Clorox Co 10-Q for FY2027 Q1
Clorox Co (CLX)
10-Q
2026-11-02
For: 2026-09-30
View Original
Added on
November 02, 2026
About this 10-Q
Clorox Co filed this 10-Q on November 2, 2026, covering the quarter ended September 30, 2026 (FY2027 Q1).
The Clorox Company reported net sales of 1,905, up 33%, and diluted EPS of 1.39, up 114%, in the quarter ended September 30, 2026; gross margin declined to 40.4% as higher commodity, manufacturing and logistics costs offset volume and savings. AI summary
Headline figures
Quarter ended September 30, 2026, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Revenue
- $1.91B
- up 33.3% from $1.43B a year earlier
- Net income
- $170M
- up 112.5% from net income of $80M a year earlier
- Diluted EPS
- $1.39
- up 113.8% from $0.65 a year earlier
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
| (Mark One) | ||||||||||||||
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | ||||||||||||||
For the quarterly period ended September 30, 2026 .
OR
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
For the transition period from to
Commission File Number: 1-07151
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of | (I.R.S. Employer Identification No.) | ||||
| incorporation or organization) | |||||
(Address of principal executive offices) (Zip code)
(510 ) 271-7000
(Registrant’s telephone number, including area code)
| (Former name, former address and former fiscal year, if changed since last report) | ||||||||
| ___________________ | ||||||||
| Securities registered pursuant to Section 12(b) of the Act: | ||||||||
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| ☑ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller Reporting Company | Emerging Growth Company | |||||||||||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
As of October 19, 2026, there were 121,147,396 shares outstanding of the registrant’s common stock ($1.00 par value).
1
TABLE OF CONTENTS
Page | ||||||||
2
PART I – FINANCIAL INFORMATION
Item 1. Financial Statements
The Clorox Company
Condensed Consolidated Statements of Earnings (Unaudited)
(Dollars in millions, except per share data)
| Three months ended | |||||||||||||||||||||||
| 9/30/2026 | 9/30/2025 | ||||||||||||||||||||||
| Net sales | $ | $ | |||||||||||||||||||||
| Cost of products sold | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Selling and administrative expenses | |||||||||||||||||||||||
| Advertising costs | |||||||||||||||||||||||
| Research and development costs | |||||||||||||||||||||||
| Interest expense | |||||||||||||||||||||||
| Other (income) expense, net | ( | ||||||||||||||||||||||
Earnings before income taxes | |||||||||||||||||||||||
Income tax expense | |||||||||||||||||||||||
Net earnings | |||||||||||||||||||||||
| Less: Net earnings attributable to noncontrolling interests | |||||||||||||||||||||||
Net earnings attributable to Clorox | $ | $ | |||||||||||||||||||||
Net earnings per share attributable to Clorox | |||||||||||||||||||||||
Basic net earnings per share | $ | $ | |||||||||||||||||||||
Diluted net earnings per share | $ | $ | |||||||||||||||||||||
| Weighted average shares outstanding (in thousands) | |||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
See Notes to Condensed Consolidated Financial Statements (Unaudited)
3
The Clorox Company
Condensed Consolidated Statements of Comprehensive Income (Unaudited)
(Dollars in millions)
| Three months ended | |||||||||||||||||||||||
| 9/30/2026 | 9/30/2025 | ||||||||||||||||||||||
Net earnings | $ | $ | |||||||||||||||||||||
| Other comprehensive income (loss), net of tax: | |||||||||||||||||||||||
| Foreign currency translation adjustments | ( | ||||||||||||||||||||||
| Net unrealized gains (losses) on derivatives | ( | ||||||||||||||||||||||
| Pension and postretirement benefit adjustments | ( | ||||||||||||||||||||||
| Total other comprehensive (loss) income, net of tax | ( | ( | |||||||||||||||||||||
Comprehensive income | |||||||||||||||||||||||
| Less: Total comprehensive income attributable to noncontrolling interests | |||||||||||||||||||||||
Total comprehensive income attributable to Clorox | $ | $ | |||||||||||||||||||||
See Notes to Condensed Consolidated Financial Statements (Unaudited)
4
The Clorox Company
Condensed Consolidated Balance Sheets
(Dollars in millions, except per share data)
| 9/30/2026 | 6/30/2026 | ||||||||||
(Unaudited) | |||||||||||
| ASSETS | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Receivables, net | |||||||||||
| Inventories, net | |||||||||||
| Prepaid expenses and other current assets | |||||||||||
| Total current assets | |||||||||||
Property, plant and equipment, net of accumulated depreciation and amortization of $ | |||||||||||
| Operating lease right-of-use assets | |||||||||||
| Goodwill | |||||||||||
| Trademarks, net | |||||||||||
| Other intangible assets, net | |||||||||||
| Other assets | |||||||||||
| Total assets | $ | $ | |||||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Current liabilities | |||||||||||
| Notes and loans payable | $ | $ | |||||||||
| Current maturities of long-term debt | |||||||||||
| Current operating lease liabilities | |||||||||||
| Accounts payable and accrued liabilities | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Long-term operating lease liabilities | |||||||||||
| Other liabilities | |||||||||||
| Deferred income taxes | |||||||||||
| Total liabilities | |||||||||||
| Commitments and contingencies | |||||||||||
| Stockholders’ equity | |||||||||||
Preferred stock: $ | |||||||||||
Common stock: $ | |||||||||||
| Additional paid-in capital | |||||||||||
| Retained earnings | |||||||||||
Treasury stock, at cost: and June 30, 2026, respectively | ( | ( | |||||||||
| Accumulated other comprehensive net (loss) income | ( | ( | |||||||||
Total Clorox stockholders’ (deficit) equity | ( | ||||||||||
| Noncontrolling interests | |||||||||||
| Total stockholders’ equity | |||||||||||
| Total liabilities and stockholders’ equity | $ | $ | |||||||||
See Notes to Condensed Consolidated Financial Statements (Unaudited)
5
The Clorox Company
Condensed Consolidated Statements of Cash Flows (Unaudited)
(Dollars in millions)
| Three months ended | |||||||||||
| 9/30/2026 | 9/30/2025 | ||||||||||
| Operating activities: | |||||||||||
Net earnings | $ | $ | |||||||||
Adjustments to reconcile net earnings to net cash provided by operations: | |||||||||||
| Depreciation and amortization | |||||||||||
| Stock-based compensation | |||||||||||
| Deferred income taxes | |||||||||||
| Other | ( | ||||||||||
| Changes in: | |||||||||||
| Receivables, net | |||||||||||
| Inventories, net | ( | ( | |||||||||
| Prepaid expenses and other current assets | ( | ( | |||||||||
| Accounts payable and accrued liabilities | ( | ( | |||||||||
| Operating lease right-of-use assets and liabilities, net | ( | ( | |||||||||
| Income taxes payable / prepaid | ( | ( | |||||||||
| Net cash provided by operations | |||||||||||
| Investing activities: | |||||||||||
| Capital expenditures | ( | ( | |||||||||
| Other | |||||||||||
Net cash used for investing activities | ( | ( | |||||||||
| Financing activities: | |||||||||||
| Notes and loans payable, net | |||||||||||
| Treasury stock purchased | ( | ||||||||||
| Cash dividends paid to Clorox stockholders | ( | ( | |||||||||
| Issuance of common stock for employee stock plans and other | ( | ||||||||||
| Net cash used for financing activities | ( | ( | |||||||||
| Effect of exchange rate changes on cash, cash equivalents and restricted cash | ( | ||||||||||
| Net increase (decrease) in cash, cash equivalents and restricted cash | ( | ||||||||||
| Cash, cash equivalents and restricted cash: | |||||||||||
| Beginning of period | |||||||||||
| End of period | $ | $ | |||||||||
See Notes to Condensed Consolidated Financial Statements (Unaudited)
6
The Clorox Company
Notes to Condensed Consolidated Financial Statements (Unaudited)
(Dollars in millions, except per share data)
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The unaudited interim condensed consolidated financial statements for the three months ended September 30, 2026 and 2025, in the opinion of management, reflect all normal and recurring adjustments considered necessary for a fair presentation of the consolidated results of operations, financial position and cash flows of The Clorox Company and its controlled subsidiaries (the Company or Clorox) for the periods presented. However, the financial results for interim periods are not necessarily indicative of the results that may be expected for a full fiscal year or for any other future period. Percentage and basis point calculations are based on rounded numbers, except for per share data and the effective tax rate.
Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles in the United States (U.S. GAAP) have been omitted or condensed pursuant to the rules and regulations of the U.S. Securities and Exchange Commission (SEC). The information in this report should be read in conjunction with the Company’s Annual Report on Form 10-K filed with the SEC for the fiscal year ended June 30, 2026, which includes a complete set of footnote disclosures, including the Company’s significant accounting policies.
Recently Issued Accounting Standards
Recently Issued Accounting Standards Not Yet Adopted
In September 2025, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2025-06, “Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (ASU 2025-06)”, which modernizes the accounting for internal-use software to current development practices, clarifies when to begin capitalizing costs and enhances disclosure requirements. The ASU is effective for annual reporting periods beginning after December 15, 2027, and for interim periods within those annual reporting periods, with early adoption permitted as of the beginning of an annual reporting period. The Company is currently evaluating the impact that the adoption of this guidance will have on its consolidated financial statements.
In November 2024, the FASB issued ASU No. 2024-03, “Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses.” These amendments primarily require enhanced quantitative and qualitative disclosures in the notes to the financial statements for specific expense categories underlying the expenses presented on the income statement. These amendments are to be applied prospectively to financial statements issued after the effective date or retrospectively to any or all periods presented in the financial statements. Early adoption is permitted. The standard will be effective for annual periods beginning after December 15, 2026, and subsequent interim periods. The Company is currently evaluating the impact that the adoption of this guidance will have on the Company’s disclosures.
NOTE 2. BUSINESS ACQUIRED
On April 1, 2026, the Company completed the acquisition of GOJO Industries, Inc. (GOJO), makers of Purell and a leader of skin health and hygiene solutions. The Company acquired all of the issued and outstanding membership interests of GOJO, which is based in northeast Ohio. The acquisition reflects the Company's strategy to expand its position in health and hygiene and accelerate profitable growth. The acquired business now operates as part of Clorox Purell ProCare and is included within the Professional Products operating segment.
The acquisition was completed for cash consideration of approximately $2,147 , which includes post-closing working capital and other adjustments, and was funded through commercial paper borrowings and new debt.
The GOJO acquisition was accounted for as a business combination under the acquisition method of accounting. The purchase consideration was allocated to the tangible and identifiable intangible assets acquired and liabilities assumed based on their fair values at the acquisition date, with the excess allocated to goodwill. This allocation was performed based on information available at the acquisition date and is subject to change during the measurement period not to exceed one year. The final fair value determination could result in adjustments to the values presented in the preliminary purchase price allocation. Clorox Purell ProCare's operating results and all of the goodwill derived from the acquisition are included within the Health and Wellness reportable segment. The goodwill derived from this acquisition is deductible for tax purposes. The goodwill represents expected synergies from complementary expertise and business-to-business capabilities as well as both near-term and long-term strategic value to the Company.
7
NOTE 2. BUSINESS ACQUIRED (Continued)
The following table summarizes the preliminary fair values of the assets acquired and liabilities assumed as of the acquisition date, which include immaterial measurement period adjustments.
| Preliminary Allocation | ||||||||
| Assets acquired: | ||||||||
| Cash and cash equivalents | $ | |||||||
| Receivables, net | ||||||||
| Inventories, net | ||||||||
| Prepaid expenses and other current assets | ||||||||
| Property, plant and equipment, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Goodwill | ||||||||
| Trademarks, net | ||||||||
| Other intangible assets, net | ||||||||
| Other assets (non-current) | ||||||||
| Total assets acquired | $ | |||||||
| Liabilities assumed: | ||||||||
| Accounts payable and accrued liabilities | $ | |||||||
| Current operating lease liabilities | ||||||||
| Income taxes payable | ||||||||
| Current maturities of long-term debt | ||||||||
| Long-term debt | ||||||||
| Long-term operating lease liabilities | ||||||||
| Other liabilities (non-current) | ||||||||
| Total liabilities assumed | $ | |||||||
| Less: Noncontrolling interests | ( | |||||||
| Purchase consideration | $ | |||||||
Trademarks acquired include $465 assigned an indefinite useful life and $22 assigned a useful life of 15 years. Acquired intangible assets included in Other intangible assets, net are made up of customer relationships valued at $547 and assigned a useful life of 20 years and developed technology valued at $22 and assigned a useful life of 7 years.
NOTE 3. INVENTORIES, NET
Inventories, net consisted of the following as of:
| 9/30/2026 | 6/30/2026 | ||||||||||
| Finished goods | $ | $ | |||||||||
| Raw materials and packaging | |||||||||||
| Work in process | |||||||||||
| LIFO allowances | ( | ( | |||||||||
| Total inventories, net | $ | $ | |||||||||
Less: Non-current inventories, net (1) | |||||||||||
| Total current inventories, net | $ | $ | |||||||||
(1)Non-current inventories, net is recorded in Other assets.
8
NOTE 4. SUPPLY CHAIN FINANCING PROGRAM
The Company has arranged for a global financial institution to offer a voluntary supply chain finance (SCF) program for the benefit of the Company’s suppliers. The Company’s current payment terms do not exceed 120 days in keeping with industry standards. The Company’s operating cash flows are directly impacted as a result of the extension of payment terms with suppliers. The SCF program enables suppliers to directly contract with the financial institution to receive payment from the financial institution prior to the payment terms between the Company and the supplier by selling the Company’s payables to the financial institution. Participation in the program is at the sole discretion of the supplier and the Company has no economic interest in a supplier's decision to enter into the agreement and has no direct financial relationship with the financial institution, as it relates to the SCF program. Once a supplier elects to participate in the SCF program and reaches an agreement with the financial institution, the supplier elects which individual Company invoices to sell to the financial institution. The terms of the Company’s payment obligations are not impacted by a supplier’s participation in the program and as such, the SCF program has no direct impact on the Company’s balance sheets or liquidity. The Company has not pledged any assets as security or provided guarantees under the SCF program.
NOTE 5. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS
Financial Risk Management and Derivative Instruments
The Company is exposed to certain commodity, foreign currency and interest rate risks related to its ongoing business operations and uses derivative instruments to mitigate its exposure to these risks.
Commodity Price Risk Management
The Company may use commodity futures, options and swap contracts to limit the impact of price volatility on a portion of its forecasted raw material requirements. These commodity derivatives may be exchange traded or over-the-counter contracts and generally have original contractual maturities of less than 2 years. Commodity purchase and options contracts are measured at fair value using market quotations obtained from the Chicago Board of Trade commodity futures exchange and commodity derivative dealers.
