SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934
[Amendment No. ]
Filed by the Registrant /x/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/x/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c)
or
Section 240.14a12
THE PROCTER & GAMBLE COMPANY
(Name of Registrant as Specified in Its Charter)
TERRY L. OVERBEY
(Name of Person(s) Filing Proxy Statement
Payment of Filing Fee (Check the appropriate box):
/x/$125 per Exchange Act Rules 0-11)(c)(1)(ii), 14a-6(j)(2).
/ /$500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
/ /Fee computed on table below per Exchange Act Rules 14a-
6(i)(4) and 0-11. 1) Title of each class of securities
to which transaction applies:
..........................................................
2) Aggregate number of securities to which transaction
applies:
..........................................................
3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11:*
..........................................................
4) Proposed maximum aggregate value of transaction:
..........................................................
*Set forth the amount on which the filing fee is calculated
and state how it was determined.
/ /Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.
1) Amount Previously Paid:________________________________
2) Form Schedule or Registration Statement No.:___________
3) Filing Party:__________________________________________
4) Date Filed:____________________________________________
(P&G)
T H E P R O C T E R & G A M B L E C O M P A N Y
NOTICE OF ANNUAL MEETING
AND
PROXY STATEMENT
ANNUAL MEETING OF
SHAREHOLDERS
OCTOBER 10, 1995
(P&G)
THE PROCTER & GAMBLE COMPANY
PO Box 599
Cincinnati, Ohio 45201-0599
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
September 1, 1995
The annual meeting of shareholders of The Procter &
Gamble Company will be held at the General Offices of the
Company, Two Procter & Gamble Plaza, Cincinnati, Ohio 45202
3314 on Tuesday, October 10, 1995 at 12 o'clock noon,
Eastern Daylight Time. Attendance at the annual meeting
will be limited to shareholders, those holding proxies from
shareholders and representatives of the press and financial
community. If you wish to attend the meeting but your
shares are held in the name of a broker, trust, bank or
other nominee, you should bring with you a proxy or letter
from the broker, trustee, bank or nominee confirming your
beneficial ownership of the shares.
The purposes of this meeting are:
A. To hear the reading of the minutes of the annual
meeting of shareholders held October 11, 1994 and to
act thereon if they are incorrectly recorded;
B. To receive reports of officers;
C. To elect six members of the Board of Directors with
terms expiring at the annual meeting in 1998, as
described at pages 3-4 in the accompanying proxy
statement;
D. To consider and act upon a proposal described at page
18 in the proxy statement to ratify the appointment
of independent auditors;
E. To consider and act upon a proposal described at page
19 in the proxy statement to ratify the amendment of
The Procter & Gamble 1993 Non-Employee Directors'
Stock Plan;
F. To consider and act upon, if presented at the
meeting, proposals submitted by certain shareholders
as described at pages 20-26 in the proxy statement;
and
G. To consider such other matters as may properly come
before the meeting.
Shareholders of record at the close of business on
Friday, August 11, 1995 will receive notice of and be
entitled to vote at the meeting.
Shareholder attendees who are hearing-impaired should
identify themselves on registration at the meeting so they
can be directed to a special section where an interpreter
will be available.
A copy of the annual report of the Company for the fiscal
year ended June 30, 1995 has been mailed to each shareholder
of record as of August 11, 1995.
SHAREHOLDERS ARE URGED TO EXECUTE THE ENCLOSED PROXY AND
RETURN IT PROMPTLY, WHETHER OR NOT THEY EXPECT TO ATTEND THE
MEETING. ANY PROXY NOT DELIVERED AT THE MEETING SHOULD BE
MAILED TO REACH THE COMPANY'S PROXY TABULATOR, CHEMICAL
BANK, CHURCH STREET STATION, PO BOX 24966, NEW YORK, NY
10242-4966 BY 9:00 A.M. ON TUESDAY, OCTOBER 10, 1995 (USE
THE ENCLOSED SPECIAL POSTAGE-PAID ENVELOPE FOR MAILING IN
THE UNITED STATES).
By order of the Board of Directors,
TERRY L. OVERBEY Secretary
PROXY STATEMENT
THE PROCTER & GAMBLE COMPANY
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD OCTOBER 10, 1995
SOLICITATION AND REVOCATION OF PROXIES
The enclosed proxy is being solicited by the Board of
Directors of the Company. In addition to the solicitation
by mail, proxies may be solicited in person or by telephone
or telegraph; such solicitation on behalf of the Proxy
Committee of the Board may be made by Directors, officers
and regular employees of the Company and by representatives
of Georgeson & Company Inc., a proxy solicitation firm. The
Company has agreed to pay Georgeson & Company Inc. a fee of
$16,000, plus reasonable expenses, for its services in this
regard. Any proxy given pursuant to this solicitation may
be revoked by notice from the person giving the proxy at any
time before it is exercised. Any such notice of revocation
should be provided in writing signed by the shareholder in
the same manner as the proxy being revoked and delivered to
the Company's proxy tabulator, Chemical Bank, Church Street
Station, PO Box 24966, New York, NY 10242-4966.
The expense of making the solicitation will consist of
preparing and mailing the proxies and proxy statements; any
expenses incurred by Company representatives in making the
contacts referred to above; charges of brokerage houses and
other custodians, nominees or fiduciaries for forwarding
documents to security owners; costs of returning the
proxies; and fees of Chemical Bank for tabulating the
responses. These are the only contemplated expenses of
solicitation, and they will be paid by the Company.
VOTING RIGHTS
The holders of record of the Company's Common Stock and
Series A and B ESOP Convertible Class A Preferred Stock at
the close of business on Friday, August 11, 1995 are
entitled to vote on matters to come before the meeting. On
that date, 686,947,278 shares of Common Stock, 33,110,146
shares of Series A ESOP Convertible Class A Preferred Stock
and 19,142,418 shares of Series B ESOP Convertible Class A
Preferred Stock were issued and outstanding. As provided in
the Amended Articles of Incorporation, each share of Common
and Series A and B ESOP Convertible Class A Preferred Stock
is entitled to one vote.
Participants in The Procter & Gamble Shareholder
Investment Program, the successor to The Procter & Gamble
Dividend Reinvestment Plan and The Procter & Gamble Stock
Investment Program, are entitled to vote shares of the
Company's Common Stock held for their account under that
Program pursuant to an omnibus proxy executed in their favor
by the Custodian of such Program, Morgan Guaranty Trust
Company of New York.
Participants in The Procter & Gamble Profit Sharing Trust
and Employee Stock Ownership Plan and The Procter &
Gamble/Noxell Transitional Plan have the right to instruct
the Trustees of any Trust under such Plans in which they are
participating as to how to vote shares of stock allocated to
their accounts. The Plans also provide that the Trustees of
each Trust shall vote any shares allocated to accounts of
participants as to which such instructions have not been
received in direct proportion to the voting of allocated
shares as to which voting instructions have been received.
In addition, the Plans provide that the Trustees shall vote
unallocated shares of stock held in such Trust in direct
proportion to the voting of allocated shares in such Trust
as to which voting instructions have been received.
The vote required for the election of Directors and
approval of the other proposals is set forth in the
discussion of each item to be voted upon.
ELECTION OF DIRECTORS
The Regulations of the Company provide that the Board of
Directors shall consist of three classes of Directors with
overlapping three-year terms. One class of Directors is to
be elected each year with terms extending to the third
succeeding annual meeting after such election. The
Regulations provide that the Board shall maintain the three
classes so as to be as nearly equal in number as the then
total number of Directors permits.
Pursuant to the provisions of the Regulations described
above, there are six Directors of the Company whose terms
expire at the annual meeting in 1995. The six Directors
whose terms are expiring in 1995 are described in the
section immediately below. It is the Board's intention that
these six persons will be nominated for new terms extending
to the annual meeting in 1998 and until their successors are
duly elected. Proxies received in response to this
solicitation will be voted, unless such authority is
withheld, in favor of the election of these six nominees. In
the election of members of the Board of Directors, the six
candidates receiving the most votes will be elected. While
there is no reason to believe that any of the nominees will,
prior to the date of the meeting, refuse or be unable to
accept the nomination, should any nominee or nominees so
refuse or become unable to accept, it is the intention of
the persons named in the proxy to vote for such other person
or persons as the Directors may recommend.
Directors whose terms expire at the annual meetings in
1996 and 1997 are described in separate sections below.
NOMINEES FOR ELECTION AS DIRECTORS WITH TERMS EXPIRING IN
1998
Joseph T. Gorman - Chairman and Chief Executive Officer, TRW
Inc. (electronic, automotive, industrial and aerospace
equipment). Director of TRW Inc. and Aluminum Company of
America; Director of the Company since 1993; member of
the Compensation, Executive and Finance Committees; age
57.
Jerry R. Junkins - Chairman, President and Chief Executive
Officer, Texas Instruments Incorporated (semiconductors,
defense electronic systems and other electronic
products). Director of Texas Instruments Incorporated,
Caterpillar, Inc. and 3M; Director of the Company since
1988; Chairman of the Audit Committee and member of the
Compensation and Executive Committees; age 57.
Lynn M. Martin - Professor, Davee Chair, J. L. Kellogg
Graduate School of Management, Northwestern University.
Director of Ameritech Corporation, Ryder Systems, Inc.,
TRW Inc., and Harcourt General Inc.; Director of the
Company since December 13, 1994; member of the Finance,
Nominating and Public Policy Committees; age 55.
John E. Pepper - Chairman of the Board and Chief Executive.
Director of Motorola, Inc. and Xerox Corporation;
Director of the Company since 1984; member of the
Executive Committee; age 57.
Ralph Snyderman, M.D. - Chancellor for Health Affairs, Dean,
School of Medicine at Duke University, and Chief
Executive Officer of Duke University Health System.
Director of Somatogen Inc.; Director of the Company since
June 13, 1995; member of the Audit, Nominating and Public
Policy Committees; age 55.
Robert D. Storey - Partner in the law firm of Thompson, Hine
and Flory, Cleveland, Ohio. Director of Bank One,
Cleveland, GTE Corporation and The May Department Stores
Company; Director of the Company since 1988; member of
the Audit, Nominating and Public Policy Committees; age
59.
All of the nominees for election as Directors with terms
expiring in 1998, except Ms. Martin and Mr. Storey, have
been executive officers of their respective employers for
more than the past five years. Ms. Martin has been a
Professor at Northwestern University since 1993. Prior to
that, Ms. Martin served as Secretary of Labor of the United
States from January, 1991 to January, 1993, following
service as a member of the U.S. House of Representatives.
Mr. Storey was a partner in the law firm of Burke, Haber &
Berick Co., L.P.A. and its successor firm, McDonald,
Hopkins, Burke & Haber Co., L.P.A., Cleveland, Ohio, for
more than five years prior to joining Thompson, Hine and
Flory on January 1, 1993.
Each of the nominees for election as Directors with terms
expiring in 1998 was elected a Director by the shareholders
at the annual meeting in 1992 except Mr. Gorman, Ms. Martin
and Dr. Snyderman. Mr. Gorman was elected a Director in
1993 to fill a vacancy on the Board. Ms. Martin was elected
a Director on December 13, 1994 to succeed Robert A. Hanson
upon his retirement from the Board. Dr. Snyderman was
elected a Director on June 13, 1995 to succeed Joshua
Lederberg upon his retirement from the Board.
DIRECTORS WITH TERMS EXPIRING IN 1996
Donald R. Beall - Chairman and Chief Executive Officer,
Rockwell International Corporation (electronics,
aerospace, automotive components, industrial automation
and graphics systems). Director of Rockwell
International Corporation, Amoco Corporation and Times
Mirror Company; Director of the Company since 1992;
member of the Compensation, Executive and Finance
Committees; age 56.
Gordon F. Brunner - Senior Vice President. Director of the
Company since 1991; age 56.
Richard B. Cheney - Senior Fellow, American Enterprise
Institute for Public Policy Research, Washington, DC.
Director of Blount Inc., Halliburton Co., IGI Inc.,
Morgan Stanley & Co., Incorporated, TRW Inc., Union
Pacific Corporation and U S WEST, Inc.; Director of the
Company since 1993; member of the Audit, Compensation and
Public Policy Committees; age 54.
