THE CLOROX COMPANY
SUPPLEMENTAL
EXECUTIVE
RETIREMENT PLAN
RESTATED
JULY 17, 1991
AMENDED
MAY 18, 1994
and
JANUARY 17, 1996
PURPOSE OF THE PLAN
The purpose of The Clorox Company Supplemental Executive Retirement
Plan (the "Plan") is to provide retirement benefits for certain
executives of The Clorox Company (the "Company") in addition to
the retirement benefits provided generally to all Company salaried
employees. These supplemental benefits are intended to provide
greater retirement security for those executives and to aid in
attracting and retaining future executives.
July 17, 1991
ARTICLE I
DEFINITIONS
The following words and phrases as used herein shall have the
following meanings, unless a different meaning is plainly required
by the context.
1.1 "Accrued Benefit" means the benefit of a Participant
calculated under Article II at the time of the Participant's
termination, or for Participants who have not terminated
employment, at the time of their assumed termination. In the
latter case, the benefit will be based upon the following as of
their assumed termination: (a) Compensation, (b) total years
and completed months of service, (c) any vested accrued benefit
from a Company sponsored Defined Benefits Plan, (d) the monthly
benefit which could be provided based on the actuarially
determined annuity value of the Participant's vested Company
contributions account under any Company sponsored Defined
Contribution Plan, and (e) any monthly primary insurance benefit
to which the Participant may be entitled under the Social
Security Act.
1.2 "Board of Directors" means the board of directors of
the Company as from time to time constituted.
1.3 "Committee" means the Employee Benefits and
Management Compensation Committee of the Board of Directors.
May 18, 1994
I-1
1.4 "Company" means The Clorox Company.
1.5 "Compensation" means the total of annual base salary
plus the Management Incentive Compensation awarded to a
Participant and in each case includes amounts the receipt of
which the Participant has elected to defer or to take in the
form of restricted stock or a stock option. For purposes of
the calculation of benefits in Sections 2.3 and 2.5, the
total of the Participant's three highest Management Incentive
Compensation awards will be apportioned evenly over the 36
consecutive months of highest base salary.
1.6 "Defined Benefit Plan" means a plan, fund or program
under which an employer undertakes systematically for the
payment of definitely determinable benefits to its employees
over a period of years after retirement. The benefit an employee
will receive upon retirement can be determined from a formula
defined in the plan instrument.
1.7 "Defined Contribution Plan" means a plan which provides
for an individual account for each participant and for benefits
based solely on the amount contributed to the participant's
account, and any income, expenses, gains and losses and any
forfeitures of accounts of other participants which may be
allocated to such participant's account. Beginning July 1, 1994
"Defined Contribution Plan" shall include NonQualified Deferred
Compensation Plans which a) restore amounts for a Participant's
benefit which cannot be contributed to a defined benefit or
contribution plan deemed qualified under the Internal Revenue
Code, or b) account for annual distributions, whether deferred
or received in cash, made from a Defined Contribution Plan
rather than credited to the Participant's account in such plan.
1.8 "Effective Date" means July 1, 1981.
January 17, 1996 I-2
1.9 "Married Participant" means a Participant who is
lawfully married on the date Retirement Benefits become payable
pursuant to Article II (Retirement Benefits).
1.10 "Officer" means an officer of the Company with a
rank of Vice President or above.
1.11 "Participant" means any employee who becomes a
Participant pursuant to Section 2.1 (Participation), or a
former employee who has become entitled to a Normal or
Early Retirement Benefit pursuant to the Plan.
1.12 "Retirement Benefit" means the retirement income
provided to Participants and their joint annuitants in
accordance with the applicable provisions of Article II
(Retirement Benefits).
Words importing males shall be construed to include females
wherever appropriate.
July 17, 1991 I-3
ARTICLE II
RETIREMENT BENEFITS
2.1 Participation
The employees of the Company named in Exhibit A are the
Participants currently accruing benefits or who have vested
deferred benefits and have not begun to receive such benefits.
From time to time, the Committee may designate additional
employees as Plan Participants. A Participant who is an
Officer of the Company and who is removed from office or is
not reelected as an Officer, or who is not an Officer and
who terminates his employment or has his employment terminated,
will thereupon cease to be a Participant and will have no
vested interest in the Plan unless he is entitled to a Normal
or Early Retirement Benefit pursuant to this Article II.
July 17, 1991 II-1
2.2 Normal Retirement Date
A Participant who terminates his employment on or after age
sixty-five with ten or more years of employment with the Company
will receive a Normal Retirement Benefit beginning on the first
day of the month following his termination of employment. Such
date will be the Participant's Normal Retirement Date.