The notional amounts of outstanding commodity derivatives, which related primarily to exposures in soybean oil used for the food business and jet fuel used for the grilling business, were $34 and $43 as of September 30, 2026 and June 30, 2026, respectively.
Foreign Currency Risk Management
The Company may also enter into certain over-the-counter derivative contracts to manage a portion of the Company’s forecasted foreign currency exposure associated with the purchase of inventory. These foreign currency contracts generally have original contractual maturities of less than 2 years. The foreign exchange contracts are measured at fair value using information quoted by foreign exchange dealers.
The notional amounts of outstanding foreign currency forward contracts used by the Company’s subsidiaries to hedge forecasted purchases of inventory were $38 and $30 as of September 30, 2026 and June 30, 2026, respectively.
Interest Rate Risk Management
The Company may enter into over-the-counter interest rate contracts to fix a portion of the benchmark interest rate prior to the anticipated issuance of fixed rate debt. These interest rate contracts generally have original contractual maturities of less than 3 years. The interest rate contracts are measured at fair value using information quoted by bond dealers.
The Company held no interest rate contracts as of both September 30, 2026 and June 30, 2026.
Commodity, Foreign Exchange and Interest Rate Derivatives
The Company designates its commodity forward, futures and options contracts for forecasted purchases of raw materials, foreign currency forward contracts for forecasted purchases of inventory and interest rate contracts for forecasted interest payments as cash flow hedges.
9
NOTE 5. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued)
The effects of derivative instruments designated as hedging instruments on Other comprehensive (loss) income and Net earnings were as follows:
| Gains (losses) recognized in Other comprehensive (loss) income | |||||||||||||||||||||||
| Three months ended | |||||||||||||||||||||||
| 9/30/2026 | 9/30/2025 | ||||||||||||||||||||||
| Commodity purchase derivative contracts | $ | $ | |||||||||||||||||||||
| Foreign exchange derivative contracts | |||||||||||||||||||||||
| Interest rate derivative contracts | |||||||||||||||||||||||
| Total | $ | $ | |||||||||||||||||||||
| Location of gains (losses) reclassified from Accumulated other comprehensive net (loss) income into Net earnings | Gains (losses) reclassified from Accumulated other comprehensive net (loss) income and recognized in Net earnings | |||||||||||||||||||||||||
| Three months ended | ||||||||||||||||||||||||||
| 9/30/2026 | 9/30/2025 | |||||||||||||||||||||||||
| Commodity purchase derivative contracts | Cost of products sold | $ | $ | |||||||||||||||||||||||
| Foreign exchange derivative contracts | Cost of products sold | ( | ||||||||||||||||||||||||
| Interest rate derivative contracts | Interest expense | |||||||||||||||||||||||||
| Total | $ | $ | ||||||||||||||||||||||||
The estimated amount of the existing net gain (loss) in Accumulated other comprehensive net (loss) income as of September 30, 2026 that is expected to be reclassified into Net earnings within the next twelve months is $25 .
Counterparty Risk Management and Derivative Contract Requirements
The Company utilizes a variety of financial institutions as counterparties for over-the-counter derivative instruments. The Company enters into agreements governing the use of over-the-counter derivative instruments and sets internal limits on the aggregate over-the-counter derivative instrument positions held with each counterparty. The Company is in compliance with all agreements related to its counterparty risk management and derivative contracts. As of both September 30, 2026 and June 30, 2026, the Company and each of its counterparties had been assigned investment grade ratings by both Standard & Poor’s and Moody’s.
Financial assets and liabilities measured at fair value on a recurring basis in the condensed consolidated balance sheets are required to be classified and disclosed in one of the following three categories of the fair value hierarchy:
Level 1: Quoted market prices in active markets for identical assets or liabilities.
Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data.
Level 3: Unobservable inputs reflecting the reporting entity’s own assumptions.
As of both September 30, 2026 and June 30, 2026, the Company’s financial assets and liabilities that were measured at fair value on a recurring basis during the period included derivative financial instruments, which were classified as either Level 1 or Level 2, and trust assets to fund the Company’s nonqualified deferred compensation plans, which were classified as Level 1.
Derivative assets were $10 and $5 and derivative liabilities were $0 and $1 as of September 30, 2026 and June 30, 2026, respectively.
10
NOTE 5. FINANCIAL INSTRUMENTS AND FAIR VALUE MEASUREMENTS (Continued)
The following table provides information about the balance sheet classification and the fair values of the Company’s other assets and liabilities for which disclosure of fair value is required:
| 9/30/2026 | 6/30/2026 | ||||||||||||||||||||||||||||||||||
| Balance sheet classification | Fair value hierarchy level | Carrying Amount | Estimated Fair Value | Carrying Amount | Estimated Fair Value | ||||||||||||||||||||||||||||||
| Assets | |||||||||||||||||||||||||||||||||||
| Interest-bearing investments, including money market funds | Cash and cash equivalents (1) | 1 | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Time deposits | Cash and cash equivalents (1) | 2 | |||||||||||||||||||||||||||||||||
| Trust assets for nonqualified deferred compensation plans | Other assets | 1 | |||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
| Liabilities | |||||||||||||||||||||||||||||||||||
| Notes and loans payable | Notes and loans payable (2) | 2 | $ | $ | $ | $ | |||||||||||||||||||||||||||||
| Long-term debt | Current maturities of long-term debt and Long-term debt (3) | 2 | |||||||||||||||||||||||||||||||||
| $ | $ | $ | $ | ||||||||||||||||||||||||||||||||
(1)Cash and cash equivalents are composed of time deposits and other interest-bearing investments, including money market funds with original maturity dates of 90 days or less. Cash and cash equivalents are recorded at cost, which approximates fair value.
(2)Notes and loans payable are composed of outstanding U.S. commercial paper balances and/or amounts drawn on the Company’s credit agreements, all of which are recorded at cost, which approximates fair value.
(3)Long-term debt is recorded at cost. The fair value of Long-term debt was determined using secondary market prices quoted by corporate bond dealers, and is classified as Level 2.
NOTE 6. INCOME TAXES
NOTE 7. NET EARNINGS PER SHARE (EPS)
The following is the reconciliation of the weighted average number of shares outstanding (in thousands) used to calculate basic net EPS to those used to calculate diluted net EPS:
| Three months ended | |||||||||||||||||||||||
| 9/30/2026 | 9/30/2025 | ||||||||||||||||||||||
| Basic | |||||||||||||||||||||||
| Dilutive effect of stock options and other | |||||||||||||||||||||||
| Diluted | |||||||||||||||||||||||
| Antidilutive stock options and other | |||||||||||||||||||||||
Basic net earnings per share and Diluted net earnings per share are calculated on Net earnings attributable to Clorox.
11
NOTE 8. OTHER (INCOME) EXPENSE, NET
The major components of Other (income) expense, net were:
| Three months ended | |||||||||||||||||||||||
| 9/30/2026 | 9/30/2025 | ||||||||||||||||||||||
Amortization of trademarks and other intangible assets(1) | $ | $ | |||||||||||||||||||||
Trust investment (gains) losses, net | ( | ||||||||||||||||||||||
Net periodic benefit (credit) cost | |||||||||||||||||||||||
Foreign exchange transaction losses, net | |||||||||||||||||||||||
| Income from equity investees | ( | ( | |||||||||||||||||||||
| Interest income | ( | ( | |||||||||||||||||||||
| Other | ( | ||||||||||||||||||||||
| Total | $ | $ | ( | ||||||||||||||||||||
(1)Increase is primarily driven by the GOJO acquisition. Refer to Note 2 for further information.
NOTE 9. STOCKHOLDERS ’ EQUITY
Changes in the components of Stockholders’ equity were as follows for the periods indicated:
| Three months ended September 30 | |||||||||||||||||||||||||||||||||||||||||||||||||||||
(Dollars in millions except per share data; shares in thousands) | Common stock | Additional paid-in capital | Retained earnings | Treasury stock | Accumulated other comprehensive net (loss) income | Noncontrolling interests | Total stockholders’ equity | ||||||||||||||||||||||||||||||||||||||||||||||
| Amount | Shares | Amount | Shares | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2025 | $ | $ | $ | $ | ( | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Net earnings | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive (loss) income | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Dividends to Clorox stockholders ($ | — | — | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Dividends to noncontrolling interests | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Other employee stock plan activities | — | — | ( | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Treasury stock purchased | — | — | — | — | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2025 | $ | $ | $ | $ | ( | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Balance as of June 30, 2026 | $ | $ | $ | $ | ( | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
| Net earnings | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Other comprehensive (loss) income | — | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
Dividends to Clorox stockholders ($ | — | — | — | ( | — | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Dividends to noncontrolling interests | — | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Other employee stock plan activities | — | — | ( | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance as of September 30, 2026 | $ | $ | $ | $ | ( | ( | $ | ( | $ | $ | |||||||||||||||||||||||||||||||||||||||||||
12
NOTE 9. STOCKHOLDERS’ EQUITY (Continued)
Changes in Accumulated other comprehensive net (loss) income attributable to Clorox by component were as follows for the periods indicated:
| Three months ended September 30 | |||||||||||||||||||||||
| Foreign currency translation adjustments | Net unrealized gains (losses) on derivatives | Pension and postretirement benefit adjustments | Accumulated other comprehensive net (loss) income | ||||||||||||||||||||
| Balance as of June 30, 2025 | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
| Other comprehensive (loss) income before reclassifications | ( | ( | |||||||||||||||||||||
Amounts reclassified from Accumulated other comprehensive net (loss) income | ( | ( | |||||||||||||||||||||
| Income tax benefit (expense) | |||||||||||||||||||||||
| Net current period other comprehensive (loss) income | ( | ( | ( | ||||||||||||||||||||
| Balance as of September 30, 2025 | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
| Balance as of June 30, 2026 | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
| Other comprehensive (loss) income before reclassifications | |||||||||||||||||||||||
Amounts reclassified from Accumulated other comprehensive net (loss) income | ( | ( | ( | ||||||||||||||||||||
Income tax benefit (expense) | ( | ( | |||||||||||||||||||||
| Net current period other comprehensive (loss) income | ( | ( | |||||||||||||||||||||
| Balance as of September 30, 2026 | $ | ( | $ | $ | ( | $ | ( | ||||||||||||||||
NOTE 10. OTHER CONTINGENCIES AND GUARANTEES
Contingencies
The Company is involved in certain environmental matters, including response actions at various locations. The Company recorded liabilities totaling $28
From time to time, the Company is subject to various legal proceedings, claims and other loss contingencies, including, without limitation, loss contingencies relating to contractual arrangements (including costs connected to the transition and unwinding of certain supply and manufacturing relationships), product liability, patents and trademarks, advertising, labor and employment, environmental, health and safety and other matters. With respect to these proceedings, claims and other loss contingencies, while considerable uncertainty exists, in the opinion of management at this time, the ultimate disposition of these matters, to the extent not previously provided for, will not have a material adverse effect, either individually or in the aggregate, on the Company’s condensed consolidated financial statements taken as a whole.
Guarantees
In conjunction with acquisitions, divestitures, and other transactions, the Company has provided certain indemnifications (e.g., indemnifications for representations and warranties and retention of previously existing environmental, tax and employee liabilities) that have terms that vary in duration and in the potential amount of the total obligation and, in many circumstances, are not explicitly defined. The Company has not made, nor does it believe that it is probable that it will make, any material payments relating to its indemnifications and believes that any reasonably possible payments would not have a material adverse effect, either individually or in the aggregate, on the Company’s condensed consolidated financial statements taken as a whole.
The Company had not recorded any material liabilities on the aforementioned guarantees as of both September 30, 2026 and June 30, 2026.
The Company was a party to letters of credit of $16 as of September 30, 2026, primarily related to insurance carriers, of which $0 had been drawn upon.
13
NOTE 11. SEGMENT RESULTS
The Company operates through strategic business units (SBUs) which are organized into operating segments. Operating segments are then aggregated into four reportable segments: Health and Wellness, Household, Lifestyle and International. Operating segments not aggregated into a reportable segment are reflected in Corporate and Other.
Corporate and Other includes certain non-allocated administrative and other costs and various other non-operating income and expenses. Assets in Corporate and Other include cash and cash equivalents, prepaid expenses and other current assets, property and equipment, operating lease right-of-use assets, other long-term assets and deferred taxes.
The principal measure of segment profitability used by the Chief Operating Decision Maker (CODM), identified as the Company's Chair and Chief Executive Officer, is segment adjusted earnings (losses) before interest and income taxes (segment adjusted EBIT). Segment adjusted EBIT is defined as earnings (losses) before income taxes excluding interest income, interest expense and other significant items that are nonrecurring or unusual (such as asset impairments, charges related to the digital capabilities and productivity enhancements investment, transaction and integration costs related to acquisitions, significant losses related to divestitures and other nonrecurring or unusual items impacting comparability).
The CODM uses this measure to assess the operating results and performance of its segments, monitor actual results as compared to plan, perform analytical comparisons, identify strategies to improve performance and allocate resources to each segment as it removes the impact of the items that management believes do not directly reflect the performance of each segment’s underlying operations.
Net sales by segment and a reconciliation to the Company’s consolidated net sales for the three months ended September 30:
| Net sales | ||||||||||||||||||||||||||
| Three months ended | ||||||||||||||||||||||||||
| 9/30/2026 | 9/30/2025 | |||||||||||||||||||||||||
| Health and Wellness | $ | $ | ||||||||||||||||||||||||
| Household | ||||||||||||||||||||||||||
| Lifestyle | ||||||||||||||||||||||||||
| International | ||||||||||||||||||||||||||
Reportable segment total | $ | $ | ||||||||||||||||||||||||
| Corporate and Other | ||||||||||||||||||||||||||
| Total | $ | $ | ||||||||||||||||||||||||
All intersegment sales are eliminated and are not included in the Company’s reportable segments’ net sales.
