUTIONS
3.01 Deferrals. An Eligible Employee may defer up to 50%
of his or her Regular Pay and up to 100% of each Bonus for which
he or she is eligible by submitting a written election to the
Committee that satisfies such requirements, including such
minimum deferral amounts, as the Committee may determine.
Participants will be 100% vested in these deferrals.
(a) Elections. For each calendar year, an Eligible
Employee may make three separate deferral elections: an election
to defer Regular Pay, an election to defer his or her Cash-or-Deferred
Profit Sharing Bonus (if any), and an election to defer all
other types of Bonus (if any). Each such election must be made
before the calendar year in which the Regular Pay and/or Bonus
is scheduled to be paid and, with respect to a Bonus, no less
than 6 months before scheduled payment of the Bonus. Elections
will remain in effect for one calendar year.
(b) Late Election. If an Eligible Employee does not
make a timely election for an upcoming calendar year, no deferral
will be made on behalf of that Eligible Employee with regard to
that election for that upcoming calendar year.
(c) Initial Election. Notwithstanding the timing
provisions in paragraphs (a) and (b) above, within 30 days after
the date that an Eligible Employee is first notified that he or
she is eligible to participate in the Plan or within 30 days after
the initial effective date of the Plan, an Eligible Employee may
elect to defer (i) Regular Pay for services to be performed
subsequent to the election and (ii) any Bonus that is scheduled
to be paid at least 6 months after the date of the election.
These elections will remain in effect until the end of the
calendar year for which they were made.
3.02 Restoration Contributions. Subject to paragraphs (d),
(e), and (f) below, Eligible Employees' Accounts will be credited
with restoration contributions as described below.
(a) Profit Sharing. The amount of an Eligible
Employee's profit sharing restoration contribution for a Profit
Sharing Plan Year beginning on or after July 1, 1995 will be
equal to the amount by which that Eligible Employee's Profit
Sharing Contribution (including any Cash-or-Deferred Profit Sharing)
for that Profit Sharing Plan Year was reduced due to (i) the
$150,000 Limit and (ii) amounts (excluding any Cash-or-Deferred
Profit Sharing) voluntarily deferred under this Plan.
(b) Pension. The amount of an Eligible Employee's
pension restoration contribution for a Pension Plan Year
beginning on or after July 1, 1995 will be equal to the amount
by which the Eligible Employee's Cash Balance Contribution for
that Pension Plan Year was reduced due to (i) the $150,000
Limit and (ii) amounts voluntarily deferred under this Plan.
(c) Special Restoration Contributions. Accounts of
individuals who are Eligible Employees on July 1, 1996 will be
credited with the following special restoration contributions:
(i) 1994-95 Profit Sharing Plan Contribution.
A special contribution equal to the amount by which the
Eligible Employee's Profit Sharing Contribution for the Profit
Sharing Plan Year beginning July 1, 1994 was actually reduced
due to the $150,000 Limit.
(ii) 1994-95 Pension Plan Accrual. A special
contribution, which is the lump sum equivalent of the amount by
which the Eligible Employee's Pension Plan accrual for the
Pension Plan year beginning July 1, 1994 was actually reduced
due to the $150,000 Limit. This lump sum equivalent amount will
be the lump sum present value, as of June 30, 1996, of the
pension accrual described in the preceding sentence (expressed
as a single life annuity commencing as of the later of: the
Eligible Employee's age, as of June 30, 1996 or age 65), where
the present value is determined using: the annual rate of
interest on 30-year Treasury securities for January, 1996, the
applicable mortality table that is specified for use in January
1996 in accordance with Section 417(e)(3)(A)(ii)(I) of the
Internal Revenue Code, and the Eligible Employee's age as of
June 30, 1996, rounded to years and completed months.
(d) Crediting. Restoration contributions will be
credited to Eligible Employees' Accounts as of the date that
the Profit Sharing Contributions or the Cash Balance
Contributions to which the restoration contributions relate
are credited to the Profit Sharing Plan or the Pension Plan,
as the case may be. Notwithstanding the foregoing, the special
restoration contributions described in the preceding paragraph
(c) will be credited as of July 1, 1996.
(e) Vesting. Participants will vest in their
restoration contributions at the same percentage rate that they
vest in the Profit Sharing Contributions or the Pension Plan
allocations to which the restoration contributions relate.