Harald Einsmann - Executive Vice President. Director of
Thorn EMI plc; Director of the Company since 1991; age
61.
Durk I. Jager - President and Chief Operating Officer.
Director of the Company since 1989; age 52.
Charles R. Lee - Chairman and Chief Executive Officer, GTE
Corporation (telecommunication services). Director of
GTE Corporation, United Technologies Corporation and USX
Corporation. Director of the Company since 1994; member
of the Audit, Nominating and Public Policy Committees;
age 55.
All of the Directors with terms expiring in 1996, except
Mr. Cheney, have been executive officers of their
respective employers for more than the past five years.
Mr. Cheney has been a Senior Fellow at the American
Enterprise Institute for Public Policy Research,
Washington, DC, since January, 1993. Prior to that, Mr.
Cheney was Secretary of Defense of the United States from
March 17, 1989 to January 20, 1993, following service as
a member of the U.S. House of Representatives since 1978.
Each of the Directors with terms expiring in 1996 was
elected a Director by the shareholders at the annual
meeting in 1993 except Mr. Lee. Mr. Lee was elected a
Director in 1994 to fill a vacancy on the Board.
DIRECTORS WITH TERMS EXPIRING IN 1997
David M. Abshire, Ph.D. - President, Center for Strategic
and International Studies, Washington, DC. Director of
Ogden Corporation; Director of the Company since 1987;
Chairman of the Public Policy Committee and member of the
Audit and Nominating Committees; age 69.
Edwin L. Artzt - Retired Chairman of the Board and Chief
Executive. Director of American Express Company, Delta
Air Lines, Inc., GTE Corporation and Teradyne, Inc.;
Director of the Company from 1972 to 1975 and since 1980;
Chairman of the Executive Committee and member of the
Finance and Public Policy Committees; age 65.
Norman R. Augustine - President, Lockheed Martin
Corporation (aerospace, electronics, information
management, materials and energy systems and products).
Director of Lockheed Martin Corporation and Phillips
Petroleum Company; Director of the Company since 1989;
Chairman of the Compensation Committee and member of the
Executive and Finance Committees; age 60.
Richard J. Ferris - Co-Chairman, Doubletree Corporation.
Director of Doubletree Corporation and Amoco Corporation;
Director of the Company since 1979; Chairman of the
Finance Committee and member of the Executive and
Nominating Committees; age 59.
John F. Smith, Jr. - Chief Executive Officer and President,
General Motors Corporation (automobile and related
businesses). Director of General Motors Corporation;
Director of the Company since June 13, 1995; member of
the Audit, Nominating and Public Policy Committees; age
57.
Marina v.N. Whitman, Ph.D. - Professor of Business
Administration and Public Policy, University of
Michigan. Director of Aluminum Company of America,
Browning-Ferris Industries, Inc., Chemical Banking
Corporation and its subsidiary Chemical Bank, and Unocal
Corporation; Director of the Company since 1976;
Chairman of the Nominating Committee and member of the
Compensation and Finance Committees; age 60.
All of the Directors with terms expiring in 1997, except
Mr. Ferris and Dr. Whitman, have been, or were prior to
retirement, executive officers of their respective employers
for more than the past five years. Prior to his association
with Doubletree Corporation (formerly Guest Quarters Hotels
LP) in October, 1992, Mr. Ferris was a private investor for
more than five years following his resignation as Chairman
and Chief Executive Officer of UAL Corporation (formerly
Allegis Corporation - travel related services) in June,
1987. Prior to her appointment at the University of
Michigan effective September 1, 1992, Dr. Whitman was Vice
President and Group Executive, General Motors Corporation,
for more than five years.
Each of the Directors with terms expiring in 1997 was
elected a Director by the shareholders at the annual meeting
in 1994 except Mr. Smith. Mr. Smith was elected a Director
on June 13, 1995 to succeed John G. Smale effective upon his
retirement from the Board.
COMMITTEES OF THE BOARD
The EXECUTIVE COMMITTEE (established in 1905). As
prescribed by the Regulations of the Company, the Committee
has the authority of the Board of Directors for the
management of the business and affairs of the Company
between meetings of the Board.
The AUDIT COMMITTEE (established in 1940) met five times
during the fiscal year ended June 30, 1995 with
representatives of Deloitte & Touche LLP and financial
management to review accounting, control, auditing and
financial reporting matters. The Committee is responsible,
among other things, for recommending to the Board the firm
of independent auditors to be retained, approving
professional services rendered and reviewing the scope of
the annual audit and reports and recommendations submitted
by the independent audit firm, which regularly meets
privately with the Committee.
The NOMINATING COMMITTEE (established in 1972) met six
times during the fiscal year ended June 30, 1995. The
Nominating Committee is responsible for establishing the
criteria for and reviewing the qualifications of individuals
for election as members of the Board. When a vacancy on the
Board occurs or is anticipated the Committee presents its
recommendation of a replacement Director to the Board. The
Committee makes recommendations as to exercise of the
Board's authority to determine the number of its members,
within the limits provided by the Regulations of the
Company. The Committee also has responsibility for
reviewing issues of corporate governance and making
recommendations thereon to the Board. Shareholders wishing
to communicate with the Nominating Committee concerning
potential Director candidates may do so by corresponding
with the Secretary of the Company and including the name and
biographical data of the individual being suggested.
The COMPENSATION COMMITTEE met five times during the
fiscal year ended June 30, 1995. The Compensation Committee
(or its predecessor Committees, which served the same
function under different names and which were established
commencing in 1960) is responsible for fixing or agreeing to
the salary and other compensation of all principal officers
of the Company elected by the Board, and advising the Chief
Executive on policy matters concerning officers'
compensation. The Compensation Committee is also
responsible for administration of The Procter & Gamble 1992
Stock Plan as approved at the annual meeting of shareholders
on October 13, 1992. The authority of the Committee under
the Plan includes selection of key employees for
participation in the Plan and determination of numbers of
stock options and stock appreciation rights and amounts of
restricted and unrestricted stock to be awarded to such
employees pursuant to the Plan. The Committee is also
charged with on-going administration and interpretation of
the Plan and of its predecessor plans, The Procter & Gamble
1983 Stock Plan and the Plan for Use of Shares in Payment of
Remuneration, both of which have been superseded as to new
grants by The Procter & Gamble 1992 Stock Plan.
The FINANCE COMMITTEE (established in 1994) met two times
during the fiscal year ended June 30, 1995. The Finance
Committee is responsible for reviewing and making
recommendations to the Board on the following matters: the
Company's annual financing plans; the Company's global
financing objectives and principles, financial strategies
and capital structure; funding and oversight of pension and
benefit plans; the Company's insurance program; and, after
separately being cleared in principle with the full Board,
the financial implications of major investments,
restructurings, joint ventures, acquisitions and
divestitures.
The PUBLIC POLICY COMMITTEE (established in 1994) met two
times during the fiscal year ended June 30, 1995. The
Public Policy Committee is responsible for reviewing
activities of importance to the Company and its
stakeholders, including employees, consumers, customers,
suppliers, shareholders, governments and local communities.
The Public Policy Committee reviews equal employment
opportunity and advancement, environmental quality, employee
safety and health, product safety, contributions and
community relations.
CERTAIN ADDITIONAL INFORMATION CONCERNING THE BOARD OF
DIRECTORS
During the fiscal year ended June 30, 1995 a total of ten
meetings of the Board and 21 meetings of Committees of the
Board were held. Average attendance at these meetings by
nominees and incumbents serving as Directors during the past
year was in excess of 94%.
During the fiscal year ended June 30, 1995 Directors who
were not employees of the Company were paid retainers at the
rate of $30,000 per year, plus a fee of $1,000 for each
Board or Board Committee meeting attended. In addition, non
employee Directors who served on Board Committees were paid
retainers at the rate of $5,000 (for Committee Chairmen) or
$3,000 (for Committee members) per year. Non-employee
Directors were also granted a stock option on February 28,
1995 with a term of ten years to purchase 1,000 shares of the
Company's Common Stock at an exercise price of $66.25,
the fair market value of the Common Stock on the date of
grant. The Company does not pay directors' fees to
Directors who are employees of the Company. Directors who
are not employees of the Company are also provided insurance
coverage in the amount of $750,000 payable in the event of
accidental death or disability occurring while traveling on
Company business. Such Directors also receive reimbursement
for expenses of such travel.
Fees otherwise payable to a Director who has elected to
come under The Procter & Gamble Deferred Compensation Plan
for Directors are credited to such Director's account but
not funded. Interest is credited to such an account at the
end of each month at the prime rate then in effect at Morgan
Guaranty Trust Company of New York. Such a deferred
compensation account is payable either upon the retirement
of the Director or after a term of years specified by the
electing Director, at the Director's option, elected in
advance of being earned. Directors may also elect to
convert a portion or all of their fees for services as a
Director into Common Stock of the Company pursuant to The
Procter & Gamble 1993 Non-Employee Directors' Stock Plan.
Directors who are not employees of the Company are
covered by a retirement plan pursuant to which retirement
benefits are payable to any such Director who has served at
least five years since original election to the Board. The
annual retirement benefit under this plan is specified as
the amount of the annual retainer for Board service in
effect at the time of retirement, payable quarterly for as
many calendar quarters following retirement as the retired
Director served prior to retirement, or until death,
whichever occurs first. This retirement benefit is partly
in recognition of the availability of retired Directors as a
continuing resource for consultation by the Chief Executive
as appropriate. There are no survivor benefits payable
under this plan.
Effective January 1, 1992, as part of its overall program
of support for charitable institutions and as an aid in
attracting and retaining qualified Directors, the Board of
Directors established a Charitable Gifts Program funded by
life insurance on the lives of the non-employee members of
the Board of Directors and the Chairman of the Board and
Chief Executive. Directors derive no financial benefit from
the Program since all insurance proceeds and charitable
deductions accrue solely to the Company. Under this Program
the Company intends to make charitable contributions of up
to a total of $1 million following the death of any such
participant with such contribution to be allocated in
accordance with each participant's recommendations among up
to five charitable organizations. The following current and
retired Directors of the Company are participants in this
Program: David M. Abshire, Edwin L. Artzt, Norman R.
Augustine, Donald R. Beall, Theodore F. Brophy, Richard B.
Cheney, Richard J. Ferris, Joseph T. Gorman, Robert A.
Hanson, Jerry R. Junkins, Joshua Lederberg, Charles R. Lee,
Walter F. Light, Lynn M. Martin, John E. Pepper, David M.
Roderick, John G. Smale, John F. Smith, Jr., Ralph
Snyderman, Robert D. Storey and Marina v.N. Whitman.
Beneficiary organizations designated under this Program must
be tax-exempt under Section 501(c)(3) of the Internal
Revenue Code, and donations ultimately paid by the Company
will be deductible against federal and other income taxes
payable by the corporation in accordance with the tax laws
applicable at the time. Because of such deductions and use
of insurance, the Program should result in little or no long
term cost to the Company under present law.
REPORT OF THE COMPENSATION COMMITTEE OF THE
BOARD OF DIRECTORS ON EXECUTIVE COMPENSATION
OVERVIEW
The Compensation Committee of the Board of Directors (the
"Committee") consists entirely of outside, non-employee
Directors. The Committee establishes and regularly reviews
executive compensation levels and policies, and authorizes
short- and long-term awards in the form of cash or stock.
All awards are made within the authority of the Additional
Remuneration Plan, which dates back to 1949, and The Procter
& Gamble 1992 Stock Plan.
Compensation for executives is based on the principles
that compensation must (a) be competitive with other quality
companies in order to help attract, motivate and retain the
talent needed to lead and grow Procter & Gamble's business;
and (b) provide a strong incentive for key managers to
achieve the Company's goals.
Procter & Gamble has an enviable record of recruiting,
training and developing its executive talent from within -an
achievement few other corporations have matched. In
addition, the Company's long-term performance, as measured
by sales and earnings growth and other relevant measures,
has been very positive. This record suggests the principles
that drive our compensation program have, over time,
delivered the desired results.