Segment adjusted EBIT, including the significant segment expense provided to the CODM, and a reconciliation to earnings before income taxes for the three months ended September 30:
| Segment adjusted earnings (losses) before interest and income taxes | |||||||||||||||||||||||||||||
| Three months ended September 30, 2026 | |||||||||||||||||||||||||||||
Health and Wellness | Household | Lifestyle | International | Total | |||||||||||||||||||||||||
Net sales | $ | $ | $ | $ | |||||||||||||||||||||||||
Cost of products sold | |||||||||||||||||||||||||||||
Other segment items (1) | |||||||||||||||||||||||||||||
Segment adjusted EBIT | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Corporate and Other | ( | ||||||||||||||||||||||||||||
| Interest income | |||||||||||||||||||||||||||||
| Interest expense | ( | ||||||||||||||||||||||||||||
Acquisition and integration costs (2) | ( | ||||||||||||||||||||||||||||
Earnings before income taxes | $ | ||||||||||||||||||||||||||||
14
NOTE 11. SEGMENT RESULTS (Continued)
(1)Other segment items includes selling and administrative expenses, advertising costs, research and development costs and other income and expenses. The items defined in segment adjusted EBIT above are excluded from other segment items and Corporate and Other.
(2)Represents the expenses related to the Company’s acquisition and integration of GOJO corresponding to Health and Wellness and Corporate and Other. As a result of this transaction, various acquisition and integration-related costs related to the acquisition and efforts to integrate the recently acquired business to the Company’s systems and processes were and will be incurred. These costs include inventory step-up charges representing expense recognition of fair value adjustments in excess of the historical cost basis of inventory obtained through the acquisition, as well as direct acquisition transaction costs and legal-entity, operational, manufacturing, and information technology integration costs.
| Segment adjusted earnings (losses) before interest and income taxes | |||||||||||||||||||||||||||||
| Three months ended September 30, 2025 | |||||||||||||||||||||||||||||
Health and Wellness | Household | Lifestyle | International | Total | |||||||||||||||||||||||||
Net sales | $ | $ | $ | $ | |||||||||||||||||||||||||
Cost of products sold | |||||||||||||||||||||||||||||
Other segment items (1) | |||||||||||||||||||||||||||||
Segment adjusted EBIT | $ | $ | $ | $ | $ | ||||||||||||||||||||||||
Corporate and Other | ( | ||||||||||||||||||||||||||||
| Interest income | |||||||||||||||||||||||||||||
| Interest expense | ( | ||||||||||||||||||||||||||||
Digital capabilities and productivity enhancements investment (2) | ( | ||||||||||||||||||||||||||||
Earnings before income taxes | $ | ||||||||||||||||||||||||||||
(1)Other segment items includes selling and administrative expenses, advertising costs, research and development costs and other income and expenses. The items defined in segment adjusted EBIT above are excluded from other segment items and Corporate and Other.
(2)Represents expenses related to the Company’s digital capabilities and productivity enhancements investment corresponding to Corporate and Other.
Certain other segment disclosures were as follows:
| Health and Wellness | Household | Lifestyle | International | Corporate and Other | Total Company | |||||||||||||||||||||
| Total assets | ||||||||||||||||||||||||||
Balance as of 9/30/2026 | $ | $ | $ | $ | $ | $ | ||||||||||||||||||||
Balance as of 6/30/2026 | ||||||||||||||||||||||||||
| (Income) Loss from equity investees included in Other (income) expense, net | ||||||||||||||||||||||||||
Three months ended 9/30/2026 | ( | ( | ||||||||||||||||||||||||
Three months ended 9/30/2025 | ( | ( | ||||||||||||||||||||||||
| Capital expenditures | ||||||||||||||||||||||||||
Three months ended 9/30/2026 | ||||||||||||||||||||||||||
Three months ended 9/30/2025 | ||||||||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||||||||
Three months ended 9/30/2026 | ||||||||||||||||||||||||||
Three months ended 9/30/2025 | ||||||||||||||||||||||||||
Significant noncash charges included in earnings before interest and income taxes: | ||||||||||||||||||||||||||
| Stock-based compensation | ||||||||||||||||||||||||||
Three months ended 9/30/2026 | ||||||||||||||||||||||||||
Three months ended 9/30/2025 | ||||||||||||||||||||||||||
15
NOTE 11. SEGMENT RESULTS (Continued)
Net sales to the Company’s largest customer, Walmart Inc. and its affiliates, as a percentage of consolidated net sales, was 25 % for the three months ended September 30, 2026, and 26 % for the three months ended September 30, 2025.
The following table provides Net sales as a percentage of the Company’s consolidated net sales, disaggregated by operating segment, for the periods indicated:
| Net sales | |||||||||||||||||||||||
| Three months ended | |||||||||||||||||||||||
| 9/30/2026 | 9/30/2025 | ||||||||||||||||||||||
| Cleaning | % | % | |||||||||||||||||||||
| Professional Products | |||||||||||||||||||||||
| Health and Wellness | % | % | |||||||||||||||||||||
| Bags and Wraps | |||||||||||||||||||||||
| Cat Litter | |||||||||||||||||||||||
| Grilling | |||||||||||||||||||||||
| Household | % | % | |||||||||||||||||||||
| Food | |||||||||||||||||||||||
| Water Filtration | |||||||||||||||||||||||
| Natural Personal Care | |||||||||||||||||||||||
| Lifestyle | % | % | |||||||||||||||||||||
| International | % | % | |||||||||||||||||||||
| Corporate and Other | % | % | |||||||||||||||||||||
| Total Company | % | % | |||||||||||||||||||||
16
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The Clorox Company
(Dollars in millions, except per share data)
(Dollars in millions, except per share data)
Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is designed to provide a reader of The Clorox Company’s (the Company or Clorox) financial statements with a narrative from the perspective of management on the Company’s financial condition, results of operations, liquidity and certain other factors that may affect future results. The following discussion of the Company’s financial condition and results of operations should be read in conjunction with MD&A and the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2026, which was filed with the SEC on August 7, 2026, and the unaudited condensed consolidated financial statements and related notes contained in this Quarterly Report on Form 10-Q (this Report). Unless otherwise noted, MD&A compares the three month period ended September 30, 2026 (the current period) to the three month period ended September 30, 2025 (the prior period), with percentage and basis point calculations based on rounded numbers, except for per share data and the effective tax rate.
EXECUTIVE OVERVIEW
The Clorox Company is a leading multinational manufacturer and marketer of consumer and professional products with approximately 9,200 employees worldwide. The Company has operations in approximately 25 countries or territories and sells its products in approximately 95 markets, primarily through mass retailers; grocery outlets; warehouse clubs; dollar stores; home hardware centers; drug, pet and military stores; third-party and owned e-commerce channels; and distributors. Clorox markets some of the most trusted and recognized consumer brand names, including Clorox® cleaning and disinfecting products; Pine-Sol® cleaner; Liquid-Plumr® clog removers; Poett® home care products; Glad® bags and wraps; Fresh Step® cat litter; Kingsford® grilling products; Hidden Valley® dressings, dips, seasonings and sauces; Brita® water-filtration products; and Burt’s Bees® natural personal care products. The Company also markets industry-leading products and technologies for professional customers, including those sold under the Purell ®, CloroxPro™ and Clorox Healthcare® brand names.
The Company primarily markets its leading brands in midsized categories considered to be financially attractive. Most of the Company’s products compete with other nationally advertised brands within each category and with “private label” brands. Over 80% of the Company’s sales are generated from brands that hold the No. 1 or No. 2 market share position in their categories.
The Company operates through strategic business units (SBUs) which are organized into operating segments. Operating segments are then aggregated into four reportable segments: Health and Wellness, Household, Lifestyle and International. Operating segments not aggregated into a reportable segment are reflected in Corporate and Other. The four reportable segments consist of the following:
•Health and Wellness consists of cleaning, disinfecting, sanitizing and professional products marketed and sold in the United States. Products within this segment include home care cleaning and disinfecting products and laundry additives, primarily under the Clorox, Clorox2, Pine-Sol, Scentiva, Tilex, Liquid-Plumr and Formula 409 brands; skin sanitization and cleaning products under the Purell and GOJO brands; professional cleaning and disinfecting products under the CloroxPro and Clorox Healthcare brands; and professional food service products under the Hidden Valley brand.
•Household consists of bags and wraps, cat litter and grilling products marketed and sold in the United States. Products within this segment include bags and wraps under the Glad brand; cat litter, primarily under the Fresh Step and Scoop Away brands; and grilling products under the Kingsford brand.
•Lifestyle consists of food, water filtration and natural personal care products marketed and sold in the United States. Products within this segment include dressings, dips, seasonings and sauces, primarily under the Hidden Valley brand; water-filtration products under the Brita brand; and natural personal care products under the Burt’s Bees brand.
•International consists of products sold outside the United States. Products within this segment include laundry additives and home care products, primarily marketed under the Clorox, Poett, Pine-Sol, Clorinda, and Chux brands; bags and wraps under the Glad brand; cat litter, primarily marketed under the Ever Clean and Fresh Step brands and water-filtration products marketed under the Brita brand.
17
RECENT EVENTS AFFECTING THE COMPANY
For the fiscal quarter ended September 30, 2026, the Company continues to monitor macroeconomic conditions as a result of volatility in capital markets and developments in international trade policy. These evolving challenges contributed to a highly dynamic operating environment as the Company continued its efforts to drive growth, rebuild margins and drive its transformation.
Consumers continue to feel pressure as continued macroeconomic uncertainty impacts spending and prices remain elevated. United States trade policies continue to evolve, including new or increased tariffs on product imports from certain countries. These, and any future new or additional tariffs, as well as any associated retaliatory measures taken by other countries, have impacted and may continue to impact the macroeconomic environment, consumers, suppliers and the Company’s business. Though the Company has taken and will continue to take action to mitigate such impacts, the Company anticipates the operating environment will remain volatile and challenging.
Global macroeconomic conditions remain volatile and geopolitical instability persists. This includes active military hostilities in the Middle East, specifically the ongoing conflict involving Iran, rising tensions in other regions, as well as actual and potential shifts in U.S. and foreign trade, economic and other policies, including the imposition of sanctions. These developments have increased uncertainty regarding the duration and potential escalation of conflicts, as well as the risk of economic disruptions that could impact global trade and supply chains. Given the dynamic nature of these conditions, the Company expects continued variability in the operating environment.
The Company has not experienced significant disruptions to its regional operations and global supply chain or significant cost increases during fiscal year 2027 to date due to the ongoing conflict in Iran. However, the risks of future negative impacts from regional conflicts due to transportation, logistical or supply constraints and higher commodity costs for certain raw materials remain present.
For fiscal year 2027, the Company anticipates the operating environment will remain volatile and challenging as consumers may face greater pressure as continued macroeconomic uncertainty impacts spending. The Company will continue to invest in its brands, capabilities and people to deliver consistent, profitable growth over time. The recent GOJO acquisition reflects the Company’s commitment to reduce volatility, accelerate sales growth and structurally improve margins.
For further discussion, refer to Part II, Item 1.A, “Risk Factors” of this Report and “Risk Factors” included in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2026.
18
RESULTS OF OPERATIONS
CONSOLIDATED RESULTS
| Three months ended | |||||||||||||||||||||||||||||||||||
| 9/30/2026 | 9/30/2025 | % Change | |||||||||||||||||||||||||||||||||
| Net sales | $ | 1,905 | $ | 1,429 | 33 | % | |||||||||||||||||||||||||||||
| Three months ended September 30, 2026 | ||||||||||||||||||||||||||
| Percentage change versus the year-ago period | ||||||||||||||||||||||||||
| Reported (GAAP) Net Sales Growth / (Decrease) | Reported Volume | Acquisitions & Divestitures | Foreign Exchange Impact | Price/Mix/ Other (1) | Organic Sales Growth / (Decrease) (Non-GAAP)(2) | Organic Volume (3) | ||||||||||||||||||||
| Health and Wellness | 62 | % | 55 | % | 39 | % | — | % | 7 | % | 23 | % | 22 | % | ||||||||||||
| Household | 17 | 17 | — | — | — | 17 | 17 | |||||||||||||||||||
| Lifestyle | 16 | 15 | — | — | 1 | 16 | 15 | |||||||||||||||||||
| International | 11 | 9 | — | 2 | — | 9 | 9 | |||||||||||||||||||
Total Company (4) | 33 | % | 31 | % | 15 | % | — | % | 2 | % | 18 | % | 17 | % | ||||||||||||
(1)This represents the net impact on net sales growth / (decrease) from pricing actions, mix, trade promotion spending, mix from acquisitions and divestitures and other factors. In the three months ended September 30, 2026, the impact from acquisition mix was 6% and 1% for Health and Wellness and Total Company, respectively.
(2)Organic sales growth / (decrease) is defined as net sales growth / (decrease) excluding the effect of any acquisitions and divestitures and foreign exchange rate changes. See “Non-GAAP Financial Measures” below for reconciliation of organic sales growth / (decrease) to net sales growth / (decrease), the most directly comparable GAAP financial measure.
(3)Organic volume represents volume excluding the effect of any acquisitions and divestitures. In the three months ended September 30, 2026, the volume impact of acquisition was 33% and 14% for Health and Wellness and Total Company, respectively.
(4)Total Company includes Corporate and Other.
Net sales and volume in the current period increased by 33% and 31%, respectively, primarily due to lapping the impact of lower shipments in the prior period following the incremental shipments related to the ERP transition in the fourth quarter of fiscal year 2025 and the benefit of the GOJO acquisition.
| Three months ended | |||||||||||||||||||||||||||||||||||
| 9/30/2026 | 9/30/2025 | % Change | |||||||||||||||||||||||||||||||||
| Gross profit | $ | 770 | $ | 596 | 29 | % | |||||||||||||||||||||||||||||
| Gross margin | 40.4 | % | 41.7 | % | |||||||||||||||||||||||||||||||
Gross margin decreased by 130 basis points in the current period from 41.7% to 40.4%. The decrease was primarily driven by higher commodity costs and higher manufacturing and logistics costs, partially offset by higher volume and cost savings.
Expenses
| Three months ended | |||||||||||||||||||||||||||||
| % of Net Sales | |||||||||||||||||||||||||||||
| 9/30/2026 | 9/30/2025 | % Change | 9/30/2026 | 9/30/2025 | |||||||||||||||||||||||||
| Selling and administrative expenses | $ | 290 | $ | 277 | 5 | % | 15.2 | % | 19.4 | % | |||||||||||||||||||
| Advertising costs | 190 | 166 | 14 | 10.0 | 11.6 | ||||||||||||||||||||||||
| Research and development costs | 29 | 28 | 4 | 1.5 | 2.0 | ||||||||||||||||||||||||
19
RESULTS OF OPERATIONS (Continued)
Selling and administrative expenses, as a percentage of net sales, decreased by 420 basis points in the current period versus the prior period, while dollars increased. The decrease in selling and administrative expenses as a percentage of net sales was primarily due to higher net sales in the current period.