Amounts not vested upon the earlier of Termination of Employment
or death will be forfeited.
(f) Restrictions.
(i) Participation. If an Eligible Employee is
not credited with an actual Pension Plan accrual for a given
Pension Plan Year, that Eligible Employee will not receive a
pension restoration contribution under this Plan for that year.
Similarly, if an Eligible Employee does not receive an actual
Profit Sharing Contribution for a given Profit Sharing Plan Year,
that Eligible Employee will not receive a profit sharing
restoration contribution under this Plan for that year.
(ii) Eligible Employee. In order to receive a
restoration contribution under this Plan with respect to a given
Profit Sharing Year or Pension Plan Year, an individual must have
been an Eligible Employee during that year; provided, however,
that this requirement will be satisfied with respect to the
special restoration contributions described in (c) above if
an individual is an Eligible Employee on July 1, 1996.
ARTICLE IV.
EARNINGS
4.01 Elections. The Committee may permit Participants
to request that earnings on their Accounts be credited as
though the Accounts were invested in one or more investments
approved by the Committee.
4.02 Interest. To the extent that earnings are not
credited as described above, the Committee will credit interest
to each Account. Interest will be credited quarterly in
accordance with procedures approved by the Committee. The
interest rate used will be the annual rate of interest on
30-year Treasury securities, as determined in accordance with
Section 417(e)(3)(A)(ii)(II) of the Internal Revenue Code,
for the second month preceding the Company's fiscal year for
which the interest is credited. The first quarter for which
interest will be credited is the calendar quarter beginning
July 1, 1996.
ARTICLE V.
DISTRIBUTIONS
5.01 Distribution Elections. Eligible Employees will
elect the form in which Plan benefits will be paid to them
upon Termination of Employment by following the procedures
described below and by satisfying such additional requirements
as the Committee may determine.
(a) Restoration Contributions. When an Eligible
Employee confirms his or her Plan participation, as provided
in Section 2.07 of the Plan, the Eligible Employee will
irrevocably elect, in writing, one of the distribution forms
described in Section 5.02, below, as the form in which the
Eligible Employee's vested restoration contributions (if any)
described in Section 3.02 (and associated earnings) will be
paid upon the Eligible Employee's Termination of Employment.
(b) Deferrals. Each time an Eligible Employee
authorizes deferrals for a calendar year under Section 3.01(a)
or Section 3.01(c) of the Plan, the Eligible Employee will
irrevocably elect one of the distribution forms described in
Section 5.02, below, as the form in which all amounts to be
deferred for that calendar year (and associated earnings) will
be paid upon the Eligible Employee's Termination of Employment.
The election must be submitted to the Committee, in writing,
before the calendar year in which the deferrals governed by
the election are scheduled to be paid (or, if applicable,
when elections are made under Section 3.01(c)) and no less than
6 months before scheduled payment of any Bonus governed by
the election. If a distribution election for a calendar year
is not valid because it is not made in a timely manner, the
Eligible Employee's most recent effective distribution election
under this Section 5.01(b) or, if there is no such election,
the Eligible Employee's distribution election under Section
5.01(a), will govern deferrals (if any) for that calendar year.
5.02 Termination of Employment. The vested portion of a
Participant's Account will be distributed to the Participant
following the Participant's Termination of Employment in one
or more of the following forms elected pursuant to Section
5.01, above.
(a) Lump Sum. Payment in one lump sum as soon as
administratively practicable (as determined by the Committee)
after the Participant's Termination of Employment, but in no
event later than 60 days after the Participant's Termination
of Employment or, if the Participant so elected, as soon as
administratively practicable (as determined by the Committee)
after the end of the calendar year of the Participant's
Termination of Employment, but in no event later than 60 days
after the end of the calendar year of the Participant's
Termination of Employment.
(b) Installments. Annual installment payments, not
in excess of 10, to begin as soon as administratively
practicable (as determined by the Committee) after the
Participant's Termination of Employment, but in no event later
than 60 days after the Participant's Termination of Employment
or, if the Participant so elected, as soon as administratively
practicable (as determined by the Committee) after the end of
the calendar year of the Participant's Termination of Employment,
but in no event later than 60 days after the end of the calendar
year of the Participant's Termination of Employment. The amount
of each installment will be equal to the Participant's entire
remaining Account balance as of the beginning of the
calendar quarter of payment divided by the number of
remaining installments to be paid.