2.3 Normal Retirement Benefits
The Normal Retirement Benefit payable to a Participant will be
equal to 3-2/3% of the monthly average of the Participant's
compensation during the thirty-six (36) consecutive months of
employment producing the highest such average, times the
Participant's total years and completed months of employment
with the Company as of his termination of employment, to a
maximum of 15 years, offset by:
(a) the monthly benefit payable under a 50% joint and survivor
annuity form for a Married Participant or an annuity payable
for the life of a single Participant, which would be provided
to the Participant on his Normal Retirement Date (i) by Company
contributions under any Company sponsored Defined Benefit Plan
plus (ii) the monthly benefit which could be provided based on
the actuarially determined annuity value of his vested Company
contributions account under any Company sponsored Defined
Contribution Plan, plus
(b) the monthly primary insurance benefit to which the
Participant may be entitled under the Social Security Act as
of his Normal Retirement Date.
For purposes of this Section, Company contributions shall not
include voluntary reductions of compensation under the provisions
of a Company sponsored Defined Contribution Plan. Company
matching contributions under such a plan shall be considered
Company contributions.
May 18, 1994 II-2
2.4 Early Retirement Date
A Participant who terminates his employment on or after age
fifty-five with ten or more years of employment with the
Company will receive an Early Retirement Benefit beginning
on the first day of the month following his termination of
employment. The date of the commencement of the Early
Retirement Benefit will be the Participant's Early Retirement
Date.
2.5 Early Retirement Benefit
The Early Retirement Benefit payable to a Participant on
his Early Retirement Date will be calculated in the same
manner as the Normal Retirement Benefit in Section 2.3 except
that:
(a) Before deducting the offsets provided in Section 2.3, (a)
and (b), the benefit derived by the calculation in the first
paragraph of Section 2.3 shall be reduced to reflect the
Participant's retirement before his Normal Retirement Date.
This reduction will be one quarter of one percent (0.25%) for
each month that the Participant's Early Retirement Date
precedes his Normal Retirement Date.
May 18, 1994 ARTICLE II-3
(b) In calculating the offset described in Section 2.3, (a)
and (b), the reference to "Normal Retirement Date" shall be
changed to "Early Retirement Date." If the Early Retirement
Date is prior to the Participant's attainment of age 62, then
the monthly primary insurance benefit payable at age 62 shall
be multiplied by the appropriate factor from the table below:
Age at Early
Retirement Date Factor
62 1.00
61 .90
60 .81
59 .73
58 .66
57 .60
56 .54
55 .49
If the Participant's Age on the Early Retirement Date is not
an integral age, the factors above shall be interpolated to
reflect the age in years and months. If the Participant is
62 or older on his/her Early Retirement Date, the offset shall
be the actual monthly primary insurance benefit to which the
Participant is entitled under the Social Security Act as of that date.
May 18, 1994 II-3a
2.6 Form of Payment
A Participant's Normal or Early Retirement Benefit, will be
paid to him monthly beginning on his Normal or Early Retirement
Date and ending with the payment due for the month in which
his death occurs. If the spouse of a Participant who is
receiving a Retirement Benefit survives the Participant,
monthly payments equal to 50% of the monthly amount payable
to the Participant will continue to such spouse ending with
the payment due for the month in which such spouse's death occurs.
2.7 Termination other than Early or Normal Retirement
A Participant who terminates employment or whose employment is
terminated by the Company and who does not meet the requirements
for an Early or Normal Retirement Benefit will be not be entitled
to a benefit under the Plan.
2.8 Pre-Retirement Death Benefit
The surviving spouse of a Participant with ten or more years of
employment with the Company who dies before he has begun receiving
a Normal or Early Retirement Benefit shall be entitled to receive
a Pre-Retirement Death Benefit. The Pre-Retirement Death Benefit
shall be one-half of a 50% joint and survivor annuity form of the
Early or Normal Retirement Benefit the Participant would have
received had he elected to begin receiving a Retirement Benefit
on the first day of the month following his death. If the
Participant's death occurs before he has attained the age at which
he could elect to receive an Early Retirement Benefit, the
Pre-Retirement Death Benefit will commence on the first day of the
month following the date upon which the Participant would have
attained that age had he survived; provided, however, that if the
surviving spouse dies before that date, there shall be no
Pre-Retirement Death Benefit available to any survivors of the
Participant or his spouse.
July 17, 1991 II-4
2.9 Disability
A Participant who becomes disabled as determined by The Clorox
Company Pension Plan will continue to participate in this Plan
on the same basis as he continues to participate in said
Pension Plan.