Advertising costs, as a percentage of net sales, decreased by 160 basis points in the current period versus the prior period, while dollars increased. The decrease in advertising costs as a percentage of net sales was primarily due to higher net sales in the current period. The Company continues to support its brands. The Company’s U.S. retail advertising investments as a percentage of net sales decreased from 13% to 12% versus the prior three month period.
Research and development costs, as a percentage of net sales, decreased by 50 basis points in the current period versus the prior period, while dollars were essentially flat. The Company continues to invest in product innovation and cost savings.
Interest expense, other (income) expense, net and the effective tax rate on earnings
| Three months ended | |||||||||||||||||||||||
| 9/30/2026 | 9/30/2025 | ||||||||||||||||||||||
| Interest expense | 52 | 23 | |||||||||||||||||||||
| Other (income) expense, net | 2 | (5) | |||||||||||||||||||||
Effective tax rate on earnings | 16.4 | % | 23.4 | % | |||||||||||||||||||
Interest expense increased by $29 in the current period as compared to prior period. The increase was primarily due to incremental borrowings to fund the GOJO acquisition.
Other (income) expense, net was $2 and ($5) in the current and prior period, respectively. The variance was primarily due to lapping gains on the Company’s trust assets related to its nonqualified deferred compensation plans.
The effective tax rate on earnings was 16.4% and 23.4% for the current and prior periods, respectively. The lower tax rate in the current period as compared to the prior period was primarily driven by an international legal entity reorganization.
Diluted net earnings per share
| Three months ended | |||||||||||||||||||||||||||||||||||
| 9/30/2026 | 9/30/2025 | % Change | |||||||||||||||||||||||||||||||||
Diluted net earnings per share | $ | 1.39 | $ | 0.65 | 114 | % | |||||||||||||||||||||||||||||
Diluted net earnings per share (EPS) increased by $0.74, or 114%, in the current period, primarily due to higher net sales and cost savings, partially offset by higher commodity costs and higher manufacturing and logistics costs.
20
SEGMENT RESULTS
The following presents the results of the Company’s reportable segments and Corporate and Other. See notes to condensed consolidated financial statements for further discussion of the principal measure of segment profitability used by management, segment adjusted earnings (losses) before interest and income taxes (segment adjusted EBIT):
| Net sales | |||||||||||||||||||||||
| Three months ended | |||||||||||||||||||||||
| 9/30/2026 | 9/30/2025 | ||||||||||||||||||||||
| Health and Wellness | $ | 918 | $ | 565 | |||||||||||||||||||
| Household | 423 | 362 | |||||||||||||||||||||
| Lifestyle | 283 | 245 | |||||||||||||||||||||
| International | 281 | 253 | |||||||||||||||||||||
Reportable segment total | 1,905 | 1,425 | |||||||||||||||||||||
| Corporate and Other | — | 4 | |||||||||||||||||||||
| Total | $ | 1,905 | $ | 1,429 | |||||||||||||||||||
Segment adjusted EBIT (1) | |||||||||||||||||||||||
| Three months ended | |||||||||||||||||||||||
| 9/30/2026 | 9/30/2025 | ||||||||||||||||||||||
| Health and Wellness | $ | 209 | $ | 124 | |||||||||||||||||||
| Household | 30 | 27 | |||||||||||||||||||||
| Lifestyle | 60 | 38 | |||||||||||||||||||||
| International | 31 | 19 | |||||||||||||||||||||
Reportable segment total | 330 | 208 | |||||||||||||||||||||
| Corporate and Other | (46) | (48) | |||||||||||||||||||||
| Total | $ | 284 | $ | 160 | |||||||||||||||||||
| Interest income | 1 | 2 | |||||||||||||||||||||
| Interest expense | (52) | (23) | |||||||||||||||||||||
Acquisition and integration costs | (26) | — | |||||||||||||||||||||
| Digital capabilities and productivity enhancements investment | — | (32) | |||||||||||||||||||||
Earnings before income taxes | $ | 207 | $ | 107 | |||||||||||||||||||
(1)See “Non-GAAP Financial Measures” below for reconciliation of segment adjusted EBIT to earnings before income taxes, the most directly comparable GAAP financial measure.
Health and Wellness
| Three months ended | |||||||||||||||||||||||||||||||||||
| 9/30/2026 | 9/30/2025 | % Change | |||||||||||||||||||||||||||||||||
| Net sales | $ | 918 | $ | 565 | 62 | % | |||||||||||||||||||||||||||||
| Segment adjusted EBIT | 209 | 124 | 69 | ||||||||||||||||||||||||||||||||
Volume, net sales and segment adjusted EBIT increased by 55%, 62% and 69%, respectively, during the current period. The volume increase was primarily due to the benefit of the GOJO acquisition and lapping the impact of lower shipments in the prior period following the incremental shipments related to the ERP transition in the fourth quarter of fiscal year 2025. The variance between volume and net sales was primarily due to favorable price mix. The increase in segment adjusted EBIT was primarily due to higher net sales and cost savings, partially offset by higher manufacturing and logistics costs and higher commodity costs.
21
SEGMENT RESULTS (Continued)
Household
| Three months ended | |||||||||||||||||||||||||||||||||||
| 9/30/2026 | 9/30/2025 | % Change | |||||||||||||||||||||||||||||||||
| Net sales | $ | 423 | $ | 362 | 17 | % | |||||||||||||||||||||||||||||
| Segment adjusted EBIT | 30 | 27 | 11 | ||||||||||||||||||||||||||||||||
Both volume and net sales increased by 17% and segment adjusted EBIT increased by 11% during the current period. The volume increase was primarily due to lapping the impact of lower shipments in the prior period following the incremental shipments related to the ERP transition in the fourth quarter of fiscal year 2025. The increase in segment adjusted EBIT was mainly due to higher net sales, partially offset by higher commodity costs and higher manufacturing and logistics costs.
Lifestyle
| Three months ended | |||||||||||||||||||||||||||||||||||
| 9/30/2026 | 9/30/2025 | % Change | |||||||||||||||||||||||||||||||||
| Net sales | $ | 283 | $ | 245 | 16 | % | |||||||||||||||||||||||||||||
| Segment adjusted EBIT | 60 | 38 | 58 | ||||||||||||||||||||||||||||||||
Volume, net sales and segment adjusted EBIT increased by 15%, 16% and 58%, respectively, during the current period. The volume increase was primarily due to lapping the impact of lower shipments in the prior period following the incremental shipments related to the ERP transition in the fourth quarter of fiscal year 2025. The increase in segment adjusted EBIT was primarily due to higher net sales, partially offset by higher commodity costs.
International
| Three months ended | |||||||||||||||||||||||||||||||||||
| 9/30/2026 | 9/30/2025 | % Change | |||||||||||||||||||||||||||||||||
| Net sales | $ | 281 | $ | 253 | 11 | % | |||||||||||||||||||||||||||||
| Segment adjusted EBIT | 31 | 19 | 63 | ||||||||||||||||||||||||||||||||
Volume, net sales and segment adjusted EBIT increased by 9%, 11% and 63%, respectively, during the current period. The volume increase was primarily driven by strong shipments across several regions, particularly in Latin America. The variance between volume and net sales was mainly due to favorable foreign exchange rates. The increase in segment adjusted EBIT was primarily due to higher net sales and cost savings, partially offset by higher commodity costs.
Corporate and Other
Corporate and Other includes certain non-allocated administrative and other costs, various other non-operating income and expenses.
| Three months ended | |||||||||||||||||||||||||||||||||||
| 9/30/2026 | 9/30/2025 | % Change | |||||||||||||||||||||||||||||||||
Net Sales | $ | — | $ | 4 | (100) | % | |||||||||||||||||||||||||||||
| Segment adjusted EBIT | (46) | (48) | 4 | ||||||||||||||||||||||||||||||||
Net sales and segment adjusted EBIT were essentially flat in the current period versus the prior period.
22
FINANCIAL POSITION AND LIQUIDITY
The Company’s financial condition and liquidity remained strong as of September 30, 2026. The following table summarizes cash activities:
| Three months ended | |||||||||||
| 9/30/2026 | 9/30/2025 | ||||||||||
| Net cash provided by operations | $ | 143 | $ | 93 | |||||||
Net cash used for investing activities | (35) | (34) | |||||||||
| Net cash used for financing activities | (68) | (59) | |||||||||
Operating Activities
Net cash provided by operations was $143 in the current three month period, compared with $93 in the prior three month period. The increase was primarily driven by higher cash earnings partially offset by an increase in working capital.
The increase in working capital was primarily driven by Accounts receivable due to the lower shipments in the prior three month period, partially offset by inventory due to pre-build in the prior three month period, both as a result of the ERP transition in the fourth quarter of fiscal year 2025. Accounts payable and accrued liabilities also contributed to the increase due to the timing of payments.
Payment Terms Extension and Supply Chain Financing
The Company has arranged for a global financial institution to offer a voluntary supply chain finance (SCF) program for the benefit of the Company’s suppliers. The Company’s current payment terms do not exceed 120 days in keeping with industry standards. The Company’s operating cash flows are directly impacted as a result of the extension of payment terms with suppliers. There would not be an expected material impact to the Company’s liquidity or capital resources if the financial institution or a supplier terminated the SCF arrangement. While the Company does not have direct access to information on, or influence over, which invoices a participating supplier elects to sell to the financial institution, the Company expects that the majority of these amounts have been sold to the financial institution. Refer to the notes to condensed consolidated financial statements for detail on the SCF program.
Investing Activities
Net cash used for investing activities was $35 in the current three month period, compared with $34 in the prior three month period.
Financing Activities
Net cash used for financing activities was $68 in the current three month period, compared with $59 in the prior three month period.
Capital Resources and Liquidity
As of September 30, 2026, the Company has issued approximately $1,175 of Notes and loans payable primarily comprised of U.S. commercial paper borrowings to finance the previously announced GOJO acquisition and fund the Venture Agreement termination payment. As of September 30, 2026, current liabilities exceeded current assets by $1,023, primarily due to these commercial paper borrowings.
Notwithstanding potential unforeseen adverse market conditions and as part of the Company’s regular assessment of its cash needs, the Company believes it will have the funds necessary to support its short- and long-term liquidity and operating needs, including its ability to invest in its brands, capabilities and people to deliver consistent profitable growth over time based on its anticipated ability to generate positive cash flows from operations in the future, access to capital markets enabled by our strong short-term and long-term credit ratings and current borrowing availability.
Credit Arrangements
As of September 30, 2026, the Company maintained $1,964 in revolving credit agreements comprised of a $764 364-day revolving credit agreement that matures in March 2027 (the 364-Day Revolving Credit Agreement) and a $1,200 revolving credit agreement that matures in March 2030 (collectively the Revolving Credit Agreements).
There were no borrowings under the Revolving Credit Agreements as of both September 30, 2026 and June 30, 2026, and the Company believes that borrowings under the Revolving Credit Agreements will continue to be available for the purposes stated
23
FINANCIAL POSITION AND LIQUIDITY (Continued)
in each agreement. The Revolving Credit Agreements include certain restrictive covenants and limitations. The primary restrictive covenant is a minimum ratio of 4.0, calculated as total earnings before interest, taxes, depreciation and amortization and other similar noncash charges and certain other items (Consolidated EBITDA) to total interest expense for the trailing four quarters (Interest Coverage ratio), as defined and described in each agreement.
The Company was in compliance with all restrictive covenants and limitations in the Revolving Credit Agreements as of September 30, 2026 and anticipates being in compliance with all restrictive covenants for the foreseeable future.
As of September 30, 2026, the Company maintained $39 of foreign and other credit lines, of which $10 was outstanding.
Stock Repurchases and Dividend Payments
As of September 30, 2026, the Company had two stock repurchase programs: an open-market purchase program with an authorized aggregate purchase amount of up to $2,000, which has no expiration date, and a program to offset the anticipated impact of dilution related to stock-based awards (the Evergreen Program), which has no authorization limit on the dollar amount and no expiration date. During the three months ended September 30, 2026 and 2025, the Company repurchased 0 and 1,048 thousand shares of common stock at a cost of $0 and $129, respectively. These costs exclude the impact of excise taxes.
Dividends per share declared and total dividends paid to Clorox stockholders were as follows for the periods indicated:
| Three months ended | |||||||||||||||||||||||
| 9/30/2026 | 9/30/2025 | ||||||||||||||||||||||
| Dividends per share declared | $ | 2.50 | $ | 2.48 | |||||||||||||||||||
| Total dividends paid | 151 | 151 | |||||||||||||||||||||
CONTINGENCIES
See notes to condensed consolidated financial statements for information on the Company’s contingencies.
RECENTLY ISSUED ACCOUNTING STANDARDS
See notes to condensed consolidated financial statements for a summary of recently issued accounting standards relevant to the Company.
CRITICAL ACCOUNTING ESTIMATES
The methods, estimates and judgments the Company uses in applying its most critical accounting policies have a significant impact on the results the Company reports in its condensed consolidated financial statements. Accordingly, a different financial presentation could result depending on the judgments, estimates or assumptions that are used. The most critical accounting estimates are those that are most important to the portrayal of the Company’s financial condition and results, and require the Company to make the most difficult and subjective judgments, often estimating the outcome of future events that are inherently uncertain. As of September 30, 2026, there have been no significant changes to the Company’s critical accounting estimates since the preparation of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2026, except as noted below:
Trademarks and Other Indefinite-Lived Intangible Assets
The Company tests its goodwill and other indefinite-lived intangible assets for impairment annually in the fiscal fourth quarter unless there are indications during a different interim period that these assets may have become impaired. The results of the fiscal year 2026 annual impairment review indicated that the Burt’s Bees indefinite-lived trademark had 20% or less excess fair value over its carrying value. As of September 30, 2026, the trademark had a carrying value of $322. No triggering events were identified in the fiscal quarter ended September 30, 2026 that would more likely than not reduce the fair value of the trademark below its carrying value. The Company continues to closely monitor any events, circumstances or changes in this business that might imply a reduction in the estimated fair value and may lead to impairment.
24
NON-GAAP FINANCIAL MEASURES
The non-GAAP financial measures that are included in this MD&A and the reasons management believes they are useful to investors are described below. Certain non-GAAP financial measures may be considered in determining incentive compensation. These measures should be considered supplemental in nature and are not intended to be a substitute for the related financial information prepared in accordance with U.S. GAAP. In addition, these measures may not be the same as similarly named measures presented by other companies.