Executive compensation is based on performance against a
combination of financial and non-financial measures
including business results and developing organization
capacity. In addition, employees are expected to uphold the
fundamental principles embodied in the Company's Statement
of Purpose and Environmental Quality Policy. These include
a commitment to integrity, doing the right thing, maximizing
the development of each individual, developing a diverse
organization, and continually improving the environmental
quality of our products and operations. In upholding these
financial and non-financial objectives, executives not only
contribute to their own success, but also help ensure our
business, employees, shareholders and the communities in
which we live and work will prosper.
ELEMENTS OF EXECUTIVE COMPENSATION
It is the Company's long-standing policy that variable,
at-risk compensation, both annual and long-term, should make
up a significant portion of executive compensation.
Depending upon the level of the executive, the Company
targets between 40% and 60% of executive compensation (other
than retirement credits) to be variable, at-risk elements.
When the Company achieves solid earnings growth and stock
price appreciation, executive compensation levels will equal
or exceed the middle compensation range for a comparative
group of companies. This group includes a combination of
leading consumer products companies and other corporations
of size and reputation comparable to Procter & Gamble (and
with which Procter & Gamble must compete in hiring and
retaining the employees it needs). The composition of this
group is updated periodically.
The Committee believes the compensation levels of the
Company's executive officers are competitive and in line
with those of comparable companies.
Annual compensation elements include base salary and two
forms of incentives, the Performance Bonus Award and the
Profit Incentive Award. Long-term incentive compensation
includes stock options and an Earnings Progress Award
related to real (greater than average growth of the economy)
earnings per share growth.
In addition, executives participating in The Procter &
Gamble Profit Sharing Trust and Employee Stock Ownership
Plan receive retirement awards in the form of stock
restricted (non-transferable and subject to forfeiture)
until retirement, or in some cases, cash deferred until
retirement. These awards make up the difference between the
Internal Revenue Code limit on contributions that can be
made to that Plan and what would otherwise be contributed by
the Company to the executive's account. The Procter &
Gamble Profit Sharing Trust and Employee Stock Ownership
Plan is a qualified plan providing retirement benefits for
U.S.-based employees.
ANNUAL COMPENSATION
Annual compensation consists of base salary and two forms
of annual incentives.
Executive pay ranges are established based on a careful
examination of survey data from a comparative group of
companies gathered by a leading consulting firm specializing
in executive compensation. A number, but not all, of these
companies are included in the line of business index shown
on the performance graph. Executive compensation ranges are
targeted to be in the middle of this group of companies.
Within the established range structure, the Committee
approves changes in amounts of executive compensation based
on individual performance evaluations and time in position.
One annual incentive award, the Performance Bonus Award,
is based on an evaluation of each executive's individual
performance. A separate annual award, the Profit Incentive
Award, is tied to the net profit achievement of the Company
and/or certain business units as compared to preset goals.
If these profits, after any adjustments for unusual items,
are not delivered, no awards are made.
Senior management and the Committee believe that
differences in performance should result in significantly
different levels of annual cash compensation.
LONG-TERM INCENTIVES
Long-term incentives consist of stock options and
Earnings Progress Awards, with the latter related to
earnings per share growth. Both types of awards serve to
focus executive attention on the long-term performance of
the business.
The Company makes stock option grants annually at no less
than 100% of the market price on the date of grant. Stock
appreciation rights (SARs) are granted instead of options in
countries where the holding of foreign stock is restricted.
These grants and rights are fully exercisable after one year
and have a ten-year life. The number of shares normally
awarded is based on a formula that uses a multiple of annual
compensation divided by the average stock price over the
past five years. Option awards will vary in size based on
position level (more senior managers receive a higher
multiple) and performance evaluation ratings. These awards
are designed to be competitive with awards made by companies
in the survey group. The number of option shares currently
held by each executive is not considered in determining
awards. Grants are only made to employees who have
demonstrated a capacity for contributing in a substantial
way to the success of the Company. Stock options encourage
these managers to become owners of the business, which helps
to further align their interests with the shareholders.
Options have no value unless the price of the Company's
stock increases, since they are exercisable only by the
employee and cannot be transferred except in case of death.
To support the Company's desire to increase management's
stock ownership, the Committee approved a share retention
program for managers participating in the stock option
program. Specific guidelines require optionees to achieve
and then retain a multiple of their base salary in shares of
Procter & Gamble stock. Higher level managers are required
to retain a larger multiple. The Chief Executive's multiple
is three times base salary. Stock options which lead to
equity ownership in the Company provide a direct link
between executive compensation and shareholder value
creation.
Earnings Progress Awards related to real growth in
earnings per share are made to only our highest level
managers. These awards are made only when earnings per
share, after any adjustments for unusual items, increase
over the most recent three-year period at a rate in excess
of the Gross Domestic Product Implicit Price Deflator ("GDP
deflator") which measures the overall growth in the economy.
For the purpose of calculating awards under this program,
1994-95 earnings per share was lowered to remove the
positive earnings impact arising from the strategic
restructuring and other related business actions taken in
fiscal year 1992-93 as committed to by the Committee and was
increased to remove the one-time charge to earnings
resulting from the Japan earthquake.
Awards can range from 0% to 100% of the Performance Bonus
Award. No awards are paid if the Company's three-year
average earnings per share growth does not exceed the three
year average GDP deflator movement by at least one percent.
Also, the Company's latest fiscal year's earnings per share,
adjusted for unusual items, must exceed that of the prior
year. These awards are generally made in the form of stock,
restricted for a term of years or until retirement.
The Committee is continuing its review of the new federal
tax legislation limiting the deduction available for
compensation paid to the Company's named executives under
Internal Revenue Code Section 162(m). Although the Internal
Revenue Service has not yet issued final regulations
interpreting Section 162(m), the Committee believes that
option and SAR grants under the 1992 Stock Plan meet the
requirements for deductible compensation. The Committee
granted Mr. Pepper's and Mr. Jager's Performance Bonus and
Earnings Progress Awards and a portion of their Profit
Incentive Awards in the form of stock options or retirement
restricted stock in order to avoid the loss of deductibility
related to such compensation. With these adjustments, the
potential tax liability from the loss of deductibility is
nominal.
COMPENSATION OF THE CHIEF EXECUTIVE
The compensation of Edwin L. Artzt, Chairman of the Board
and Chief Executive during fiscal year 1994-95, consists of
the same elements as for other senior executives, namely
base salary, annual incentives, stock options, and awards
for real growth in earnings per share.
In determining Mr. Artzt's compensation package, the
Committee reviewed the Company's financial and business
performance for 1994-95. This review was based on a number
of factors including sales, earnings, unit volume, market
share, profit margins, return on equity, growth in earnings,
and total shareholder return. The Committee does not assign
relative weights or rankings to each of these factors, but
instead makes a subjective determination based on
consideration of all such factors. In addition, the
Committee also noted significant progress in the Company's
long-term initiatives. Profit centers in all parts of the
business continue to successfully meet their commitment to
bring savings to the bottom line as a result of
restructuring efforts. The Company's strategy of offering
consumers products providing better value continues to move
ahead worldwide. The Company has made strategic investments
in acquisitions and joint ventures such as Giorgio and VP
Schickedanz as well as a number of brand expansions and new
brands that will support the Company's long-term growth
expectations. 1994-95 will be a record year for unit
volume, sales and earnings (despite the Kobe earthquake
charge). Profit margins are at the highest level in 45
years. Out of 13 key global categories, market share is up
in 10.
Mr. Artzt's base salary was established based on the
Committee's evaluation of his performance toward the
achievement of the Company's financial, strategic and other
goals, his length of service as Chief Executive, and
competitive chief executive officer pay information. His
Performance Bonus Award was based on the Committee's overall
evaluation of his individual performance. Although the
final amount has not yet been determined, it is expected
that Mr. Artzt will qualify for a Profit Incentive Award
attributable to 1994-95 in the amount of approximately
$612,000.
The Chief Executive's Earnings Progress Award reflecting
real growth in earnings per share, after adjustments for
unusual items, over the most recent three fiscal years was
calculated on the same basis as for all other covered
executives. It was equal to 50.7% of his Performance Bonus
Award.
Mr. Artzt's 1995 stock option grant, as with other
optionees, was based on competitive survey data and the
Committee's judgment of Mr. Artzt's strategic contributions
to the long-term success of the Company.
* * *
Mr. Richard B. Cheney was elected as a member of the
Compensation Committee on July 11, 1995, and is not listed
as a signatory of the Report of the Compensation Committee
because he did not participate in any matters relating to
compensation awarded during 1994-95.
Norman R. Augustine, Chairman
Donald R. Beall Jerry R. Junkins
Joseph T. Gorman Marina v.N.Whitman
EXECUTIVE COMPENSATION TABLES
The following tables and notes present the compensation
provided by the Company to its Chief Executive officer, and
to each of the Company's five most highly compensated
executive officers, other than the Chief Executive, for
services rendered in all capacities to the Company for the
fiscal years ended June 30, 1995, 1994 and 1993.
SUMMARY COMPENSATION TABLE
(Dollar figures shown in thousands)
Annual Compensation
Name and __________________________________
Principal Other Annual
Position<F1> Year Salary Bonus<F2> Compensation<F3>
___________ ____ ______ ________ _______________
Edwin L. Artzt 1994-95 $1,340.0 $1,893.0 $72.2<F7>
Chairman of the 1993-94 1,270.0 1,020.0 0
Board and Chief 1992-93 1,137.5 981.3 0
Executive
John E. Pepper 1994-95 $910.0 $50.8<F9> $0
President 1993-94 910.0 704.0 0
1992-93 835.0 645.3 0
Durk I. Jager 1994-95 $760.0 $218.3<F10> $0
Executive Vice 1993-94 672.5 574.6 (28.6)<F11>
President 1992-93 576.7 444.4 (32.7)<F11>
Harald Einsmann 1994-95 $582.5 $524.9 $537.5<F12>
Group Vice 1993-94 565.0 463.8 249.9<F12>
President 1992-93 512.5 465.2 440.5<F12>
Wolfgang C. Berndt 1994-95 $555.0 $293.7 $318.0<F12>
Group Vice 1993-94 507.8 336.8 314.8<F12>
President 1992-93 490.0 380.6 242.5<F12>
Gordon F. Brunner 1994-95 $500.0 $400.0 $0
Senior Vice 1993-94 475.0 372.4 0
President 1992-93 450.0 290.9 0
Long-Term Compensation
______________________
Awards
_____________________________________
Securities
Name and Restricted Underlying
Principal Stock Options/ All Other
Position(1) Awards<F4><F5> SARs Compensation<F6>
___________ ____________ ___________ _______________
Edwin L. Artzt <F8> 70,000 $353.3
Chairman of the $255.8 64,000 334.9
Board and Chief 262.8 61,000 301.2
Executive
John E. Pepper $571.3 48,000 $240.0
President 160.7 45,000 239.1
174.5 48,000 223.5
Durk I. Jager $228.7 38,000 $189.4
Executive Vice 124.2 35,000 168.8
President 122.0 29,000 145.4
Harald Einsmann $84.0 25,300 $290.1
Group Vice 55.8 24,000 256.5
President 67.3 22,000 237.1
Wolfgang C. Berndt $111.5 22,000 $335.7
Group Vice 44.2 20,000 319.7
President 55.0 22,000 257.8
Gordon F. Brunner $126.8 19,800 $130.9
Senior Vice 82.2 18,000 125.4
President 79.9 20,000 118.7
<FN>
<F1> Effective July 1, 1995, Mr. Artzt retired as Chairman of the Board
and Chief Executive; Mr. Pepper was elected Chairman of
the Board and Chief Executive; Mr. Jager was elected
President and Chief Operating Officer; and Messrs.
Einsmann and Berndt were elected Executive Vice
Presidents.
<F2> Although the final amount of the Profit Incentive Award for
fiscal 1994-95 has not yet been determined, the amount
of the expected award has been included.
<F3> Any perquisites or other personal benefits received from the
Company by any of the named executives were
substantially less than the reporting thresholds
established by the Securities and Exchange Commission
(the lesser of $50,000 or 10% of the individual's cash
compensation).