July 17, 1991 II-5
ARTICLE III
MISCELLANEOUS PROVISIONS
3.1 Plan Administration
The Committee shall have the power and the duty to take all
action and to make all decisions necessary and proper to carry
out the Plan. Without limiting the generality of the foregoing,
the Committee hereby designates the Employee Benefits Committee
of the Company to control and manage the operation and
administration of the Plan. The Committee shall have the
authority to allocate among themselves or to the Employee
Benefits Committee or to delegate to any other person, any
fiduciary responsibility with respect to the Plan.
3.2 Amendment and Plan Termination
(a) Except by the written consent of 75% of Plan Participants
actually or potentially affected thereby and the approval of the
Board of Directors, the Plan may not be terminated or amended in
any way which would reduce the benefits payable hereunder or
reduce or eliminate the funding provided for in Article IV until
the first regularly scheduled meeting of the Board of Directors
held after June 30, 2011.
May 18, 1994 III-1
(b) The Board of Directors, without the consent of the
Plan Participants, may amend the Plan to improve or increase
the benefits payable hereunder at any time.
(c) If the Plan is terminated, all Participants, including
beneficiaries receiving benefits, will be entitled to their
Accrued Benefits under the Plan. In such event the Board of
Directors may, at its sole discretion, elect any one or more of
the following alternatives to satisfy the Company's obligations
to such Participants or beneficiaries, provided that the method
so elected shall be applied uniformly to all Participants or
beneficiaries:
(i) Provide benefit payments in accordance with the terms
of the Plan, at the times specified in the Plan.
(ii) Purchase immediate or deferred annuities.
(iii) Make lump sum payments equal to the present value of
accrued benefits for amounts less than $25,000 adjusted annually
beginning July 1, 1995, for changes in the Consumer Price Index.
May 18, 1994 III-2
3.3 Assignment of Benefits
A Participant may not, either voluntarily or involuntarily,
assign, anticipate, alienate, commute, pledge or encumber any
benefits to which he is or may become entitled to under the Plan
nor may the same be subject to attachment or garnishment by any
creditor of a Participant.
3.4 Not An Employment Agreement
Nothing in the establishment of the Plan is to be construed as
giving any Participant the right to be retained in the employ
of the Company.
3.5 Merger, Consolidation or Transfer
In the event that the Company shall, pursuant to action by its
Board of Directors, at any time propose to merge into, consolidate
with or sell or otherwise transfer all or substantially all of
its assets to another corporation and provision is not made
pursuant to the terms of such transaction for the continuation
of this Plan by the surviving, resulting or acquiring corporation
or for the substitution of a comparable plan hereto, the provisions
of this Plan shall remain in effect.
July 17, 1991 III-3
ARTICLE IV
FUNDING
4.1 Establishment of Irrevocable Trust
The Company shall establish an irrevocable trust of which the
Company is the owner for federal income tax purposes (within the
meaning of Sections 671 through 677 of the Internal Revenue Code
of 1986) (the "Trust") and fund the Trust as hereinafter provided
in order to provide a source from which to satisfy the Company's
obligations to Participants under this Plan.
4.2 Amount of Funding
The Company shall make such contributions to the Trust as the
Board of Directors from time to time determines appropriate.
4.3 Actuarial Assumptions and Method
The Plan's actuary shall use the following assumptions and
methods when advising the Board of Directors with regard to
contributions to the Trust:
(a) Mortality:
1983 Group Annuity Mortality Table for periods after benefits
have commenced, or are assumed to have commenced. No mortality
will be assumed prior to the assumed retirement age for benefits
not yet in payment status.
May 18, 1994 IV-1
(b) Return on Investment:
Assets are assumed to earn, the liabilities are discounted
at, eight percent (8%) per year.
(c) Assumed Retirement Age:
For Participants whose benefits are not in payment status as
of July 1 of each year, the Assumed Retirement Age will be age
60, or their current age if older. For beneficiaries, the Assumed
Retirement Age is the beneficiary's age on the date their deceased
spouse would have reached 60, or their current age if their
spouse would have already been older than age 60.
(d) Annual Pay Increases:
Eight percent (8%) per year.
(e) Employee Turnover:
None.
May 18, 1994 IV-2
(f) Social Security Increases:
Social security benefits are assumed to increase 5% per year.
(g) IRC Limits:
The Internal Revenue Code (IRC) section 415 and section 401(a)(17)
limits are assumed to increase 5% per year.
(h) Defined Contribution Plan Offset:
Annuity equivalent of projected account balance assuming an
annual earnings rate of 8.0%; Profit Sharing Plan contributions
of 8.0% of pay; annual TRIP contributions of $500 (no inflation);
and assuming no further PAYSOP contributions are made.
(i) Actuarial Cost Method:
The Entry Age Normal Cost Method will be used. The unfunded
actuarial liability as of each July 1 will be amortized over
ten years.
May 18, 1994 IV-3