Adjusted earnings (losses) before interest and income taxes (adjusted EBIT) represents earnings (losses) before income taxes excluding interest income, interest expense and other significant items that are nonrecurring or unusual (such as asset impairments, charges related to the digital capabilities and productivity enhancements investment, transaction and integration costs related to acquisitions, significant losses related to divestitures and other nonrecurring or unusual items impacting comparability). Due to the nature, scope and magnitude of these costs, the Company’s management believes presenting these costs as an adjustment in the non-GAAP results provides additional information to investors about trends in the Company’s operations. See below and notes to condensed consolidated financial statements for additional information on these costs.
The Company uses this measure to assess the operating results and performance of its segments, monitor actual results as compared to plan, perform analytical comparisons, identify strategies to improve performance, and allocate resources to each segment. Management believes that the presentation of adjusted EBIT is useful to investors to assess operating performance on a consistent basis by removing the impact of the items that management believes do not directly reflect the performance of each segment's underlying operations and is useful for period-over-period comparisons. It also allows investors to view underlying operating results in the same manner as they are viewed by Company management.
Reconciliation of earnings before income taxes to adjusted EBIT | |||||||||||||||||||||||
| Three months ended | |||||||||||||||||||||||
| 9/30/2026 | 9/30/2025 | ||||||||||||||||||||||
Earnings before income taxes | $ | 207 | $ | 107 | |||||||||||||||||||
| Interest income | (1) | (2) | |||||||||||||||||||||
| Interest expense | 52 | 23 | |||||||||||||||||||||
Acquisition and integration costs (1) | 26 | — | |||||||||||||||||||||
Digital capabilities and productivity enhancements investment (2) | — | 32 | |||||||||||||||||||||
| Adjusted EBIT | $ | 284 | $ | 160 | |||||||||||||||||||
(1)Represents expenses related to the Company’s acquisition and integration of GOJO.
As a result of this transaction, various acquisition and integration-related costs related to the acquisition and efforts to integrate the recently acquired business to the Company’s systems and processes were and will be incurred. These costs include inventory step-up charges representing expense recognition of fair value adjustments in excess of the historical cost basis of inventory obtained through the acquisition, as well as direct acquisition transaction costs and legal-entity, operational, manufacturing, and information technology integration costs.
Due to the nature, scope and magnitude of these costs, the Company's management believes presenting these costs as an adjustment in the non-GAAP results provides additional information to investors about trends in the Company's operations and is useful for period over period comparisons. It also allows investors to view underlying operating results in the same manner as they are viewed by Company management.
(2)Represents expenses related to the Company's digital capabilities and productivity enhancements investment.
Due to the nature, scope and magnitude of this investment, these costs are considered by management to represent incremental transformational costs above the historical normal level of spending for information technology to support operations. Since these strategic investments, including incremental operating costs, ceased at the end of the investment period, are not expected to recur in the foreseeable future and are not considered representative of the Company's underlying operating performance, the Company's management believes presenting these costs as an adjustment in the non-GAAP results provides additional information to investors about trends in the Company's operations and is useful for period-over-period comparisons. It also allows investors to view underlying operating results in the same manner as they are viewed by Company management.
Organic sales growth / (decrease) is defined as net sales growth / (decrease) excluding the effect of foreign exchange rate changes and any acquisitions and divestitures. Management believes that the presentation of organic sales growth / (decrease) is useful to investors because it excludes sales from any acquisitions and divestitures, which results in a comparison of sales only from the businesses that the Company was operating and expects to continue to operate throughout the relevant periods, and the Company’s estimate of the impact of foreign exchange rate changes, which are difficult to predict and out of the control of the Company and management.
25
NON-GAAP FINANCIAL MEASURES (Continued)
The following table provides a reconciliation of organic sales growth / (decrease) (non-GAAP) to net sales growth / (decrease) (GAAP), the most directly comparable GAAP measure:
| Three months ended September 30, 2026 | |||||||||||||||||||||||||||||
| Percentage change versus the year-ago period | |||||||||||||||||||||||||||||
| Health and Wellness | Household | Lifestyle | International | Total Company (1) | |||||||||||||||||||||||||
| Net sales growth / (decrease) (GAAP) | 62 | % | 17 | % | 16 | % | 11 | % | 33 | % | |||||||||||||||||||
| Add: Foreign Exchange | — | — | — | (2) | — | ||||||||||||||||||||||||
Add/(Subtract): Divestitures / Acquisitions (2) | (39) | — | — | — | (15) | ||||||||||||||||||||||||
| Organic sales growth / (decrease) (non-GAAP) | 23 | % | 17 | % | 16 | % | 9 | % | 18 | % | |||||||||||||||||||
(1)Total Company includes Corporate and Other.
(2)Reflects the impact of the GOJO acquisition.
CAUTIONARY STATEMENT
This Report, including the exhibits hereto and the information incorporated by reference herein, contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including, among others, regarding the acquisition and integration of GOJO (now operating as Clorox Purell ProCare), and any such forward-looking statements involve risks, assumptions and uncertainties. Except for historical information, statements about future volumes, sales, organic sales growth, foreign currencies, costs, cost savings, margins, earnings, earnings per share, including as a result of the Company’s strategic transactions, diluted earnings per share, foreign currency exchange rates, tax rates, cash flows, plans, objectives, expectations, growth or profitability are forward-looking statements based on management’s estimates, beliefs, assumptions and projections. Words such as “could,” “may,” “expects,” “anticipates,” “targets,” “goals,” “projects,” “intends,” “plans,” “believes,” “seeks,” “estimates,” “will,” “predicts,” and variations on such words, and similar expressions that reflect the Company’s current views with respect to future events and operational, economic and financial performance are intended to identify such forward-looking statements. These forward-looking statements are only predictions, subject to risks and uncertainties, and actual results could differ materially from those discussed. Important factors that could affect performance and cause results to differ materially from management’s expectations, are described in the sections entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2026, and in this Report, as updated from time to time in the Company’s Securities and Exchange Commission filings. These factors include, but are not limited to:
•the risks arising from the integration of the Clorox Purell ProCare business, including the ability to successfully integrate Clorox Purell ProCare’s operations, systems, controls, culture, customers, suppliers and personnel, and to realize the anticipated benefits and synergies of the acquisition, including cost savings and growth opportunities, when expected or at all; the risks of adapting to Clorox Purell ProCare’s business-to-business (B2B) operating model, including differences in distribution channels, go-to-market strategies, margin profiles and customer requirements, increased exposure to customer concentration and consolidation among distributors, group purchasing organizations, health systems and other institutional customers in B2B channels, and potential channel conflict with the Company’s consumer business; the risk of increased regulatory exposure resulting from Clorox Purell ProCare’s portfolio of products subject to U.S. Food and Drug Administration oversight, including products regulated as cosmetics and over-the-counter drugs; the risk of unexpected costs, expenses or litigation resulting from the GOJO acquisition; the risk of impairment charges related to intangible assets acquired in connection with the GOJO acquisition; the risks related to disruption of the Company’s ongoing business operations and diversion of management time and resources from the Company’s strategic transactions; the risk that the GOJO acquisition may have an adverse effect on the Company’s ability to retain key personnel, customers and suppliers;
•unfavorable general economic and geopolitical conditions beyond the Company’s control, including inflation, supply chain disruptions, labor shortages, wage pressures, fuel and energy costs, interest rate fluctuations, foreign currency exchange rate fluctuations, weather events or natural disasters, disease outbreaks or pandemics, terrorism, and unstable geopolitical conditions, including active armed conflicts and military hostilities in the Middle East, such as the ongoing conflict involving Iran, and rising tensions in various parts of the world, as well as macroeconomic and geopolitical volatility and uncertainty resulting from a number of these and other factors, such as actual and potential shifts in U.S. and foreign trade policies and agreements, escalating trade tensions between the U.S. and its trading
26
CAUTIONARY STATEMENT (Continued)
partners, especially China, the potential expansion of sanctions regimes, and disruptions to global markets or transportation routes, particularly due to the imposition of U.S. and retaliatory tariffs;
•the impact of market and category declines, and the Company’s product and geographic mix on its ability to meet sales growth targets;
•risks relating to acquisitions, joint ventures, new venture investments and divestitures, and associated costs, including asset impairment charges related to, among others, intangible assets, trademarks and goodwill, integration costs and potential contingent liabilities related to those transactions;
•the Company’s ability to successfully execute or realize the anticipated benefits of its strategic or transformational initiatives, including its completed ERP implementation and post-implementation stabilization as well as the shift towards a simplified operating structure;
•the impact of the changing retail environment, including the growth of alternative retail channels and business models, the increasing use of artificial intelligence by discovery and retailer platforms, and changing consumer preferences;
•intense competition in the Company’s markets;
•volatility and increases in the costs of raw materials, energy, transportation, labor and other necessary supplies or services;
•risks related to supply chain issues, product shortages and disruptions to the business, as a result of increased supply chain dependencies due to an expanded supplier network and a reliance on certain single-source suppliers;
•risks related to the Company’s use of and reliance on information technology systems, including potential and actual security breaches, cyberattacks, privacy breaches or data breaches, including as a result of the increasing use of artificial intelligence by threat actors, that result in the unauthorized disclosure of consumer, customer, employee or Company information, business, service or operational disruptions, or that impact the Company's financial results or financial reporting, or any resulting unfavorable outcomes, increased costs or legal proceedings;
•the ability of the Company to innovate, including to deliver product superiority across performance, value, packaging and brand experience, and to develop and introduce commercially successful products, or expand into adjacent categories and countries;
•the ability of the Company to successfully manage global political, legal, tax and regulatory risks, including due to regulatory uncertainty and lack of regulatory convergence among different jurisdictions;
•lower revenue, increased costs, other financial statement impacts or reputational harm resulting from government actions, compliance with regulations, or any material costs imposed by changes in regulation;
•the Company’s ability to maintain its business reputation and the reputation of its brands and products;
•dependence on key customers and risks related to customer consolidation and ordering patterns;
•the Company’s ability to attract and retain key personnel, which may continue to be impacted by challenges in the labor market, such as increasing labor costs and sustained labor shortages, as well as the Company's ability to manage leadership transitions, including the previously announced CEO succession, and retain and integrate key employees of acquired businesses;
•changes to the Company's processes and procedures as a result of its digital capabilities and productivity enhancements, its increasing use of emerging technologies such as artificial intelligence, and the integration of acquired businesses (including Clorox Purell ProCare) that may result in changes to the Company's internal controls over financial reporting;
•risks related to the Company’s continued operation of the Glad business;
•risks related to international operations and international trade, including changing macroeconomic conditions as a result of inflation, volatile commodity prices and increases in raw and packaging materials prices, labor, energy and logistics; global economic or political instability; foreign currency fluctuations, such as devaluations, and foreign currency exchange rate controls; changes in governmental policies, including trade policy and tariffs, travel or immigration restrictions, new or additional tariffs, and price or other controls; labor claims and civil unrest; potential operational or supply chain disruptions from wars and military conflicts, including active armed conflicts and military hostilities in the Middle East, such as the ongoing conflict involving Iran, and/or Ukraine and rising tensions in various
27
CAUTIONARY STATEMENT (Continued)
parts of the world, such as between China and Taiwan; potential negative impact and liabilities from the use, storage and transportation of chlorine in certain international markets where chlorine is used in the production of bleach; widespread health emergencies; and the possibility of nationalization, expropriation of assets or other government action or inaction, including the impacts of any prolonged U.S. government shutdown;
•risk of reductions in the estimated fair value of the Burt’s Bees trademark and potential impairment charges;
•the impact of climate change and other sustainability issues on sales, operating costs, reputation or stakeholder relationships;
•the impact of product liability claims, labor claims and other legal, governmental or tax proceedings, including in foreign jurisdictions and in connection with any product recalls;
•the accuracy of the Company’s estimates and assumptions on which its financial projections, including any sales or earnings guidance or outlook it may provide from time to time, are based;
•risks related to the Company's reliance on third-party service providers, including inability to meet cost savings or efficiencies, business or systems disruptions, and other liabilities, including legal or regulatory risk;
•environmental matters, including costs associated with the remediation and monitoring of past contamination, and possible increases in costs resulting from actions by relevant regulators, and the handling and/or transportation of hazardous substances;
•the Company’s ability to effectively utilize, assert and defend its intellectual property rights, and any infringement or claimed infringement by the Company of third-party intellectual property rights;
•the effect of the Company’s indebtedness and credit ratings, including increased indebtedness resulting from the GOJO acquisition and Glad joint venture buyout and the downgrade of the Company's long-term credit rating by S&P Global Ratings, on its business operations and financial results and the Company’s ability to access capital markets and other funding sources, as well as the cost of capital to the Company;
•the Company’s ability to pay and declare dividends or repurchase its stock in the future; and
•the impacts of potential stockholder activism.
The Company’s forward-looking statements in this Report are based on management’s current views, beliefs, assumptions and expectations regarding future events and speak only as of the date of this Report. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the federal securities laws.
In this Report, unless the context requires otherwise, the terms “the Company,” “Clorox,” “we,” “us,” and “our” refer to The Clorox Company and its subsidiaries.
28
Item 3. Quantitative and Qualitative Disclosures About Market Risk
There have not been any material changes to the Company’s market risk since June 30, 2026. For additional information, refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included in Exhibit 99.1 of the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2026.
Item 4. Controls and Procedures
The Company’s management, with the participation of the Company’s Chief Executive Officer and Executive Vice President – Chief Financial Officer, evaluated the effectiveness of the Company’s disclosure controls and procedures as of the end of the period covered by this Report. Based on that evaluation, the Chief Executive Officer and Executive Vice President – Chief Financial Officer concluded that the Company’s disclosure controls and procedures, as of the end of the period covered by this Report, were effective such that the information required to be disclosed by the Company in reports filed under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to management, including the Chief Executive Officer and Executive Vice President – Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.
No change in the Company’s internal control over financial reporting occurred during the first fiscal quarter of the fiscal year ending June 30, 2027, that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
29
PART II – OTHER INFORMATION
Item 1.A. Risk Factors
For information regarding Risk Factors, please refer to Item 1.A. in the Company’s Annual Report on Form 10-K for the fiscal year ended June 30, 2026, and the information in “Cautionary Statement” included in this Report.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
In May 2018, the Board of Directors authorized the Company to repurchase up to $2,000 million in shares of common stock on the open market (the 2018 Open-Market Program), which has no expiration date.
In August 1999, the Board of Directors authorized a stock repurchase program to reduce or eliminate dilution upon the issuance of common stock pursuant to the Company’s stock compensation plans (the Evergreen Program). In November 2005, the Board of Directors authorized the extension of the Evergreen Program to reduce or eliminate dilution in connection with issuances of common stock pursuant to the Company’s 2005 Stock Incentive Plan. The Evergreen Program has no expiration date and has no specified limit as to dollar amount and therefore is not included in column [d] below.