<F4> Restricted stock is awarded for growth in earnings per share in
excess of the GDP deflator over the most recent three-
year period as discussed in the Compensation Committee
Report. Restricted stock awarded to the named
executives for fiscal year 1994-95 will vest on June 20,
2000 or on retirement, except for Mr. Einsmann whose
award of 1,222 will vest on June 20, 1996. The
estimated value of the portion of Mr. Pepper's and Mr.
Jager's Profit Incentive Awards to be paid in restricted
stock (see footnotes 9 and 10 below) has also been
included.
<F5> The number and value (in thousands of dollars) of aggregate
restricted stock holdings of each of the named
executives on June 30, 1995 was: Mr. Artzt, 66,237
shares ($4,764.9); Mr. Pepper, 81,373 shares ($5,853.8);
Mr. Jager, 22,404 shares ($1,611.7); Mr. Einsmann, 0
shares ($0); Mr. Berndt, 3,794 shares ($272.9); Mr.
Brunner, 22,309 shares ($1,604.9). The value of the
restricted stock is determined by multiplying the total
shares held by each named executive by the average high
and low price on the New York Stock Exchange on June 30,
1995 ($71.9375). Dividends are paid on all restricted
Common Stock at the same rate as paid on the Company's
Common Stock.
<F6> All Other Compensation (in thousands of dollars) -- details for
1994-95:
</FN>
Profit Flexible
Sharing Compen- Inter-
and sation Imputed national
Related Program Income Assignment Total
Contri- Contri- Life Equalization All Other
Name butions butions Insurance Payments Compensation
_______________ _______ _______ _________ ____________ ____________
Edwin L. Artzt $295.7 $50.8 $6.9 $ 0 $353.3
John E. Pepper 200.8 36.4 2.8 0 240.0
Durk I. Jager 167.7 20.1 1.6 0 189.4
Harald Einsmann 0 0 2.0 288.1 290.1
Wolfgang C. Berndt 0 0 1.1 334.6 335.7
Gordon F. Brunner 110.4 19.0 1.5 0 130.9
<FN>
<F7> Pay for used vacation days at the time of Mr. Artzt's
retirement in accordance with Company policies
applicable to retirees generally.
<F8> Mr. Artzt's Earnings Progress Award of $430,950 would normally be
paid in stock restricted for a period of years or until
retirement. Since retirement occurred prior to the
award date, the award will be paid in cash and has been
included in the Bonus column.
<F9> The Committee authorized Mr. Pepper's Performance Bonus
Award of $540,000 to be paid in stock options to be
awarded in 1995-96 and a portion of his Profit Incentive
Award ($297,466 of the total estimated award of
$348,300) to be paid in stock restricted until
retirement. The stock option award will be reported in
the proxy statement for the annual meeting of
shareholders on October 8, 1996.
<F10> The Committee authorized Mr. Jager's Performance Bonus
Award of $415,000 to be paid in stock options to be
awarded in 1995-96 and a portion of his Profit Incentive
Award ($18,276 of the total estimated award of $236,550)
to be paid in stock restricted until retirement. The
stock option award will be reported in the proxy
statement for the annual meeting of shareholders on
October 8, 1996.
<F11> Reimbursement to the Company of foreign tax credits
attributable to previous tax equalization payments
pertaining to Mr. Jager's earlier service in Japan, as
paid in accordance with Company policies applicable
generally to managers assigned outside their home
countries.
<F12> Tax equalization payments to cover incremental taxes
required to be paid to Belgium for Mr. Einsmann and to
the United Kingdom for Mr. Berndt, as paid in accordance
with Company policies applicable generally to managers
assigned outside their home countries.
</FN>
OPTION GRANTS IN LAST FISCAL YEAR
(Dollar figures shown in thousands)
Number of % of Total
Securities Options
Underlying Granted to
Options Employees
Exercise or
Name Granted<F1> in Fiscal Year Base Price
____ __________ ______________ ____________
Edwin L. Artzt 70,000 1.8% $66.25
John E. Pepper 48,000 1.2% 66.25
Durk I. Jager 38,000 1.0% 66.25
Harald Einsmann 25,300 0.6% 66.25
Wolfgang C. Berndt 22,000 0.6% 66.25
Gordon F. Brunner 19,800 0.5% 66.25
Potential
Realizable Value
at Assumed Annual
Rates of Stock
Price Appreciation for
Option Term<F2>
______________________
Expiration (a) (b)
Name Date 5% 10%
____ __________ _________ _________
Edwin L. Artzt 2/28/05 $2,916.5 $7,391.0
John E. Pepper 2/28/05 1,999.9 5,068.1
Durk I. Jager 2/28/05 1,583.2 4,012.2
Harald Einsmann 2/28/05 1,054.1 2,671.3
Wolfgang C. Berndt 2/28/05 916.6 2,322.9
Gordon F. Brunner 2/28/05 825.0 2,090.6
<FN>
<F1> All of these options, which were granted pursuant to
The Procter & Gamble 1992 Stock Plan, were nonqualified,
were granted at market value on the date of grant, vest
on the first anniversary of the date of grant, and have a
term of ten years.
<F2> We recommend caution in interpreting the financial
significance of these figures. They are calculated by
multiplying the number of options granted by the
difference between a future hypothetical stock price and
the option exercise price and are shown pursuant to rules
of the Securities and Exchange Commission. They assume
the value of Company stock appreciates 5% or 10%
each year, compounded annually, for ten years (the life
of each option). They are not intended to forecast
possible future appreciation, if any, of such stock
price or to establish a present value of options. Also,
if appreciation does occur at the 5% or 10% per year
rate, the amounts shown would not be realized by the
recipients until the year 2005. Depending on inflation
rates, these amounts may be worth significantly less in
2005, in real terms, than their value today.
</FN>
AGGREGATED OPTION/STOCK APPRECIATION RIGHT (SAR)
EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES<F1>
(Dollar figures shown in thousands)
Shares
Acquired Number of Securities
on Value Underlying Unexercised
Name Exercise Realized<F2> Options/SARs at FY End
____ ________ ___________ ____________________________
Exercisable Unexercisable
___________ _____________
Edwin L. Artzt 13,080 $676.9 515,000 70,000
John E. Pepper 29,000 1,043.5 306,000 48,000
Durk I. Jager 0 0.0 210,000 38,000
Harald Einsmann 0 0.0 204,200 25,300
Wolfgang C. Berndt 28,000 1,118.3 92,000 22,000
Gordon F. Brunner 5,750 202.7 144,470 19,800
Value of Unexercised
In-the-Money
Name Options/SARs at FY End<F3>
____ _____________________________
Exercisable Unexercisable
___________ _____________
Edwin L. Artzt $16,268.6 $398.1
John E. Pepper 8,899.8 273.0
Durk I. Jager 6,503.8 216.1
Harald Einsmann 7,006.7 143.9
Wolfgang C. Berndt 2,033.4 125.1
Gordon F. Brunner 4,692.4 112.6
<FN>
<F1> 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 Company withhold shares otherwise issuable
under the option/stock appreciation right (SAR) with a
fair market value equal to such obligations.
<F2> Options/SARs were granted for terms of up to ten
years. The value realized on options/SARs exercised
during the last fiscal year represents the total gain
over the years the options/SARs were held by the
executive. If this total gain is divided by the average
number of years the options/SARs were held, a more
relevant annualized gain is produced. The annualized
gains (in thousands of dollars) on these option/SAR
exercises were as follows: Mr. Artzt, $75.2; Mr.
Pepper, $208.7; Mr. Jager, $0.0; Mr. Einsmann, $0.0; Mr.
Berndt, $223.7; and Mr. Brunner, $33.8.
<F3> The fair market value of the Company's Common Stock
on June 30, 1995 ($71.9375 per share) minus the exercise
price.
</FN>
RETIREMENT BENEFITS
Retirement benefits for U.S.-based executive officers are
provided primarily by The Procter & Gamble Profit Sharing
Trust and Employee Stock Ownership Plan. This is a defined
contribution plan. Under the rules set by the Securities
and Exchange Commission, these Company contributions are
included in the Summary Compensation Table in the "All Other
Compensation" column (see footnote (6) to such Table). In
addition, Mr. Einsmann and Mr. Berndt are enrolled in the
Pension Plan of Procter & Gamble GmbH (Germany) and Mr.
Jager is enrolled in the Pension Plan of Procter & Gamble
Benelux N.V. (Netherlands Branch), where they joined the
Company. Mr. Jager is also enrolled in the Supplemental
Retirement Plan for U.S.-based managers who previously
participated in pension plans of international subsidiaries.
These Plans are defined benefit plans funded by book
reserves or insurance contracts in order to pay retirement
benefits in cash. Given their age and service with the
Company, their estimated annual benefit, if payable in the
form of a straight annuity upon retirement at age 65, would
be $967,750 for Mr. Einsmann, $870,250 for Mr. Berndt and
$221,150 for Mr. Jager.
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
The following graph compares the five-year cumulative
total return of the Company's Common Stock as compared with
the S&P 500 Stock Index and a weighted composite of the S&P
Household Products Index, the S&P Paper & Forest Products
Index, the S&P Cosmetics Index, the S&P Health Care
Diversified Index and the S&P Foods Index weighted based on
the Company's current fiscal year revenues.
{Performance Graph}
The graph assumes a $100 investment made on July 1, 1990
and the reinvestment of all dividends, as follows:
DOLLAR VALUE OF $100 INVESTMENT AT
JUNE 30 ____________________________________________
1990 1991 1992 1993 1994 1995
______ _____ ______ ______ ______ _______ _______ _______
P&G Common $100.00 $91.03 $110.87 $128.12 $136.43 $185.50
Composite Group $100.00 $110.33 $134.72 $145.28 $149.29 $204.57
S&P 500 $100.00 $107.39 $121.80 $138.40 $140.34 $177.76
SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL
OWNERS
The following tables give information concerning the beneficial
ownership of the Company's Common and Series A
and B ESOP Convertible Class A Preferred Stock by all
Directors and nominees, all Directors and executive officers
as a group, and the owners of more than five percent of the
outstanding Series A and B ESOP Convertible Class A
Preferred Stock, on August 11, 1995:
COMMON STOCK
Amount and Nature of Beneficial Ownership
_______________________________________
Direct<F1>
and Trusteeships
Profit Right and Percent
Sharing to Family of
Owner Plan<F2> Acquire<F3> Holdings<F4> Class
______ __________ ___________ _____________ _______
David M. Abshire 800.0 -- -- <F5>
Edwin L. Artzt 308,880.5 515,000 -- <F5>
Norman R. Augustine 3,000.0 -- -- <F5>
Donald R. Beall 2,500.0 -- 5,411.0 <F5>
Gordon F. Brunner 59,484.1 144,470 178.0 <F5>
Richard B. Cheney 1,400.0 -- -- <F5>
Harald Einsmann 10,816.0 204,200 -- <F5>
Richard J. Ferris 42,800.0 -- -- <F5>
Joseph T. Gorman 2,391.0 -- -- <F5>
Durk I. Jager 41,906.7 210,000 -- <F5>
Jerry R. Junkins 1,000.0 -- -- <F5>
Charles R. Lee 3,001.0 -- -- <F5>
Lynn M. Martin 500.0 -- -- <F5>
John E. Pepper 383,542.3 280,000 2,876.0 <F5>
John F. Smith, Jr. 1,065.0 -- -- <F5>
Ralph Snyderman 415.0 -- -- <F5>
Robert D. Storey 400.0 -- -- <F5>
Marina v.N. Whitman 2,400.0 -- -- <F5>
41 Directors and
executive officers,
as a group 1,669,892.5 3,176,530 23,333.3 .709%
<FN>
<F1> Sole discretion as to voting and investment of shares.
<F2> Shares allocated to personal accounts of executive
officers under appropriate Trust pursuant to The Procter
& Gamble Profit Sharing Trust and Employee Stock
Ownership Plan. Plan participants have sole discretion
as to voting and, within limitations provided by the
Plan, investment of shares. Shares are voted by the
appropriate Trustees in accordance with instructions
from participants. If instructions are not received by
the Trustees as to the voting of particular shares,
shares are to be voted in proportion to instructions
actually received from other participants in the same
Trust.
<F3> If acquired, would have sole discretion as to voting and
investment of shares.
<F4> The individuals involved share voting and/or investment powers
with other persons.