(c) Rehire. If a Participant's entire Account has
not been distributed and/or the Participant was not 100%
vested in his or her Account upon Termination of Employment and
the Participant again becomes an Eligible Employee, distributions
to the Participant under paragraph (a) and/or (b) above will
cease, amounts forfeited (if any) from the Participant's Account
will be restored, and the Participant's distribution election
under Section 5.01(a) will remain in effect. If a former
Participant's entire Account has been distributed and the
former Participant was 100% vested in his or her Account
upon Termination of Employment, the former Participant will
make a new distribution election under Section 5.01(a) if he
or she again becomes an Eligible Employee.
5.03 Death. If a Participant dies with a vested amount
in his or her Account, whether or not the Participant was
receiving payouts from that Account at the time of his or her
death, the Participant's Beneficiary will receive the entire
vested amount in the Participant's Account as soon as
administratively practicable (as determined by the Committee)
but in no event later than 60 days after the Committee learns
of the Participant's death.
5.04 Withholding. The Company will deduct from Plan
payouts, or from other compensation payable to a Participant or
Beneficiary, amounts required by law to be withheld for taxes
with respect to benefits under this Plan.
ARTICLE VI.
MISCELLANEOUS
6.01 Limitation of Rights. Participation in this Plan
does not give any individual the right to be retained in the
service of the Company or of any related entity.
6.02 Satisfaction of Claims. Payments to a Participant,
the Participant's legal representative, or Beneficiary in
accordance with the terms of this Plan will, to the extent
thereof, be in full satisfaction of all claims that person may
have hereunder against the Committee, the Company, and all
Affiliates, any of which may require, as a condition to payment,
that the recipient execute a receipt and release in a form
determined by the Committee, the Company, or an Affiliate.
6.03 Indemnification. The Company and the Affiliates
will indemnify the Committee, the Company's Board of Directors,
and employees of the Company and the Affiliates to whom
responsibilities have been delegated under the Plan for all
liabilities and expenses arising from an act or omission in
the management of the Plan if the person to be indemnified
did not act dishonestly or otherwise in willful violation of
the law under which the liability or expense arises.
6.04 Assignment. To the fullest extent permitted by
law, rights to benefits under the Plan are not subject in any
manner to anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance, attachment, or garnishment by creditors
of a Participant or a Beneficiary.
6.05 Lost Recipients. If the Committee cannot locate a
person entitled to payment of a Plan benefit after a
reasonable search, the Committee may at any time thereafter
treat that person's Account as forfeited and amounts credited
to that Account will revert to the Company. If the lost
person subsequently presents the Committee with a valid claim
for the forfeited benefit amount, the Company will pay that
person the amount forfeited.
6.06 Amendment and Termination. The Company's Board of
Directors may, at any time, amend the Plan in writing or
terminate the Plan. In addition, the Committee may amend the
Plan (other than this Section 6.06) in writing, provided that
the amendment will not cause any substantial increase in cost
to the Company or to any Affiliate. No amendment may, without
the consent of an affected Participant (or, if the Participant
is deceased, the Participant's Beneficiary), adversely affect
the Participant's or the Beneficiary's rights and obligations
under the Plan with respect to amounts already credited to a
Participant's Account. Notwithstanding the foregoing, if the
Plan is terminated, the Company's Board of Directors may
determine that all Accounts will be paid out.
6.07 Applicable Law. To the extent not governed by Federal
law, the Plan is governed by the laws of the State of California
without choice of law rules. If any provision of the Plan is
held to be invalid or unenforceable, the remaining provisions
of the Plan will continue to be fully effective.
6.08 No Funding. The Plan constitutes a mere promise by
the Company and the Affiliates to make payments in the future
in accordance with the terms of the Plan. Participants and
Beneficiaries have the status of general unsecured creditors
of the Company and the Affiliates. Plan benefits will be paid
from the general assets of the Company and the Affiliates and
nothing in the Plan will be construed to give any Participant
or any other person rights to any specific assets of the Company
or the Affiliates. In all events, it is the intention of the
Company, all Affiliates and all Participants that the Plan be
treated as unfunded for tax purposes and for purposes of Title I
of the Employee Retirement Income Security Act.
IN WITNESS WHEREOF, The Clorox Company has caused this Plan
to be executed by its duly authorized representative on the
date indicated below.
/s/ Edward A. Cutter April 8, 1996
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