The following table sets forth the purchases of the Company’s securities by the Company and any affiliated purchasers within the meaning of Rule 10b-18(a)(3) (17 CFR 240.10b-18(a)(3)) during the first quarter of fiscal year 2027.
| [a] | [b] | [c] | [d] | ||||||||||||||||||||
| Period | Total Number of Shares Purchased | Average Price Paid per Share (1) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | Maximum Number (or Approximate Dollar Value) of Shares that May Yet Be Purchased Under the Plans or Programs | |||||||||||||||||||
| July 1 to 31, 2026 | — | $ | — | — | $876 million | ||||||||||||||||||
| August 1 to 31, 2026 | — | — | — | $876 million | |||||||||||||||||||
| September 1 to 30, 2026 | — | — | — | $876 million | |||||||||||||||||||
| Total | — | — | — | ||||||||||||||||||||
(1) Average price paid per share in the period includes commission and excludes the impact of excise taxes.
Item 5. Other Information
During the three months ended September 30, 2026, none
30
Item 6. Exhibits
See Exhibit Index below, which is incorporated by reference herein.
EXHIBIT INDEX
| Exhibit Number | Exhibit Description | |||||||
| 10.1 | ||||||||
| 10.2 | ||||||||
| 31.1 | ||||||||
| 31.2 | ||||||||
| 32 | ||||||||
| 101.SCH | XBRL Taxonomy Extension Schema Document. | |||||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document. | |||||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document and included in Exhibit 101). | |||||||
31
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| THE CLOROX COMPANY | ||||||||
| (Registrant) | ||||||||
| DATE: November 2, 2026 | BY | /s/ Laura Peck | ||||||
| Laura Peck Vice President – Chief Accounting Officer and Corporate Controller | ||||||||
32
THE CLOROX COMPANY
2005 STOCK INCENTIVE PLAN
RESTRICTED STOCK UNIT AWARD TERMS AND CONDITIONS
NOTICE OF RESTRICTED STOCK UNIT AWARD
The Clorox Company, a Delaware company (the “Company”), grants to you (“the Grantee”), in accordance with the terms of The Clorox Company 2005 Stock Incentive Plan (the “Plan”) and these Restricted Stock Unit Award Terms and Conditions (the “RSU Terms and Conditions”), the number of Restricted Stock Units (the “Units”) set forth on Exhibit A to these RSU Terms and Conditions on the terms set forth below.
RESTRICTED STOCK UNIT AWARD TERMS AND CONDITIONS
1. Grant of Units. The Company hereby grants to the Grantee the Restricted Stock Units set forth in Exhibit A, subject to the terms, definitions and provisions of the Plan and these RSU Terms and Conditions including any additional or different terms and conditions for the Grantee's country set forth in Exhibit B to these RSU Terms and Conditions. All terms, provisions, and conditions applicable to the Restricted Stock Units set forth in the Plan and not set forth herein are incorporated by reference. To the extent any provision hereof is inconsistent with a provision of the Plan, the provisions of the Plan will govern. All capitalized terms that are used in these RSU Terms and Conditions and not otherwise defined herein shall have the meanings ascribed to them in the Plan.
2. Nature and Settlement of Award. The Units represent an unfunded, unsecured promise by the Company to issue Shares. Units will become vested and be settled in Shares on a one Share for one Unit basis, rounded to the nearest whole Share, less any Shares withheld in accordance with the provisions of Section 4 of these RSU Terms and Conditions. Settlement shall occur as soon as practicable after the Period of Restriction lapses as provided in Exhibit A, but in any event, within the period ending on the later to occur of the date that is 2 1/2 months from the end of (1) the Grantee’s tax year that includes the date of the lapse of the Period of Restriction, or (2) the Company’s tax year that includes the date of the lapse of the Period of Restriction (which payment schedule is intended to comply with the “short-term deferral” exemption from the application of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”)) (the “Settlement Date”). Although the Restricted Stock Units shall be vested within the meaning of Section 83 of the Code since no substantial risk of forfeiture exists after the Period of Restriction lapses, the Restricted Stock Units will not be earned until the Grantee has fulfilled all of the conditions precedent set forth in these RSU Terms and Conditions, including, but not limited to, the obligations set forth in Section 9(b), 9(c), 9(d), 9(e) and Section 10, and the Grantee shall have no right to retain the Shares or the value thereof upon vesting or settlement of the Restricted Stock Units until all such conditions precedent have been satisfied.
3. Dividend Equivalents. No Dividend Equivalents shall be paid to the Grantee prior to the settlement of the award. Rather, such Dividend Equivalent payments will accrue and be notionally credited to the Grantee’s RSU account and paid out in the form of additional Shares, rounded down to the nearest whole Share, after the lapse of the Period of Restriction, within the time period described in Section 2 above.
4. Taxes. Pursuant to Section 16 of the Plan, the Committee shall have the power and the right to deduct or withhold, or require the Grantee to remit to the Company, an amount sufficient to satisfy any applicable tax withholding requirements applicable to this Award. The Committee may condition the issuance of Shares in settlement of Units upon the Grantee’s satisfaction of such withholding obligations. The Grantee may elect to satisfy all or part of such withholding requirement by tendering previously-owned Shares or by having the Company withhold Shares having a Fair Market Value equal to the minimum statutory tax withholding rate that could be imposed on the transaction (or such other rate that will not result in a negative accounting impact) or in such other manner as is acceptable to the Company. Such election shall be irrevocable, made in writing, signed by the Grantee, and shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate.
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5. Termination of Employment or Service.
a. Except as otherwise provided in this Section 5 or Section 8, if the Grantee’s employment or service with the Company and its Subsidiaries is terminated for any reason, any Units for which the Period of Restriction has not lapsed before such termination of employment or service (the “Unvested Units”) and/or any Dividend Equivalents related thereto shall be forfeited. Notwithstanding the above, if the Grantee’s termination of employment or service is due to [(i) Retirement and is more than 6 months from the grant date set forth in Exhibit A, then the restrictions on the Restricted Stock Units and all Dividend Equivalents related thereto shall continue to lapse in accordance with the Period of Restriction provided in Exhibit A, provided that the “Settlement Date” for such Units and Dividend Equivalents shall occur no later than December 31 of the calendar year in which the applicable Period of Restriction lapses or (ii)]1 death or Disability, the Restricted Stock Units shall become 100% vested and the Period of Restriction on the Restricted Stock Units shall lapse and all Dividend Equivalents related thereto shall become immediately vested and payable as of such termination date.
b. Definition of “Disability.” For purposes of these RSU Terms and Conditions, the Grantee’s employment shall be deemed to have terminated due to the Grantee’s Disability if the Grantee is entitled to long-term disability benefits under the Company’s long-term disability plan or policy, as in effect on the date of termination of the Grantee’s employment.
[Definition of “Retirement.” For purposes of these RSU Terms and Conditions, the Grantee’s employment or service shall be deemed to have terminated due to “Retirement” if the Grantee terminates employment or service as an Employee for any reason, including Disability (but other than for Cause) after (1) twenty (20) or more years of “vesting service,” which solely for purposes of these RSU Terms and Conditions, shall be calculated under Article III of The Clorox Company 401(k) Plan (the “401(k) Plan”) entitled “Service” along with any other relevant provisions of the 401(k) Plan necessary or desirable to give full effect thereto, or any successor provisions, regardless of the status of the Grantee with respect to the 401(k) Plan (“Vesting Service”), or (2) attaining age fifty-five (55) with ten (10) or more years of Vesting Service.]2
6. Authorization to Return Forfeited Units. By accepting the award of these Restricted Stock Units, the Grantee authorizes the Company or its designee to return to the Company all Units and related Dividend Equivalents and Shares subject thereto which are forfeited along with any cash or other property held with respect to or in substitution of such Units, related Dividend Equivalents and/or Shares. Any such action shall comply with all applicable provisions of these RSU Terms and Conditions or the Plan.
7. Transferability of Units. The Units are subject to the transfer restrictions set forth in Section 15 of the Plan. For avoidance of doubt, Shares issued to the Grantee in settlement of Units pursuant to Section 2 of these RSU Terms and Conditions shall not be subject to any of such transferability restrictions.
8. Change in Control. Upon the occurrence of a Change in Control (including in the event the Grantee’s employment is terminated without Cause or by the Grantee for Good Reason upon or within twenty-four (24) months following consummation of a Change in Control), the Restricted Stock Units shall be treated in accordance with Section 19 of the Plan.
For purposes of these RSU Terms and Conditions, “Good Reason” shall mean the occurrence of any of the following with respect to the Grantee:
(a) the assignment to the Grantee of any duties inconsistent in any material respect with the Grantee’s position (including offices and reporting requirements), authority, duties or responsibilities, as in effect immediately prior to the occurrence of the Change in Control or the date of the Grantee’s termination of employment, whichever is greater, or any other action by the Company which results in a material diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Grantee;
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1 Note to Draft: To be removed in Off-Cycle grants.
2 Note to Draft: To be removed in Off-Cycle grants.
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(b) any failure by the Company to substantially comply with, or any reduction by the Company in, any of the material provisions of the Grantee’s compensation plans, programs, agreements or arrangements as in effect immediately prior to the Change in Control, including, without limitation, any material reduction in base salary, cash incentive compensation target bonus opportunity, equity compensation opportunity in the aggregate, or employee benefits and perquisites in the aggregate, other than an isolated, insubstantial and inadvertent failure or reduction not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Grantee;
(c) the Company’s requiring the Grantee to be based at any office or location other than that in effect immediately prior to the Change in Control or any office or location not requiring the Grantee’s commute to increase by more than 35 miles from his or her commute immediately prior to the Change in Control;
(d) any purported termination by the Company of the Grantee’s employment other than (A) due to the death or Disability of the Grantee or (B) a termination of the Grantee’s employment by the Company for Cause; or
(e) any material failure by the Company to require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume the obligations of the Company under these RSU Terms and Conditions in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.
Any termination by the Grantee for Good Reason shall be communicated by a written notice to the Company within a period not to exceed ninety (90) days of such Grantee’s knowledge of the condition. Such written notice (1) must indicate the specific termination provision in the Good Reason definition relied upon, (2) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Grantee’s employment under the provision so indicated and (3) the Grantee's intended date of termination if the Company does not cure the issue (which date shall be not less than thirty (30) days after the giving of such notice). After receipt by the Company of such written notice, the Company shall have thirty (30) days during which it may remedy the condition and thereby cure the event or circumstance constituting “Good Reason.”
9. Protection of Trade Secrets and Limitations on Retention.
a. Definitions.
i. “Affiliated Company” means any organization controlling, controlled by or under common control with the Company.
ii. “Confidential Information” means the Company’s technical or business or personnel information not readily available to the public or generally known in the trade, including inventions, developments, trade secrets and other confidential information, knowledge, data and know-how of the Company or any Affiliated Company, whether or not they originated with the Grantee, or information which the Company or any Affiliated Company received from third parties under an obligation of confidentiality.
iii. “Conflicting Product” means any product, process, machine, or service of any person or organization, other than the Company or any Affiliated Company, in existence or under development that (1) resembles or competes with a product, process, machine, or service upon or with which the Grantee shall have worked during the two years prior to the Grantee’s termination of employment with the Company or any Affiliated Company or (2) with respect to which during that period of time the Grantee, as a result of his/her job performance and duties, shall have acquired knowledge of Confidential Information, and whose use or marketability could be enhanced by application to it of Confidential Information. For purposes of this section, it shall be conclusively presumed that the Grantee has knowledge of information to which s/he has been directly exposed through actual receipt or review of memorandum or documents containing such information or through actual attendance at meetings at which such information was discussed or disclosed.
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iv. “Conflicting Organization” means any person or organization that is engaged in or about to become engaged in research on or development, production, marketing or selling of a Conflicting Product.
b. Right to Retain Units/Shares Contingent on Protection of Confidential Information. In partial consideration for the award of these Restricted Stock Units, the Grantee agrees that at all times, both during and after the term of the Grantee’s employment with the Company or any Affiliated Company, to hold in the strictest confidence, and not to use (except for the benefit of the Company at the Company’s direction) or disclose (except for the benefit of the Company at the Company’s direction), regardless of when disclosed to the Grantee, any and all Confidential Information of the Company or any Affiliated Company. The Grantee understands that for purposes of this Section 9(b), Confidential Information further includes, but is not limited to, information pertaining to any aspect of the business of the Company or any Affiliated Company which is either information not known (or known as a result of a wrongful act of the Grantee or of others who were under confidentiality obligations as to the item or items involved) by actual or potential competitors of the Company or other third parties not under confidentiality obligations to the Company. If, prior to the expiration of the Period of Restriction or at any time within one (1) year after the Settlement Date, the Grantee discloses or uses, or threatens to disclose or use, any Confidential Information other than in the course of performing authorized services for the Company (or any Affiliated Company), the Restricted Stock Units, whether vested or not, will be immediately forfeited and cancelled, and the Grantee shall immediately return to the Company the Shares issued in settlement of the Restricted Stock Units or the pre-tax income derived from any disposition of such Shares.
c. No Interference with Customers or Suppliers. In partial consideration for the award of these Restricted Stock Units, in order to forestall the disclosure or use of Confidential Information as well as to deter the Grantee’s intentional interference with the contractual relations of the Company or any Affiliated Company, the Grantee’s intentional interference with prospective economic advantage of the Company or any Affiliated Company and to promote fair competition, the Grantee agrees by accepting the award of these Restricted Stock Units that the Grantee’s right to receive the Shares upon settlement of the Restricted Stock Units is contingent upon the Grantee refraining, during the Period of Restriction and for a period of one (1) year after the Settlement Date, for himself/herself or any third party, directly or indirectly, from using Confidential Information to (1) divert or attempt to divert from the Company (or any Affiliated Company) any business of any kind in which it is engaged, or (2) intentionally solicit its customers with which it has a contractual relationship as to Conflicting Products, or interfere with the contractual relationship with any of its suppliers or customers (collectively, “Interfere”). If, during the Period of Restriction or at any time within one (1) year after the Settlement Date, the Grantee breaches his/her obligation not to Interfere, the Grantee’s right to the Shares upon settlement of the Restricted Stock Units shall not have been earned and the Restricted Stock Units, whether vested or not, will be immediately cancelled, and the Grantee shall immediately return to the Company the Shares issued in settlement of the Restricted Stock Units or the pre-tax income derived from any disposition of such Shares. For avoidance of doubt, the term “Interfere” shall not include any advertisement of Conflicting Products through the use of media intended to reach a broad public audience (such as television, cable or radio broadcasts, generalized online marketing, or newspapers or magazines) or the broad distribution of coupons through the use of direct mail or through independent retail outlets. THE GRANTEE UNDERSTANDS AND ACKNOWLEDGES BY ACCEPTING THE AWARD OF THESE UNITS THAT THIS PARAGRAPH IS NOT INTENDED TO AND DOES NOT PROHIBIT THE CONDUCT DESCRIBED, BUT PROVIDES FOR THE CANCELLATION OF THE UNITS AND A RETURN TO THE COMPANY OF THE SHARES OR THE GROSS TAXABLE PROCEEDS OF THE SHARES IF THE GRANTEE SHOULD CHOOSE TO VIOLATE THIS “NO INTERFERENCE WITH CUSTOMERS OR SUPPLIERS” PROVISION DURING THE PERIOD OF RESTRICTION OR WITHIN ONE (1) YEAR AFTER THE SETTLEMENT DATE.