<F5>Less than .121% for any one Director.
</FN>
SERIES A ESOP CONVERTIBLE CLASS A PREFERRED STOCK
Amount and Nature of Beneficial Ownership
___________________________________ Profit
Percent
Sharing of
Owner Plan<F1> Trusteeships Series
______ ________ ____________ _______
David M. Abshire - - -
Edwin L. Artzt 2,760.2 - <F2>
Norman R. Augustine - - -
Donald R. Beall - - -
Gordon F. Brunner 2,760.2 - <F2>
Richard B. Cheney - - -
Harald Einsmann - - -
Richard J. Ferris - - -
Joseph T. Gorman - - -
Durk I. Jager 2,736.7 - <F2>
Jerry R. Junkins - - -
Charles R. Lee - - -
Lynn M. Martin - - -
John E. Pepper 2,760.2 - <F2>
John F. Smith, Jr. - - -
Ralph Snyderman - - -
Robert D. Storey - - -
Marina v.N. Whitman - - -
41 Directors and
executive officers,
as a group 51,857.8 - .157%
Employee Stock Ownership
Trust of The Procter &
Gamble Profit Sharing
Trust and Employee Stock
Ownership Plan, PO Box
599, Cincinnati, Ohio
45201-0599 (G. V. Dirvin,
W. O. Coleman and
C. C. Carroll,
Trustees) -- 21,817,890.6<F3> 65.9%
<FN>
<F1> Shares allocated to personal accounts of executive officers
under the Employee Stock Ownership Trust pursuant to The
Procter & Gamble Profit Sharing Trust
and Employee Stock Ownership Plan. Plan participants
have sole discretion as to voting and, within
limitations provided by the Plan, investment of shares.
Shares are voted by the Trustees of such Trust in
accordance with instructions from participants. If
instructions are not received by the Trustees as to the
voting of particular shares, shares are to be voted in
proportion to instructions actually received from other
participants in the Trust.
<F2> Less than .009% for any one Director; by the terms of
the stock, only persons who are or have been employees
can have beneficial ownership of these shares.
<F3> Unallocated shares. The voting of these shares is
governed by the terms of the Plan, which provides that
the Trustees shall vote unallocated shares held by them
in proportion to instructions received from Trust
participants as to voting of allocated shares. The
disposition of these shares in connection with a tender
offer would be governed by the terms of the Plan, which
provides that the Trustees shall dispose of unallocated
shares held by them in proportion to instructions
received from Trust participants as to the disposition
of allocated shares.
</FN>
SERIES B ESOP CONVERTIBLE CLASS A PREFERRED STOCK
Amount and Nature of Beneficial Ownership
_____________________________________
Profit Percent
Sharing of
Owner Plan<F1> Trusteeships Series
_______ ________ ____________ ______
David M. Abshire - - -
Edwin L. Artzt 184.0 - <F2>
Norman R. Augustine - - -
Donald R. Beall - - -
Gordon F. Brunner 76.8 - <F2>
Richard B. Cheney - - -
Harald Einsmann - - -
Richard J. Ferris - - -
Joseph T. Gorman - - -
Durk I. Jager - - -
Jerry R. Junkins - - -
Charles R. Lee - - -
Lynn M. Martin - - -
John E. Pepper 76.8 - <F2>
John F. Smith, Jr. - - -
Ralph Snyderman - - -
Robert D. Storey - - -
Marina v.N. Whitman - - -
41 Directors and
executive officers,
as a group 745.3 - .004%
Employee Stock Ownership
Trust of The Procter &
Gamble Profit Sharing
Trust and Employee Stock
Ownership Plan,
PO Box 599, Cincinnati,
Ohio 45201-0599
(G. V. Dirvin,
W. O. Coleman and
C. C. Carroll,
Trustees) -- 16,928,813.9<F3> 8.4%
<FN>
<F1> Shares allocated to personal accounts of current and
former executive officers under the Employee Stock
Ownership Trust pursuant to The Procter & Gamble Profit
Sharing Trust and Employee Stock Ownership Plan. Plan
participants have sole discretion as to voting and,
within limitations provided by the Plan, investment of
shares. Shares are voted by the Trustees of such Trust
in accordance with instructions from participants. If
instructions are not received by the Trustees as to the
voting of particular shares, shares are to be voted in
proportion to instructions actually received from other
participants in the Trust.
<F2> Less than .0011% for any one Director.
<F3> Unallocated shares. The voting of these shares is
governed by the terms of the Plan, which provides that
the Trustees shall vote unallocated shares held by them
in proportion to instructions received from Trust
participants as to voting of allocated shares. The
disposition of these shares in connection with a tender
offer would be governed by the terms of the Plan, which
provides that the Trustees shall dispose of unallocated
shares held by them in proportion to instructions
received from Trust participants as to the disposition
of allocated shares.
</FN>
REPORTING OF SECURITIES TRANSACTIONS
Ownership of and transactions in Company stock by
executive officers and Directors of the Company are required
to be reported to the Securities and Exchange Commission
pursuant to Section 16 of the Securities Exchange Act of
1934. On June 13, 1995, Alan G. Lafley, Executive Vice
President, and a member of the Executive Committee, filed a
Form 4 for June 1992 to correct an inadvertent failure to
report a disposition of shares in connection with his
withdrawal from the Company's Stock Investment Program.
TRANSACTIONS WITH EXECUTIVE OFFICERS, DIRECTORS AND OTHERS
During the past fiscal year, the Company and its
subsidiaries had no transaction in which any Director, or
any member of the immediate family of any Director, had a
material direct interest reportable under applicable rules
of the Securities and Exchange Commission. In the normal
course of business the Company had transactions with other
corporations where certain Directors are or were executive
officers; and the Company utilized the services of the law
firm of Thompson, Hine and Flory in which Robert D. Storey,
a Director, is a partner. None of the aforementioned
matters was material in amount as to the Company, the
corporations or law the firm.
During the past fiscal year, the Company and its
subsidiaries had no transactions in which any executive
officer of the Company, or any member of the immediate
family of any such executive officer, had a material direct
or indirect interest reportable under applicable rules of
the Securities and Exchange Commission.
PROPOSAL TO RATIFY APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors, acting upon the recommendation of
the Audit Committee of the Board, has appointed the firm of
Deloitte & Touche LLP as the Company's independent auditors
for fiscal year 1995-96. Although action by the
shareholders in this matter is not required, the Board
believes that it is appropriate to seek shareholder
ratification of this appointment in light of the critical
role played by independent auditors in maintaining the
integrity of Company financial controls and reporting.
The following proposal will therefore be presented for
action at the annual meeting by direction of the Board of
Directors:
RESOLVED, That action by the Board of Directors
appointing Deloitte & Touche LLP as the Company's
independent auditors to conduct the annual audit of the
financial statements of the Company and its subsidiaries
for the fiscal year ending June 30, 1996 is hereby
ratified, confirmed and approved.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS
RESOLUTION FOR THE FOLLOWING REASONS:
The Board of Directors first appointed Deloitte &
Touche LLP as the Company's independent auditors in 1890
and has reappointed them to this capacity each succeeding
fiscal year. Deloitte & Touche LLP has an outstanding
reputation in the auditing field and has served the
Company well over the intervening years. The Board of
Directors and its Audit Committee believe that such firm
clearly has the necessary personnel, professional
qualifications and independence to continue to serve as
the Company's independent auditors.
In addition, Deloitte & Touche LLP's longstanding service
to the Company has given it a unique understanding of the
operations of Procter & Gamble, thereby giving it a
significant advantage over other firms in conducting a
knowledgeable and efficient audit.
One or more representatives of Deloitte & Touche LLP
will be in attendance at the annual meeting on October
10, 1995. The representatives will have the opportunity
to make a statement, if desired, and will be available to
respond to appropriate questions from shareholders.
The affirmative vote of a majority of shares
participating in the voting on this proposal is required
for adoption of this resolution. Proxies will be voted
FOR the resolution unless the Proxy Committee is
instructed otherwise on a proxy returned to such
Committee. Abstentions indicated on such a proxy card
will not be counted as either "for" or "against" this
proposal.
PROPOSAL TO RATIFY AMENDMENT TO
THE PROCTER & GAMBLE 1993 NON-EMPLOYEE DIRECTORS' STOCK
PLAN
On January 10, 1995, the Board of Directors approved
for submission to the shareholders an amendment to The
Procter & Gamble 1993 Non-Employee Directors' Stock Plan
as set forth in Appendix A to this proxy statement. The
resolution which will be introduced at the shareholders
meeting seeking approval of such Plan is as follows:
RESOLVED, That The Procter & Gamble 1993 NonEmployee
Directors' Stock Plan as amended by the Board of
Directors, as set forth in Appendix A to the proxy
statement for this meeting, is hereby ratified and
authorized.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THIS
RESOLUTION FOR THE FOLLOWING REASONS:
The proposed amendment to The Procter & Gamble 1993 Non
Employee Directors' Stock Plan (the "Plan") provides for an
automatic grant to each non-employee Director (a
"Participant"), on the last business day of each February, of
a stock option to purchase 1,000 shares of the Company's
Common Stock at an exercise price of one hundred percent
(100%) of the fair market value of the Common Stock on the
date of grant. The stock options have a term of 10 years and
are exercisable one year from the date of grant.
Under United States tax law, a Participant will realize
a gain taxable as ordinary income on the date of exercise in
an amount equal to the difference between the market price on
the date of exercise and the exercise price. This amount is
treated as a tax deductible expense to the Company at the
time of exercise. On August 11, 1995, the fair market value
of the Company's Common Stock was $68.75 per share.
The granting of an annual stock option to all non
employee Directors is the first increase in Director
compensation since January 1, 1993. This would maintain the
total compensation to non-employee Directors at a level
competitive and in line with those of comparable companies,
and is important to attract and retain the talent needed to
oversee the Company.
In considering an increase in overall compensation paid
to non-employee Directors, the Board felt it would be more
appropriate to have any increase be in the form of a stock
option grant. This supports the Company's desire to increase
non-employee Directors' stock ownership, providing a direct
link between compensation and shareholder value, and further
aligns their interests with all shareholders.
The first grant of stock options under the amended Plan
occurred on February 28, 1995 and was contingent upon
shareholder approval by the affirmative vote of the holders
of a majority of the Common Stock of the Company present, or
represented and entitled to vote at a meeting duly held. If
shareholder approval to the proposed amendments is not
obtained, the stock option already granted would be subject
to immediate forfeiture and any increase in compensation for
non-employee Directors would be made by an increase in cash
fees.
Proxies will be voted FOR the resolution unless the
Proxy Committee is instructed otherwise on a proxy returned
to such Committee. Abstentions indicated on such a proxy
card will be counted as a vote AGAINST this proposal. "Broker
non-votes" specified on proxies returned by brokers holding
shares for beneficial owners who have not provided
instructions as to voting on this issue will be treated as
not present for voting on this issue.
SHAREHOLDER PROPOSALS
The following proposals, each of which is opposed by the
Board of Directors, would require the affirmative vote of a
majority of the votes cast on each such proposal for
adoption.
SHAREHOLDER PROPOSAL NO. 1
Evelyn Y. Davis, Watergate Office Building, 2600 Virginia
Avenue, N.W., Suite 215, Washington, DC 20037, owning 200
shares of Common Stock of the Company, has given notice that
she intends to present for action at the annual meeting the
following resolution:
RESOLVED: That the shareholders of Procter & Gamble
recommend that the Board of Directors take the necessary
steps to reinstate the election of directors ANNUALLY,
instead of the stagger system which was recently adopted.
Mrs. Davis has submitted the following statement in
support of her resolution:
REASONS: Until recently, directors of Procter &
Gamble were elected annually by all shareholders.
The great majority of New York Stock Exchange listed
corporations elect all their directors each year.
This insures that ALL directors will be more
accountable to ALL shareholders each year and to a
certain extent prevents the self-perpetuation of the
Board.
Last year the owners of 183,626,999 shares
representing approximately 32.5% of shares voting, voted
FOR this proposal.