d. No Solicitation of Employees. In partial consideration for the award of these Restricted Stock Units, in order to forestall the disclosure or use of Confidential Information, as well as to deter the Grantee’s intentional interference with the contractual relations of the Company or any Affiliated Company, the Grantee’s intentional interference with prospective economic advantage of the Company or any Affiliated Company, and to promote fair competition, the Grantee agrees by accepting the award of these Restricted Stock Units that the Grantee’s right to receive the Shares upon settlement of the Restricted Stock Units is contingent upon the Grantee refraining, during the Period of Restriction and for a period of one (1) year after the Settlement Date, for himself/herself or any third party, directly or indirectly, from soliciting for employment any person employed by the Company, or by any Affiliated Company, during the period of the solicited person’s employment and for a period of one (1) year after the termination of the solicited person’s employment with the Company or any Affiliated Company (collectively “Solicit”). If, during the
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term of the Period of Restriction or at any time within one (1) year after the Settlement Date, the Grantee breaches his/her obligation not to Solicit, the Grantee’s right to the Shares upon settlement of the Restricted Stock Units shall not have been earned and the Restricted Stock Units, whether vested or not, will be immediately cancelled, and the Grantee shall immediately return to the Company the Shares issued in settlement of the Restricted Stock Units or the pre-tax income derived from any disposition of such Shares. THE GRANTEE UNDERSTANDS AND ACKNOWLEDGES BY ACCEPTING THE AWARD OF THESE UNITS THAT THIS PARAGRAPH IS NOT INTENDED TO AND DOES NOT PROHIBIT THE CONDUCT DESCRIBED, BUT PROVIDES FOR THE CANCELLATION OF THE UNITS AND A RETURN TO THE COMPANY OF THE SHARES OR THE GROSS TAXABLE PROCEEDS OF THE SHARES IF THE GRANTEE SHOULD CHOOSE TO VIOLATE THIS NON-SOLICITATION OF EMPLOYEES PROVISION DURING THE PERIOD OF RESTRICTION OR WITHIN ONE (1) YEAR AFTER THE SETTLEMENT DATE.
e. Injunctive and Other Available Relief. By acceptance of the award of these Restricted Stock Units and any Shares issued in settlement thereof, the Grantee acknowledges that, if the Grantee were to breach or threaten to breach his/her obligation hereunder not to Interfere or Solicit or not to disclose or use any Confidential Information other than in the course of performing authorized services for the Company (or any Affiliated Company), the harm caused to the Company by such breach or threatened breach would be, by its nature, irreparable because, among other things, damages would be significant and the monetary harm that would ensue would not be able to be readily proven, and that the Company would be entitled to injunctive and other appropriate relief to prevent threatened or continued breach and to such other remedies as may be available at law or in equity. To the extent not prohibited by law, any cancellation of the Restricted Stock Units pursuant to any of Sections 9(b) through 9(d) above shall not restrict, abridge or otherwise limit in any fashion the types and scope of injunctive and other available relief to the Company. Notwithstanding any provision of these RSU Terms and Conditions to the contrary, nothing under these RSU Terms and Conditions shall limit, abridge, modify or otherwise restrict the Company (or any Affiliated Company) from pursuing any or all legal, equitable or other appropriate remedies to which the Company may be entitled under any other agreement with the Grantee, any other plan, program, policy or arrangement of the Company (or any Affiliated Company) under which the Grantee is covered or participates, or any applicable law, all to the fullest extent not prohibited under applicable law.
f. Permitted Reporting and Disclosure. Notwithstanding any language in these RSU Terms and Conditions to the contrary, nothing in these RSU Terms and Conditions prohibits the Grantee from reporting possible violations of federal law or regulation to any governmental agency or governmental entity, or making other disclosures that are protected under federal law or regulation; provided, that, in each case such communications and disclosures are consistent with applicable law. Notwithstanding the foregoing, under no circumstance is the Grantee authorized to disclose any information covered by the Company’s attorney-client privilege or attorney work product or the Company’s trade secrets without prior written consent of the Company’s Chief Legal Officer. Any reporting or disclosure permitted under this Section 9(f) shall not result in the cancellation of Shares. The Grantee is entitled to certain immunities from liability under state and federal law for disclosing trade secrets if the disclosure was made to report or investigate an alleged violation of law, subject to certain conditions. Please see the Company’s Confidential Information Policy for further details.
10. Right to Retain Units/Shares Contingent on Continuing Non-Conflicting Employment. In partial consideration for the award of these Restricted Stock Units in order to forestall the disclosure or use of Confidential Information, as well as to deter the Grantee’s intentional interference with the contractual relations of the Company or any Affiliated Company, the Grantee’s intentional interference with prospective economic advantage of the Company or any Affiliated Company, and to promote fair competition, the Grantee agrees by accepting the award of these Restricted Stock Units that the Grantee’s right to receive the Shares upon settlement of the Restricted Stock Units is contingent upon the Grantee refraining, during the Period of Restriction and for a period of one (1) year after the Settlement Date, from rendering services, directly or indirectly, as director, officer, employee, agent, consultant or otherwise, to any Conflicting Organization except a Conflicting Organization whose business is diversified and that, as to that part of its business to which the Grantee renders services, is not a Conflicting Organization, provided that the Company shall receive separate written assurances satisfactory to the Company from the Grantee and the Conflicting Organization that the Grantee shall not render services during such period with respect to a Conflicting Product. If, prior to the expiration of the Period of Restriction or at any time within one (1) year after the Settlement Date, the Grantee shall render services to any Conflicting Organization other than as expressly permitted herein, the Grantee’s right to the Shares upon settlement of the Restricted Stock Units shall not have been earned and the Restricted Stock Units, whether vested or not, will be immediately cancelled, and the Grantee shall immediately return to the Company the Shares issued in settlement of the Restricted Stock Units or the pre-tax income derived
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from any disposition of such Shares. THE GRANTEE UNDERSTANDS AND ACKNOWLEDGES BY ACCEPTING THE AWARD OF THESE UNITS THAT THIS PARAGRAPH IS NOT INTENDED TO AND DOES NOT PROHIBIT THE GRANTEE FROM RENDERING SERVICES TO A CONFLICTING ORGANIZATION, BUT PROVIDES FOR THE CANCELLATION OF THE UNITS AND A RETURN TO THE COMPANY OF THE SHARES OR THE GROSS TAXABLE PROCEEDS OF THE SHARES IF THE GRANTEE SHOULD CHOOSE TO RENDER SUCH SERVICES DURING THE PERIOD OF RESTRICTION OR WITHIN ONE YEAR AFTER THE SETTLEMENT DATE.
11. Data Privacy. By accepting the grant of these Restricted Stock Units, the Grantee explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Grantee’s personal data as described in these RSU Terms and Conditions and any other award materials by and among the entities in the Company for the purpose of implementing, administering and managing the Grantee’s participation in the Plan. The Grantee understands that the Company may hold certain personal information about the Grantee, including, but not limited to, the Grantee’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares or directorships held in the Company, details of all awards, or any other entitlement to shares granted, canceled, exercised, vested, unvested or outstanding in the Grantee’s favor (“Data”), for the purpose of implementing, administering and managing the Plan. The Grantee understands that Data will be transferred to such Plan service provider as may be selected by the Company, presently or in the future, which may be assisting the Company with the implementation, administration and management of the Plan. The Grantee understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipient’s country (e.g., the United States) may have different data privacy laws and protections than the Grantee’s country. By accepting the grant of these Restricted Stock Units, the Grantee authorizes the Company, the Plan service provider as may be selected by the Company, and any other possible recipients which may assist the Company, presently or in the future, with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Grantee’s participation in the Plan. Further, the Grantee understands that, by accepting the grant of these Restricted Stock Units, he or she is providing the consents herein on a purely voluntary basis. If the Grantee does not consent, or if the Grantee later seeks to revoke the Grantee’s consent, or instructs the Company to cease processing of the Data, the Grantee’s continuous service status will not be adversely affected; the only adverse consequence of refusing or withdrawing the Grantee’s consent, or instructing the Company to cease processing, is that the Company would not be able to grant the Grantee the Shares, this Award or any other awards or administer or maintain such awards. Therefore, the Grantee understands that refusing or withdrawing the Grantee’s consent may affect the Grantee’s ability to participate in the Plan. For more information on the consequences of the Grantee’s refusal to consent or withdrawal of consent, the Grantee understands that he or she may contact the Grantee’s local human resources representative.
12. Repayment Obligations. Awards under the Plan, including this Award and any outstanding Award granted prior to the date hereof, are subject to clawback in accordance with the terms of the Company’s Policy Regarding Clawback of Incentive Compensation, as amended from time to time, and pursuant to any other policy the Company may adopt from time to time as required by applicable law (collectively, the “Clawback Policy”), which Clawback Policy shall apply and be deemed incorporated herein to the extent applicable. To the extent that any portion of the Clawback Policy relating to recoupment in connection with a restatement of financial results to correct a material error is not applicable to the Award, and in the event that (1) the Company issues a restatement of financial results to correct a material error and (2) the Committee determines, in good faith, that the Grantee’s fraud or willful misconduct was a significant contributing factor to the need to issue such restatement and (3) some or all of the Restricted Stock Units that were granted and/or vested prior to such restatement would not have been granted and/or vested, as applicable, based upon the restated financial results, the Grantee shall immediately return to the Company any Units or any Shares or the pre-tax income derived from any disposition of any Shares previously received in settlement of the Restricted Stock Units that would not have been granted and/or vested based upon the restated financial results (the “Repayment Obligation”). The Company shall be able to enforce the Repayment Obligation by all legal means available, including, without limitation, by withholding such amount from other sums owed by the Company to the Grantee. No recovery of any Award pursuant to the Clawback Policy or the Repayment Obligation shall be treated as an event giving rise to a Participant’s right to terminate employment for “good reason” or “constructive termination” (or any similar term) under any agreement with the Company. The Company’s rights contemplated in this Section 11 and/or pursuant to any recoupment or clawback policy (including the Clawback Policy and the Repayment Obligation) are not exclusive, and therefore the availability of such remedies are without
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prejudice to any and all other remedies available to the Company pursuant to applicable law or under any other contract or agreement.
13. Miscellaneous Provisions.
a. Rights as a Stockholder. Neither the Grantee nor the Grantee’s transferee or representative shall have any rights as a stockholder with respect to any Shares subject to this Award until the Restricted Stock Units have been settled and Share certificates have been issued to the Grantee, transferee or representative, as the case may be.
b. Choice of Law, Exclusive Jurisdiction and Venue. These RSU Terms and Conditions shall be governed by, and construed in accordance with, the laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of these RSU Terms and Conditions to the substantive law of another jurisdiction. The courts of the State of Delaware shall have exclusive jurisdiction over any disputes or other proceedings relating to these RSU Terms and Conditions, and venue shall reside with the courts in New Castle County, Delaware, including if jurisdiction shall so permit, the U.S. District Court for the District of Delaware. Accordingly by accepting the award of these Restricted Stock Units, the Grantee agrees that any claim of any type relating to these RSU Terms and Conditions or the award of these Restricted Stock Units must be brought and maintained in the appropriate court located in New Castle County, Delaware, including if jurisdiction will so permit, in the U.S. District Court for the State of Delaware. By accepting the award of these Restricted Stock Units, the Grantee consents to the jurisdiction over the Grantee of any such courts and waives all objections based on venue or inconvenient forum.
c. Modification or Amendment. These RSU Terms and Conditions may be modified or amended by the Board or the Committee at any time; provided, however, no modification or amendment to these RSU Terms and Conditions shall be made which would materially and adversely affect the rights of the Grantee, without such Grantee’s written consent.
d. Severability. In the event any provision of these RSU Terms and Conditions shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions of these RSU Terms and Conditions, and these RSU Terms and Conditions shall be construed and enforced to reflect the intent of the parties to the fullest extent not prohibited by law, and in the event that such provision is not able to be so construed and enforced, then these RSU Terms and Conditions shall be construed and enforced as if such illegal or invalid provision had not been included. In amplification of the preceding sentence, in the event that the time period or scope of any provision is declared by a court or arbitrator of competent jurisdiction to exceed the maximum time period or scope that such court or arbitrator deems enforceable, then such court or arbitrator shall have the power to reduce the time period or scope to the maximum time period or scope permitted by law.
e. References to Plan. All references to the Plan shall be deemed references to the Plan as may be amended.
f. Headings. The captions used in these RSU Terms and Conditions are inserted for convenience and shall not be deemed a part of these Terms and Conditions for construction or interpretation.
g. Interpretation. Any dispute regarding the interpretation of these RSU Terms and Conditions shall be submitted by the Grantee or by the Company forthwith to the Board or the Committee, which shall review such dispute at its next regular meeting. The resolution of such dispute by the Board or the Committee shall be final and binding on all persons. It is the intention of the Company and the Grantee to make the promises contained in these RSU Terms and Conditions reasonable and binding only to the extent that they may be lawfully done under existing applicable laws. These RSU Terms and Conditions and the Plan constitute the entire and exclusive terms and conditions applicable to this grant of Units, and supersede all prior agreements or understandings, whether written or oral, with respect to the grant of Units set forth in these RSU Terms and Conditions.
h. Section 409A Compliance. These RSU Terms and Conditions are subject to Section 25(f) of the Plan.