If you AGREE, please mark your proxy FOR this
resolution.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS
RESOLUTION FOR THE FOLLOWING REASONS:
The shareholders of Procter & Gamble decided, by action
at the annual meeting of shareholders in 1985, that its
Board of Directors shall be divided into three classes with
Directors elected to staggered three-year terms. This was
to insure continuity of experienced Board members.
This exercise by Procter & Gamble shareholders of their
rightful role in corporate governance has been challenged
with this same resolution at every annual meeting since
1986. On each of these occasions, the shareholders
confirmed that they wanted to retain the continuity of
experienced Directors by having a classified Board of
Directors with staggered terms.
In each such year they defeated the proposal to return to
annual election of the entire Board, with over 67% voting
against it at the most recent shareholders meeting. We
believe this affirms the Board's view that the current
system of election is working effectively.
This year's resolution and the arguments in support of it
are identical to those in prior years. The Board of
Directors agrees with the results of previous shareholder
voting on this issue and again recommends a vote AGAINST the
proposal.
The affirmative vote of a majority of shares
participating in the voting on this proposal is required for
adoption of this resolution. Proxies will be voted AGAINST
the resolution unless the Proxy Committee is instructed
otherwise on a proxy returned to such Committee. Abstentions
indicated on such a proxy card will not be
counted as either "for" or "against" this proposal. "Broker
non-votes" specified on proxies returned by brokers holding
shares for beneficial owners who have not provided
instructions as to voting on this issue will be treated as
not present for voting on this issue.
SHAREHOLDER PROPOSAL NO. 2
Alan G. Hevesi, Comptroller of the City of New York and
custodian and trustee of the New York City Employees'
Retirement System, 1 Centre Street, New York, NY 10007-2341,
owning 1,892,774 shares of Common Stock of the Company, in
conjunction with two co-sponsoring religious orders (a list
of which organizations, with shares of Common Stock of the
Company beneficially held, will be furnished promptly to any
person upon request in writing to Ms. Linda D. Rohrer,
Assistant Secretary, The Procter & Gamble Company, P.O. Box
599, Cincinnati, Ohio 45201 or by telephone at 513-9838697),
have given notice that they intend to present for action at
the annual meeting the following resolution:
WHEREAS WE BELIEVE:
The responsible implementation of a sound, credible
environmental policy increases long-term shareholder
value by raising efficiency, decreasing clean-up costs,
reducing litigation, and enhancing public image and
product attractiveness;
Adherence to public standards for environmental
performance gives a company greater public credibility
than following standards created by industry alone. For
maximum credibility and usefulness, such standards should
reflect what investors and other stakeholders want to
know about the environmental records of their company;
Companies are increasingly being expected by investors
to do meaningful, regular, comprehensive and impartial
environmental reports. These help investors and the
public to understand environmental progress and problems;
Uniform standards for environmental reports permits
comparisons of performance over time. It also allows
companies to attract new capital from investors seeking
investments which are environmentally responsible and
responsive and which minimize risk of environmental
liability.
WHEREAS:
The Coalition for Environmentally Responsible
Economies (CERES) - which comprises large investors
(including shareholders of this Company) with $160
billion in stockholdings, public interest
representatives, and environmental experts - consulted
with corporations and produced comprehensive public
standards for both environmental performance and
reporting. Over 80 companies, including Sun [Oil],
General Motors, H.B. Fuller, Polaroid, and Arizona Public
Service Company have endorsed the CERES Principles to
demonstrate their commitment to public environmental
accountability. Fortune-500 endorsers speak
enthusiastically about the benefits that flow from
working with CERES: increasing public credibility;
adding "value" to the company's environmental
initiatives; and advancing the company's own
environmental plans and agenda.
In endorsing the CERES Principles, a company commits
to work toward:
1. Protection of the biosphere
2. Sustainable use of natural resources
3. Waste reduction and disposal
4. Energy conservation
5. Risk reduction
6. Safe Products and Services
7. Environmental Restoration
8. Informing the public
9. Management commitment
10.Audits and reports
[Full text of the CERES Principles and accompanying
CERES Report Form are obtainable from CERES, 711
Atlantic Avenue, Boston MA 02110, tel: 617/451-0927].
RESOLVED: Shareholders request the Company to
endorse the CERES Principles as part of its commitment
to be publicly accountable for its environmental impact.
The New York City Employees' Retirement System has
submitted the following statement in support of their
resolution:
Concerned investors are asking the Company to be
publicly accountable for its environmental impact,
including collaborating with this corporateenvironmental-
investor-community coalition to develop: standards for
environmental performance and disclosure; methods for
measuring progress toward these goals; and a format for
public reporting of progress. We believe this is
comparable to the European Community regulation for
voluntary participation in verified and publiclyreported
eco--management and auditing.
We invite our company to endorse the CERES Principles
by (1) stating its endorsement in a letter signed by a
senior officer; (2) commiting to implement the
principles; and (3) annually publishing an environmental
report in the format of the CERES Report. This will
complement -- not supplant -- internal corporate
environmental policies and procedures.
Without such public scrutiny, corporate environmental
policies and reports lack the critical component of
adherence to standards upheld by management and
stakeholders alike. Shareholders are asked to vote FOR
this resolution to encourage our Company to demonstrate
environmental leadership and accountability.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS
RESOLUTION FOR THE FOLLOWING REASONS:
We have carefully reviewed the CERES Principles and don't
believe adoption of another set of broad, U.S.-focused
principles, on top of the Company's tailored, global
environmental policy and programs, would help P&G better
fulfill its continuing commitment to environmental quality.
Further, it would divert resources that are being
effectively utilized to advance the Company's goals.
P&G's global Environmental Quality Policy is consistent
with the spirit of the CERES Principles. This policy is
part of the Company's commitment to provide products of
superior value that best fill the needs of the world's
consumers, and calls for P&G to continually strive to
improve the environmental quality of its products, packaging
and operations around the world. Some of the provisions of
this policy include:
Providing safe products, packaging and operations for
employees, consumers and the environment;
Reducing or preventing the environmental impact of the
Company's products and packaging in their design,
manufacture, distribution, use and disposal whenever
possible;
Ensuring that every employee understands and is
responsible and accountable for incorporating
environmental considerations in daily business
activities.
The Company's Chief Environmental Officer
reports directly to the Chief Executive and is
responsible for implementing the Company's Environmental
Policy and coordinating environmental activities
worldwide.
Most importantly, the Company continues to
provide the environmental leadership and accountability
called for by the CERES Principles. For example:
P&G has been a leader among corporations in implementing a
global environmental program, including developing one of
the first global environmental quality policies. P&G was
first to bring innovations like recycled plastic bottles,
ultra detergents and refill packs to the laundry business;
in the U. S. alone, ultra detergents have saved 304
million pounds of packaging since 1992. By the end of
1994, the Company had reduced overall packaging usage by
24% versus 1989-1990 levels.
And, P&G's focus on pollution prevention has resulted in
a 75% reduction in air and water emissions from our
manufacturing plants since 1992 as tracked by the EPA's
SARA program.
P&G sets and publicly shares its environmental goals,
providing its shareholders, employees and consumers with a
yardstick to measure our progress. We track and report
results through a global environmental progress report.
We invite you to order a copy by writing to Shareholder
Services, P. O. Box 599, Cincinnati, OH 45201-0599.
Additionally, P&G is actively contributing to efforts by
the International Standards Organization to advance common
global environmental and reporting standards.
Our focus on leadership, accountability and results
has led peer companies, policy-makers, and environmental
and consumer groups to recognize P&G as an environmental
leader, including the 1994 Challenge Innovation Award for
innovative package source reduction from the U. S. Council
of Northeastern Governors (CONEG). This commitment, along
with publicly stated goals, an on-going program of audits
and reports, and the requirement to comply with extensive
regulation from localities, states, the U.S. federal
government and other nations, already provides a strong
basis of accountability to the public and shareholders
alike.
We believe P&G shareholders and the environment will be
best served by focusing our resources on action and results,
rather than re-stating our principles, debating reporting
formats and duplicating effort.
Therefore, the Board recommends a vote AGAINST this
proposal.
The affirmative vote of a majority of shares
participating in the voting on this proposal is required for
adoption of this resolution. Proxies will be voted AGAINST
the resolution unless the Proxy Committee is instructed
otherwise on a proxy returned to such Committee. Abstentions
indicated on such a proxy card will not be counted as either
"for" or "against" this proposal. "Broker non-votes"
specified on proxies returned by brokers holding shares for
beneficial owners who have not provided instructions as to
voting on this issue will be treated as not present for
voting on this issue.
SHAREHOLDER PROPOSAL NO. 3
Rabbi Benno M. Wallach, D.D., 19803 White Dove Trail,
P.O. Box 246, Crosby, Texas 77532, owning 60 shares of
Common Stock of the Company directly and 1,420 shares of the
Common Stock of the Company as joint tenant, has given
notice that he intends to present for action at the annual
meeting the following resolution:
WHEREAS the current process of Procter & Gamble's
governance is effected by management's selection of
candidates for board directorships,
and WHEREAS management annually presents only one
candidate for each available directorship,
and WHEREAS this process places shareholders (the
owners of the company) by every practical consideration
in the position of having to "rubberstamp" management's
selectees,
and WHEREAS this process of electing directors gives
management extraordinary powers to have corporate
policies, as well as personal agendas, effected (such, as
for example, levels and types of remuneration),
and, WHEREAS this current electoral system deprives
the owners of the company, i.e. the stockholders, of the
democratic process of choice, and therefore bona fide
representation,
BE IT THEREFORE RESOLVED that the shareholders
request the board of directors to take whatever steps are
necessary to annually present at least two candidates for
each available seat on the board, beginning with the next
annual meeting,
and BE IT FURTHER RESOLVED that each candidate
present in the Notice of Annual Meeting a brief statement
of what s/he intends to accomplish or change as a member
of the board, should s/he be elected.
Rabbi Wallach has submitted the following statement in
support of his resolution:
The present system of governance, as practiced by
most American corporations, has created a modern day
corporate feudal system, replete with vassals
(shareholders), who, for lack of alternatives, are
forced to "rubberstamp" the desires of management. Top
executives have become the modern equivalents of the
robber barons of the middle ages, who enrich themselves
at the expense of stockholders. Testimony to this is
presented by prevalent outrageously excessive executive
compensation, which includes large salaries, huge
numbers of stock options (frequently worth annually
millions of dollars), various types of long and short
term "incentives", disproportionate retirement benefits,
and a plethora of other emoluments.
From the view of stockholders, there is need for a
system that can be controlled. To be sure, the
alternative exists to nominate board members without
selection by management, but current provisions to
accomplish this have simply proven to be totally
impractical and impotent. I believe that this
shareholder proposal is a viable option for change.
Good leadership should be generously and liberally
rewarded; however, there are reasonable limits, and
these have long been exceeded. While the system cannot
be "fixed" overnight, a beginning has to be made
somewhere. The number of votes supporting or opposing
this proposal will send a message to management how the
owners of the company feel. Giving the shareholders a
choice of candidates for board memberships may be just
such a beginning.
IF YOU AGREE, PLEASE VOTE FOR THIS PROPOSAL.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS
RESOLUTION FOR THE FOLLOWING REASONS:
This proposal is based entirely on the assumption
that "management" or "top executives" select candidates
for the Board of Directors. In fact, candidates are
nominated by the Board of Directors based on the
recommendation of the Nominating Committee of the Board.
This Committee numbers eight Directors all of whom are
non-employee, outside Directors.
The Committee recommends candidates based on several
criteria, with a view to bringing to the Board a variety
of experience and background. Candidates should have
highlevel managerial experience in a relatively complex
organization or should be accustomed to dealing with complex
problems. While directors are expected to represent the
balanced, best interests of the shareholders as a whole, the
Nominating Committee, in assessing the overall composition
of the Board, considers issues such as diversity, age,
international background, specialized expertise, etc.
Candidates for the P&G Board must be individuals of the
highest character and integrity and have an inquiring mind,
experience at a strategy/policy-setting level and the
ability to work well with others. Candidates must also have
sufficient time available to devote to the affairs of the
Company and must be free of any conflict of interest that
would interfere with the independence and proper performance
of the responsibilities of a director.
When the Nominating Committee selects a candidate meeting
these criteria and expressing an interest in serving, it
puts forward its recommendation to the full Board. With
Board approval, that candidate is then proposed to the
shareholders.
The Board believes this proposal, which would require two
candidates for every position, would be counterproductive.
It would be a significant burden to identify two candidates
for every position who would satisfy the above criteria and
be willing to serve. Further, this counterproductive
approach could limit the number of highly qualified
candidates willing to be nominated.
The Board believes the current system for nominating and
electing directors satisfies the best interests of P&G
shareholders and will result in the strongest, most
effective Board possible.
Therefore, the Board of Directors recommends a vote
AGAINST this proposal.
The affirmative vote of a majority of shares
participating in the voting on this proposal is required for
adoption of this resolution. Proxies will be voted AGAINST
the resolution unless the Proxy Committee is instructed
otherwise on a proxy returned to such Committee. Abstentions
indicated on such a proxy card will not be counted as either
"for" or "against" this proposal. "Broker non-votes"
specified on proxies returned by brokers holding shares for
beneficial owners who have not provided instructions as to
voting on this issue will be treated as not present for
voting on this issue.
SHAREHOLDER PROPOSAL NO. 4
Madeline H. Wallach, 19803 White Dove Trail, P.O. Box
246, Crosby, Texas 77532, owning 120 shares of Common Stock
of the Company directly and 1,420 shares of the Common Stock
of the Company as joint tenant, has given notice that she
intends to present for action at the annual meeting the
following resolution:
WHEREAS Executive Incentive Awards are merely
euphemisms for compensation over and above salaries,
stock options, pensions, various additional assorted
benefits, and other emoluments,
and WHEREAS it is impossible to accurately measure
how much such incentives contribute or have contributed
to the level of an employee's work effort,
BE IT HEREBY RESOLVED that the shareholders of the
Procter & Gamble Corporation request the Board to take
whatever steps are necessary to eliminate the Executive
Incentive Compensation system, after current contractual
obligations have been met.
Mrs. Wallach has submitted the following statement in
support of her resolution:
It is impossible to gauge how much extra effort an
executive has expended or will expend to meet goals set
for him/her to earn an award, so that executive
incentive pay becomes no more than a redundant term for
additional compensation. The American Work Ethic
demands that everyone deliver his or her best effort in
return for the salary s/he has agreed to accept to
fulfill the obligations of a given job. No incentive
can cause anyone to give more than his or her best, for
there is nothing beyond that. The corollary to this
concept is that those who do their jobs well will
continue to hold them, while those who do not perform in
accordance with reasonable expectations will be
replaced. This corollary form of incentive should be
the standard for all levels of employment, from the most
menial position to the executive suite.
The usually promulgated concept, that compensation
types and levels are determined in a fashion fair to
both the recipients of remuneration, as well as to the
owners of the company (the stockholders), by a committee
of outside directors, and therefore is determined by
disinterested persona, is a legal fiction. Directors
are nominated by management -- note that there is always
only one slate, which is unopposed -- and the "election"
process by shareholders is merely an act of
rubberstamping management's selectees, because there are
no alternatives. I believe that those so favored
receive disproportionately high remuneration for their
services, and are therefore anxious to please those in
control, in order to retain their choice positions. If
they do not follow the wishes of those who chose them,
they place themselves in jeopardy to be replaced
speedily. Clearly, it is a game of "you scratch my
back, and I'll scratch yours". The objectivity of these
"outside directors", who constitute the compensation
committee, is therefore highly questionable, and it
behooves the shareholders to reclaim control of what is
rightfully theirs, i.e. the company, some of the
expenses it incurs, and the earnings it produces. I am
of the opinion that steps should be taken to put a halt
to many of the currently outrageously high executive
remunerations, under whatever guise they may appear, of
which "executive incentive pay" is only one.
IF YOU AGREE, PLEASE VOTE FOR THIS PROPOSAL.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THIS
RESOLUTION FOR THE FOLLOWING REASONS:
The elimination of executive bonus plans which are
specifically tied to individual and Company performance
measures would work against the interest of the
Company's shareholders. These programs reflect P&G's
long-standing belief that a significant portion of
executive compensation should be contingent on Company
performance.
Executive compensation consists of a combination of
base pay, short term and long term incentive programs,
as described in the Compensation Committee report on
pages 710. The Compensation Committee which consists
entirely of outside Directors, regularly updates
executive pay ranges based on survey data from a
comparative group of companies. Updates are based upon
the survey data and the principle that it is essential
that compensation levels remain competitive in order to
help attract, motivate and retain the talent needed to
lead and grow P&G's business. The pay ranges are
designed so that when the Company achieves solid
earnings growth and stock price appreciation, P&G executive
compensation levels will equal or exceed a middle
compensation range for a comparative group of companies.
Depending upon the level of the executive, between 40%
and 60% of total compensation is at risk and directly
contingent on achieving individual or Company performance
goals and is earned only if these objectives are achieved.
Indeed, in recent years P&G's compensation program has been
strengthened to increase the linkage of incentive
compensation to increases in total corporate earnings and
long-term shareholder return. This has served shareholders
well. Over time, the Company's total return to shareholders-
stock price appreciation and dividend growth--has
signficantly outpaced growth in executive compensation on an
annualized basis. For example, the annualized total
shareholder return for the ten year period ending June 1995
was more than double the annualized increase in executive
compensation over the same period.
The Board continues to believe that the Company's
executive compensation principles and programs, including
incentives tied to Company results, are strongly in the
interest of the Company's shareholders.
Accordingly, the Board of Directors recommends a vote
AGAINST this proposal.
The affirmative vote of a majority of shares participating
in the voting on this proposal is required for adoption of
this resolution. Proxies will be voted AGAINST the
resolution unless the Proxy Committee is instructed otherwise
on a proxy returned to such Committee. Abstentions indicated
on such a proxy card will not be
counted as either "for" or "against" this proposal. "Broker
non-votes" specified on proxies returned by brokers holding
shares for beneficial owners who have not provided
instructions as to voting on this issue will be treated as
not present for voting on this issue.
1996 ANNUAL MEETING DATE
It is anticipated that the 1996 annual meeting of
shareholders will be held on Tuesday, October 8, 1996.
Pursuant to regulations issued by the Securities and
Exchange Commission, to be considered for inclusion in the
Company's proxy statement for presentation at that meeting,
all shareholder proposals must be received by the Company on
or before the close of business on Friday, May 3, 1996.
OTHER MATTERS
No action will be taken with regard to the minutes of the
annual meeting of shareholders held October 11, 1994 unless
they have been incorrectly recorded.
The Board of Directors knows of no other matters which
will come before the meeting. However, if any matters other
than those set forth in the notice should be properly
presented for action, the persons named in the proxy intend
to take such action as will be in harmony with the policies
of the Company and, in that connection, will use their
discretion.
APPENDIX A
(Language to be added is indicated by underlining. Language
to be deleted is lined out.)
THE PROCTER & GAMBLE 1993 NON-EMPLOYEE DIRECTORS'
STOCK PLAN
ARTICLE A -- PURPOSE.
The purpose of The Procter & Gamble 1993 Non-Employee
Directors' Stock Plan (hereinafter referred to as the
"Plan") is to strengthen the alignment of interests between
non-employee Directors (hereinafter referred to as
"Participants") and the shareholders of The Procter & Gamble
Company (hereinafter referred to as the "Company") through
the increased ownership of shares of the Company's Common
Stock. This will be accomplished by allowing Participants
to elect voluntarily to convert a portion or all of their
fees for services as a Director into Common Stock and by
granting Participants non-qualified options to purchase
shares of Common Stock (hereinafter referred to as "Stock
Options").
ARTICLE B -- ADMINISTRATION.
1. The Plan shall be administered by the Compensation
Committee (hereinafter referred to as the "Committee") of
the Board of Directors of the Company (hereinafter referred
to as the "Board"), or such other committee as may be
designated by the Board. The Committee shall consist of not
less than three (3) members of the Board who are neither
officers nor employees, or members of the Board who are
"disinterested persons" as defined in Rule 16b-3 under the
Securities Exchange Act of 1934, as amended (hereinafter
referred to as the "1934 Act"), or any successor rule or
definition adopted by the Securities and Exchange
Commission, to be appointed by the Board from time to time
and to serve at the discretion of the Board.
2. It shall be the duty of the Committee to
administer this Plan in accordance with its provisions and
to make such recommendations of amendments or otherwise as
it deem necessary or appropriate. A decision by a majority
of the Committee shall govern all actions of the Committee.
3. Subject to the express provisions of this Plan,
the Committee shall have authority to allow Participants the
right to elect to receive fees for services as a director in
either cash or an equivalent amount of whole shares of
Common Stock of the Company, or partly in cash and partly in
whole shares of the Common Stock of the Company, subject to
such conditions or restrictions, if any, as the Committee
may determine. The Committee also has the authority to make
all other determinations it deems necessary or advisable for
administering this Plan.
4. The Committee may establish from time to time such
regulations, provisions, and procedures within the terms of
this Plan as, in its opinion, may be advisable in the
administration of this Plan.
5. The Committee may designate the Secretary of the
Company or other employees of the Company to assist the
Committee in the administration of this Plan and may grant
authority to such persons to execute documents on behalf of
the Committee.
ARTICLE C -- PARTICIPATION.
Participation in the Plan shall be limited to all non
employee Directors of the Company.
ARTICLE D -- LIMITATION ON NUMBER OF SHARES FOR THE PLAN.
The total number of shares of Common Stock of the
Company that may be awarded each year shall not exceed
35,000 shares.
ARTICLE E -- SHARES SUBJECT TO USE UNDER THE PLAN.
Shares of Common Stock to be awarded under the terms of
this Plan shall be treasury shares.
//ARTICLE F -- STOCK OPTIONS.
1. Each Participant shall, on the last business day
in each February during such Participant's term,
automatically be granted a Stock Option to purchase 1,000
shares of Common Stock (with such amount subject to
adjustment as set forth in Article G) having an exercise
price of one hundred percent (100%) of the fair market value
of the Common Stock on the date of grant.
2. The Stock Options shall have a term of ten (10)
years from the date of grant, subject to earlier termination
as provided herein, and shall be exercisable one (1) year
from the date of grant, except in the case of death, in
which case the Stock Options shall be immediately
exercisable.
3. Stock Options are not transferable other than by
will or by the laws of descent and distribution. Legatees,
distributees and duly appointed executors and administrators
of the estate of a deceased Participant shall have the right
to exercise such Stock Options at any time prior to the
expiration date of the Stock Options.
4. If a Participant ceases to be a Director while
holding unexercised Stock Options, such stock options are
then void, except in the case of (i) death, (ii) disability,
(iii) retirement after attaining the age of sixty-nine (69)
or (iv) resignation from the Board for reasons of the
antitrust laws or the conflict of interest or continued
service policies.
5. Upon the exercise of a Stock Option, payment in
full of the exercise price shall be made by the Participant.
The exercise price may be paid for by the Participant either
in cash, shares of the Common Stock of the Company to be
valued at their fair market value on the date of exercise,
or a combination thereof.
ARTICLE G -- ADJUSTMENTS.
The amount of shares authorized to be issued annually
under this Plan will be subject to appropriate adjustment in
the event of future stock splits, stock dividends, or other
changes in capitalization of the Company to prevent the
dilution or enlargement of rights under this Plan; following
any such change, the term "Common Stock" shall be deemed to
refer to such class of shares or other securities as may be
applicable. The number of shares and exercise prices
covered by outstanding Stock Options and the number of
shares to be granted as Stock Options pursuant to Article F,
paragraph 1 shall be adjusted to give effect to any such
stock splits, stock dividends, or other changes in the
capitalization.//
ARTICLE H -- TRANSFER OF SHARES.
1. The Committee may transfer Common Stock of the
Company under the Plan subject to such conditions or
restrictions, if any, as the Committee may determine. The
conditions and restrictions may vary from time to time and
may be set forth in agreements between the Company and the
Participant or in the awards of stock to them, all as the
Committee determines.
2. The shares awarded shall be valued at the average
of the high and low quotations for Common Stock of the
Company on the New York Stock Exchange on the day of the
transfer to a Participant. All shares awarded shall be full
shares, rounded up to the nearest whole share.
ARTICLE I -- ADDITIONAL PROVISIONS.
1. The Board may, at any time, repeal this Plan or
may amend it from time to time except that no such amendment
may amend this paragraph, increase the annual aggregate
number of shares subject to this Plan, or alter the persons
eligible to participate in this Plan. The Participants and
the company shall be bound by any such amendments as of
their effective dates, but if any outstanding awards are
affected, notice thereof shall be given to the holders of
such awards and such amendments shall not be applicable to
such holder without his or her written consent. If this
Plan is repealed in its entirety, all theretofore awarded
shares subject to conditions or restrictions transferred
pursuant to this Plan shall continue to be subject to such
conditions or restrictions.
2. Article F, paragraph 1 shall not be amended more
than once every six (6) months, other than to comport with
changes in the Internal Revenue Code, the Employee
Retirement Income Security Act, or the rules thereunder.
3. Every recipient of shares pursuant to this Plan
shall be bound by the terms and provisions of this Plan and
of the transfer of shares agreement referable thereto, and
the acceptance of any transfer of shares pursuant to this
Plan shall constitute a binding agreement between the
recipient and the Company.
ARTICLE J -- DURATION OF PLAN.
This Plan shall //be// [[become]] effective as of
January 1, 1994 [[subject to ratification before December
31, 1994]]. //The amendments to this Plan adopted by the
Board on January 10, 1995 are subject to ratification before
December 31, 1995// by the affirmative vote of the holders
of a majority of the Common Stock of the Company present, or
represented, and entitled to vote at a meeting duly held.
Any //Stock Options// [[shares]] awarded prior to approval
of the Plan by the shareholders //are contingent// [[must be
restricted]] until such approval is obtained and shall be
subject to immediate forfeiture in the event such approval
is not obtained [[in which case the Participants would
receive the fees they would have received for their services
as Directors since January 1, 1994 plus interest computed as
of the end of each month at the prime rate then in effect at
Morgan Guaranty Trust Company of New York]]. This Plan will
terminate on December 31, 2003 unless a different
termination date is fixed by the shareholders or by action
of the Board but no such termination shall affect the prior
rights under this Plan of the Company or of anyone to whom
shares have been transferred prior to such termination.
THE PROCTER & GAMBLE COMPANY
(P&G)
Shareholder's Proxy Card
Annual Meeting of Shareholders--Tuesday, October 10, 1995
The undersigned hereby appoints John E. Pepper, Durk I.
Jager and Harald Einsmann, and each of them, as proxies to
attend the annual meeting of shareholders of the Company to
be held on Tuesday, October 10, 1995 at 12 o'clock noon in
Cincinnati, Ohio and any adjournment thereof and vote shares
of Common Stock held by the undersigned directly or via the
Company's Shareholder Investment Program as indicated on the
reverse side of this card: for the election of Directors;
upon the Board of Directors and shareholder proposals
listed; and, finally, upon such other matters as may
properly come before the meeting.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF
THE PROCTER & GAMBLE COMPANY PURSUANT TO A SEPARATE NOTICE
OF ANNUAL MEETING AND PROXY STATEMENT, RECEIPT OF WHICH IS
HEREBY ACKNOWLEDGED. THIS CARD SHOULD BE MAILED IN THE
ENCLOSED ENVELOPE IN TIME TO REACH THE COMPANY'S PROXY
TABULATOR, CHEMICAL BANK, CHURCH STREET STATION, PO BOX
24966, NEW YORK NY 10242-4966, BY 9:00 A.M. ON TUESDAY,
OCTOBER 10, 1995. INDIVIDUAL PROXY VOTING WILL BE KEPT
CONFIDENTIAL BY CHEMICAL BANK AND NOT PROVIDED TO THE
COMPANY.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
____________________________________________________________________
FOLD AND DETACH HERE
PLEASE REMOVE THIS PORTION BEFORE RETURNING PROXY
(CONTINUED FROM OTHER SIDE)
(P&G) THE PROCTER & GAMBLE COMPANY Please mark your
votes as in this X
example
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING ACTIONS
OR PROPOSALS (AS DESCRIBED IN THE ACCOMPANYING PROXY STATEMENT). IF YOU
SIGN AND RETURN THIS CARD WITHOUT MARKING, THIS PROXY CARD WILL
BE TREATED AS BEING FOR EACH ITEM.
ELECTION OF DIRECTORS (terms expiring in 1998)
Nominees: Joseph T. Gorman, Jerry R. Junkins,
Lynn M. Martin, John E. Pepper,
Ralph Snyderman, Robert D. Storey
FOR* WITHHELD *EXCEPT:______________
___ ___ _____________________
RATIFY APPOINTMENT OF INDEPENDENT AUDITORS
FOR AGAINST ABSTAIN
___ ___ ___
RATIFY AMENDMENT OF 1993 NON-EMPLOYEE DIRECTORS' STOCK PLAN
FOR AGAINST ABSTAIN
___ ___ ___
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE
FOLLOWING SHAREHOLDER PROPOSALS (AS DESCRIBED IN THE
ACCOMPANYING PROXY STATEMENT), IF PRESENTED AT THE ANNUAL
MEETING. IF YOU SIGN AND RETURN THIS CARD WITHOUT MARKING,
THIS PROXY CARD WILL BE TREATED AS BEING AGAINST EACH
PROPOSAL.
1. BOARD OF DIRECTORS TERMS
FOR AGAINST ABSTAIN
___ ___ ___
2. ENDORSE CERES PRINCIPLES
FOR AGAINST ABSTAIN
___ ___ ___
3. NOMINATE TWO CANDIDATES FOR EACH BOARD OPENING
FOR AGAINST ABSTAIN
___ ___ ___
4. ELIMINATE EXECUTIVE INCENTIVE COMPENSATION SYSTEM
FOR AGAINST ABSTAIN
___ ___ ___
PLEASE SIGN HERE exactly as
your name(s) appears to the
left.
Give title if you sign as
executor, administrator,
trustee, guardian or corporate
officer.
Signature
Signature
Date
Printed on recycled paper
____________________________________________________________________
FOLD AND DETACH HERE
PLEASE REMOVE THIS PORTION BEFORE RETURNING PROXY
THE PROCTER & GAMBLE COMPANY
(P&G)
Shareholder's Proxy and Confidential
Voting Instruction Card
Annual Meeting of Shareholders--Tuesday, October 10, 1995
The undersigned hereby appoints John E. Pepper, Durk I.
Jager and Harald Einsmann, and each of them (with respect to
any shares of Common Stock held by the undersigned directly
or via the Company's Shareholder Investment Program) as
proxies to attend the annual meeting of shareholders of the
Company to be held on Tuesday, October 10, 1995 at 12
o'clock noon in Cincinnati, Ohio and any adjournment thereof
and vote, and directs the Trustees of the Long-term
Incentive Trust or the Retirement Distribution Trust and the
Employee Stock Ownership Trust of The Procter & Gamble
Profit Sharing Trust and Employee Stock Ownership Plan (as
applicable, with respect to shares of Common Stock and
Series A and B ESOP Convertible Class A Preferred Stock held
for the benefit of the undersigned) and/or the Trustees of
The Procter & Gamble/Noxell Transitional Plan to vote in
person or by proxy at such annual meeting, all shares held
by or for the benefit of the undersigned as indicated on the
reverse side of this card: for the election of Directors;
upon the Board of Directors and shareholder proposals
listed; and, finally, upon such other matters as may
properly come before the meeting.
THIS PROXY/VOTING INSTRUCTION CARD IS SOLICITED JOINTLY
BY THE BOARD OF DIRECTORS OF THE PROCTER & GAMBLE COMPANY
AND THE TRUSTEES OF THE PLAN TRUSTS LISTED ABOVE PURSUANT TO
A SEPARATE NOTICE OF ANNUAL METING AND PROXY STATEMENT,
RECEIPT OF WHICH IS HEREBY ACKNOWLEDGED. THIS CARD SHOULD
BE MAILED IN THE ENCLOSED ENVELOPE IN TIME TO REACH THE
COMPANY'S PROXY TABULATOR, CHEMICAL BANK, CHURCH STREET
STATION, PO BOX 24966, NEW YORK NY 10242-4966, BY 9:00 A.M.
ON TUESDAY, OCTOBER 10 FOR COMMON SHARES TO BE VOTED AND
5:00 P.M. ON MONDAY, OCTOBER 9, 1995 FOR THE TRUSTEES TO
VOTE THE PLAN SHARES. CHEMICAL BANK WILL REPORT SEPARATELY
TO THE PROXY COMMITTEE AND TO THE TRUSTEES AS TO PROXIES
RECEIVED AND VOTING INSTRUCTIONS PROVIDED, RESPECTIVELY.
INDIVIDUAL PROXY VOTING AND VOTING INSTRUCTIONS WILL BE KEPT
CONFIDENTIAL BY CHEMICAL BANK AND NOT PROVIDED TO THE
COMPANY.
The Trustees of each Trust will vote shares of the
Company's Common Stock held by them for which instructions
are not received in direct proportion to the voting of
shares for which instructions have been received, provided
that such voting is not contrary to the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"). The
Trustees will vote unallocated shares, and allocated shares
for which instructions are not received, of the Company's
Series A and B ESOP Convertible Class A Preferred Stock in
direct proportion to voting by allocated shares of such
Series, in aggregate, for which instructions have been
received, provided that such voting is not contrary to
ERISA.
(CONTINUED AND TO BE SIGNED ON OTHER SIDE)
______________________________________________________________________
FOLD AND DETACH HERE
PLEASE REMOVE THIS PORTION BEFORE RETURNING PROXY
(CONTINUED FROM OTHER SIDE)
(P&G) THE PROCTER & GAMBLE COMPANY Please mark your
votes as in this X
example
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR THE FOLLOWING
ACTIONS OR PROPOSALS (AS DESCRIBED IN THE ACCOMPANYING PROXY
STATEMENT). IF YOU SIGN AND RETURN THIS CARD WITHOUT
MARKING, THIS PROXY CARD WILL BE TREATED AS BEING FOR EACH
ITEM.
ELECTION OF DIRECTORS (terms expiring in 1998)
Nominees: Joseph T. Gorman, Jerry R. Junkins,
Lynn M. Martin, John E. Pepper,
Ralph Snyderman, Robert D. Storey
FOR* WITHHELD *EXCEPT:______________
___ ___ _____________________
RATIFY APPOINTMENT OF INDEPENDENT AUDITORS
FOR AGAINST ABSTAIN
___ ___ ___
RATIFY AMENDMENT OF 1993 NON-EMPLOYEE DIRECTORS' STOCK PLAN
FOR AGAINST ABSTAIN
___ ___ ___
THE BOARD OF DIRECTORS RECOMMENDS A VOTE AGAINST THE
FOLLOWING SHAREHOLDER PROPOSALS (AS DESCRIBED IN THE
ACCOMPANYING PROXY STATEMENT), IF PRESENTED AT THE ANNUAL
MEETING. IF YOU SIGN AND RETURN THIS CARD WITHOUT MARKING,
THIS PROXY CARD WILL BE TREATED AS BEING AGAINST EACH
PROPOSAL.
1. BOARD OF DIRECTORS TERMS
FOR AGAINST ABSTAIN
___ ___ ___
2. ENDORSE CERES PRINCIPLES
FOR AGAINST ABSTAIN
___ ___ ___
3. NOMINATE TWO CANDIDATES FOR EACH BOARD OPENING
FOR AGAINST ABSTAIN
___ ___ ___
4. ELIMINATE EXECUTIVE INCENTIVE COMPENSATION SYSTEM
FOR AGAINST ABSTAIN
___ ___ ___
PLEASE SIGN HERE exactly as
your name appears to the left
Signature
Date
Printed on recycled paper
______________________________________________________________________
FOLD AND DETACH HERE
PLEASE REMOVE THIS PORTION BEFORE RETURNING PROXY
APPENDIX 1
Language in Appendix A to be added to the The Procter &
Gamble 1993 Non-Employee Directors' Stock Plan is preceded
and followed by "//" marks. Language in Appendix A to be
deleted is preceded by "[[" marks and followed by "]]"
marks.