Notwithstanding any provision of the Plan to the contrary, if the Grantee is a “specified employee” (as defined in Section 1.409A-1(i) of the Treasury Department Regulations) at the time of the Grantee’s “separation from service” (as defined in Section 1.409A-1(h) of the Treasury Department Regulations and including a termination of
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employment or service on account of Disability that does not satisfy the definition of “disability” under Section 409A-3(i)(4) of the Treasury Department Regulations), and payments to the Grantee hereunder are not exempt from Section 409A as a short-term deferral or otherwise, these payments, to the extent otherwise payable within six (6) months after the Grantee’s separation from service shall be delayed until the earlier of the date which is six (6) months after the date of the Grantee’s separation from service or the date of death of the Grantee. Any payments that were scheduled to be paid during the six (6) month period following the Grantee’s separation from service, but which were delayed pursuant to this Section 12(h), shall be paid without interest on, or as soon as administratively practicable after, the first day following the six (6) month anniversary of the Grantee’s separation from service (or, if earlier, the date of the Grantee’s death). Any payments that were originally scheduled to be paid following the six (6) months after the Grantee’s separation from service shall continue to be paid in accordance with their predetermined schedule.
i. Agreement with Terms. Receipt of any benefits under these RSU Terms and Conditions by the Grantee shall constitute the Grantee’s acceptance of and agreement with all of the provisions of these RSU Terms and Conditions and of the Plan that are applicable to these RSU Terms and Conditions, and the Company shall administer these RSU Terms and Conditions accordingly.
16. Country-Specific Provisions. This Award shall be subject to any additional or different terms and conditions set forth in Exhibit B. Moreover, if the Grantee relocates to one of the countries included in Exhibit B, the additional or different terms and conditions for such country will apply to the Grantee, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. Exhibit B constitutes part of these RSU Terms and Conditions.
BY ACCEPTING THE AWARD OF THESE UNITS, THE GRANTEE ACKNOWLEDGES, AGREES AND CONSENTS TO THE FOLLOWING PROVISIONS:
THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE GRANTEE’S RIGHT TO THE SHARES PURSUANT TO THESE RSU TERMS AND CONDITIONS IS ACCEPTED AND EARNED ONLY BY CONTINUING EMPLOYMENT (FOR PURPOSES OF THIS PARAGRAPH, IGNORING ANY ELECTION TO DEFER SETTLEMENT PURSUANT TO SECTION 6) AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS AWARD OR ACQUIRING SHARES HEREUNDER) AND BY ACHIEVEMENT OF THE PERFORMANCE CRITERIA AND BY COMPLIANCE WITH THE GRANTEE’S VARIOUS OBLIGATIONS UNDER THESE RSU TERMS AND CONDITIONS. THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THESE RSU TERMS AND CONDITIONS, NOR IN THE PLAN, SHALL CONFER UPON THE GRANTEE ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE THE GRANTEE’S EMPLOYMENT AT ANY TIME, FOR ANY REASON OR NO REASON, WITH OR WITHOUT CAUSE, AND WITH OR WITHOUT ADVANCE NOTICE EXCEPT AS MAY BE REQUIRED BY APPLICABLE LAW.
The Grantee acknowledges that a copy of the Plan and Plan Information are available for viewing on the Company’s internal HR website at https://team.clorox.com/sites/ClxWeb/hr/SitePages/Stock-Incentive-Plan.aspx, and the Company’s Annual Report and Proxy Statement (the “Prospectus Information”) are available for viewing on the Company’s website at https://investors.thecloroxcompany.com/investors/financial-information/sec-filings/default.aspx. The Grantee consents to receive the Prospectus Information electronically or, in the alternative, to contact People@Clorox.com to request a paper copy of the Prospectus Information. The Grantee represents that s/he is familiar with the terms and provisions thereof, and accepts these RSU Terms and Conditions subject to all of the terms and provisions thereof. The Grantee has reviewed the Plan and these RSU Terms and Conditions in their entirety, has had an opportunity to obtain the advice of counsel prior to accepting the Award of these Restricted Stock Units and fully understands all provisions of these RSU Terms and Conditions. The Grantee acknowledges and agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan or these RSU Terms and Conditions. The Grantee further agrees to notify the Company upon any change in the residence address on file with the Company.
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EXHIBIT A
| Grantee | [Participant Name] | ||||
| Total Restricted Stock Units Awarded | [Target PSUs Granted] | ||||
| Award ID | [Award ID] | ||||
| Grant Date | [Grant Date] | ||||
| Period of Restriction | [25% vests on each of October 5, 2027, 2028, 2029 and 2030, or the first trading day immediately preceding each such date if such date is not a trading day; provided, that an additional number of whole Units shall vest during any calendar year in which the Grantee is eligible under the RSU Terms and Conditions to terminate employment or services due to Retirement in an amount sufficient to satisfy any applicable tax withholding amounts arising due to such Retirement eligibility (disregarding any fractional Unit).]3 [1/3 of the award vests on each of the first three anniversaries of the grant date.]4 | ||||
—––––––––––––––––––––––
3 Note to Draft: To be included in Annual grants.
4 Note to Draft: To be included in Off-Cycle grants
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.
EXHIBIT B
This Exhibit B constitutes part of the RSU Terms and Conditions and includes additional or different terms and conditions that govern this Award if the Grantee resides and/or works outside the United States.
The terms and conditions in Part A of this Exhibit B apply to all Grantees who reside and/or work outside the United States. The terms and conditions in Part B of this Exhibit B will also apply to the Grantee if he or she resides and/or works in one of the countries referenced in Part B. Capitalized terms used but not defined herein shall have the same meanings assigned to them in the Plan and/or the RSU Terms and Conditions.
If the Grantee is a citizen or resident of a country, or is considered a resident of a country, other than that in which he or she is currently residing and/or working, or transfers residence and/or employment after the grant date, the information contained herein may not apply to the Grantee in the same manner.
PART A: ALL COUNTRIES OUTSIDE THE UNITED STATES
The following additional terms and conditions will apply to the Grantee if he or she works and/or resides in any country outside the United States.
1. Taxes.
The following language replaces Section 4 of the RSU Terms and Conditions:
The Grantee acknowledges that regardless of any action the Company or, if different, the Grantee’s employer (the “Employer”) takes with respect to any or all income tax (including federal, state and local taxes), social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to the Grantee’s participation in the Plan and legally applicable to the Grantee or deemed applicable to the Grantee (the “Tax-Related Items”), the ultimate liability for all Tax-Related Items is and remains his or her responsibility and may exceed the amount actually withheld by the Company or the Employer. The Grantee further acknowledges that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of this Award or the underlying Shares, including, but not limited to, the grant, vesting or settlement of this Award, the issuance of Shares upon settlement of this Award, the subsequent sale of Shares acquired pursuant to such issuance and the receipt of any dividends and/or any dividend equivalents; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of this Award to reduce or eliminate the Grantee’s liability for Tax-Related Items or achieve any particular tax result. Further, if the Grantee has become subject to tax in more than one jurisdiction, the Grantee acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.
In connection with any relevant taxable or tax withholding event, as applicable, the Grantee will pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. In this regard, the Grantee authorizes the Company and/or the Employer, or their respective agents, at their discretion, to satisfy any applicable withholding obligations or rights with regard to all Tax-Related Items by one or a combination of the following:
(a)withholding from the Grantee’s wages or other cash compensation payable to him or her by the Company and/or the Employer; or
(b)requiring the Grantee to make a payment in a form acceptable to the Company in an amount equal to the withholding obligations for Tax-Related Items; or
(c)withholding from proceeds of the sale of Shares acquired upon vesting/settlement of this Award either through a voluntary sale or through a mandatory sale arranged by the Company (on the Grantee’s behalf pursuant to this authorization without further consent); or
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(d)withholding in Shares to be issued upon vesting/settlement of this Award; provided, however, that to the extent necessary to qualify for an exemption from the application of Section 16(b) of the U.S. Securities Exchange Act of 1934, as amended, if applicable, such share withholding procedure will be subject to the express prior approval of the Board or the Committee; or
(e)any other method determined by the Company to be in compliance with Applicable Laws.
The Company may withhold or account for Tax-Related Items by considering statutory withholding rates or other applicable withholding rates, including maximum applicable rates in the Grantee’s country, in which case the Grantee may receive a refund of any over-withheld amount in cash (with no entitlement to the Share equivalent), or if not refunded, the Grantee may need to seek a refund from the local tax authorities. In the event of under-withholding, the Grantee may be required to pay any additional Tax-Related Items directly to the applicable tax authority or to the Company and/or the Employer. If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, the Grantee will be deemed to have been issued the full number of Shares subject to the vested Award, notwithstanding that a number of the Shares is held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of the Grantee’s participation in the Plan.
Finally, the Grantee agrees to pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of his or her participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to issue or deliver the Shares or the proceeds of the sale of Shares, if the Grantee fails to comply with his or her obligations in connection with the Tax-Related Items.
2. Nature of Grant.
By accepting this Award, the Grantee acknowledges, understands and agrees that:
(a)the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;
(b)the Plan is operated and this Award is granted solely by the Company and only the Company is a party to the RSU Terms and Conditions; accordingly, any rights the Grantee may have under the RSU Terms and Conditions may be raised only against the Company but not any Subsidiary or affiliate of the Company (including, but not limited to, the Employer);
(c)no Subsidiary or affiliate of the Company (including, but not limited to, the Employer) has any obligation to make any payment of any kind to the Grantee under the Agreement;
(d)the grant of this Award is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of Units, or benefits in lieu of Units, even if Units have been granted in the past;
(e)all decisions with respect to future grants of Units, if any, will be at the sole discretion of the Company;
(f)the grant of this Award and the Grantee’s participation in the Plan shall not create a right to employment or other service relationship with the Company;
(g)the grant of this Award and the Grantee’s participation in the Plan shall not be interpreted as forming or amending an employment or service contract with the Company or the Employer and shall not interfere with the ability of the Company, the Employer or any Subsidiary or affiliate of the Company, as applicable, to terminate the Grantee’s employment or service relationship;
(h)the Grantee is voluntarily participating in the Plan;
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(i)this Award and the Shares subject to this Award, and the income from and value of same, are extraordinary items that do not constitute compensation of any kind for services of any kind rendered to the Company or the Employer, and which are outside the scope of the Grantee’s employment or service contract, if any;
(j)this Award and the Shares subject to this Award, and the income from and value of same, are not intended to replace any pension rights or compensation;
(k)unless otherwise agreed with the Company in writing, this Award and the Shares subject to this Award, and the income from and value of same, are not granted as consideration for, or in connection with, the service the Grantee may provide as a director of a Subsidiary or affiliate of the Company;
(l)this Award and the Shares subject to this Award, and the income from and value of same, are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, holiday pay, leave-related payments, holiday top-up, pension or retirement or welfare benefits or similar payments;
(m)the future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty;
(n)no claim or entitlement to compensation or damages shall arise from forfeiture of this Award resulting from termination of the Grantee’s employment or service (for any reason whatsoever, whether or not later found to be invalid or in breach of applicable laws in the jurisdiction where the Grantee is employed or the terms of the Grantee's employment agreement, if any) or from the application of any clawback or recoupment policy adopted by the Company, including the Clawback Policy, or imposed by Applicable Laws;
(o)for purposes of this Award, the Grantee’s termination date will be the date he or she is no longer actively providing services to the Company, the Employer or any of the other Subsidiaries or affiliates of the Company (regardless of the reason for such termination and whether or not later found to be invalid or in breach of applicable laws in the jurisdiction where the Grantee is employed or the terms of the Grantee’s employment agreement, if any) and unless otherwise determined by the Company, such date will not be extended by any notice period (e.g., the Grantee’s period of employment would not include any contractual notice period or any period of “garden leave” or similar period mandated under applicable laws in the jurisdiction where the Grantee is employed or the terms of the Grantee’s employment agreement, if any); the Committee shall have the exclusive discretion to determine when the Grantee is no longer actively providing services for purposes of this Award (including whether the Grantee may still be considered to be providing services while on a leave of absence);
(p)unless otherwise provided in the Plan or by the Company in its discretion, this Award and the benefits evidenced by this Agreement do not create any entitlement to have this Award or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Shares; and
(q)neither the Company, the Employer nor any Subsidiary or affiliate of the Company shall be liable for any foreign exchange rate fluctuation between the Grantee’s local currency and the United States Dollar that may affect the value of this Award or of any amounts due to the Grantee pursuant to the vesting of this Award or the subsequent sale of any Shares acquired upon settlement.
3. No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Grantee’s participation in the Plan, or his or her acquisition or sale of the underlying Shares. The Grantee is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.
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4. Insider Trading Restrictions / Market Abuse Laws. The Grantee may be subject to insider trading restrictions and/or market abuse laws, which may affect his or her ability to accept, acquire, sell or otherwise dispose of Shares, rights to acquire Shares (e.g., Units) or rights linked to the value of Shares during such times as the Grantee is considered to have "inside information" regarding the Company as defined by or determined under the laws or regulations in the applicable jurisdictions. Local insider trading laws and regulations may prohibit the cancellation or amendment of orders the Grantee placed before he or she possessed inside information. Furthermore, the Grantee could be prohibited from (i) disclosing the inside information to any third party and (ii) "tipping" third parties or causing them otherwise to buy or sell securities, where third parties include fellow employees. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. The Grantee acknowledges that it is his or her responsibility to comply with any applicable restrictions and that he or she should speak to his or her personal legal advisor on this matter.
5. Foreign Asset / Account Reporting Requirements, Exchange Controls and Tax Requirements. The Grantee’s country may have certain foreign asset and/or account reporting requirements and exchange controls which may affect the Grantee’s ability to acquire or hold Shares under the Plan or cash received from participating in the Plan (including from any dividends received or sale proceeds arising from the sale of Shares) in a brokerage or bank account outside the Grantee’s country. The Grantee may be required to report such accounts, assets or transactions to the tax or other authorities in the Grantee’s country. The Grantee also may be required to repatriate sale proceeds or other funds received as a result of the Grantee’s participation in the Plan to the Grantee’s country through a designated bank or broker and/or within a certain time after receipt. In addition, the Grantee may be subject to tax payment and/or reporting obligations in connection with any income realized under the Plan and/or from the sale of Shares. The Grantee acknowledges that it is the Grantee’s responsibility to be compliant with all such requirements, and the Grantee should consult his or her personal legal and tax advisors, as applicable, to ensure his or her compliance.
6. Issuance of Shares.If advisable due to local law requirements, the Committee, in its sole and absolute discretion, may require the immediate forced sale of the Shares issuable upon vesting of this Award. Alternatively, unless otherwise set forth in this Exhibit B, the Committee, in its sole and absolute discretion, may determine to pay out this Award in cash equal to the Fair Market Value of the Shares issuable pursuant to this Award.
7. Imposition of Other Requirements.The Company reserves the right to impose other requirements on the Grantee’s participation in the Plan, on this Award and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with Applicable Laws or facilitate the administration of the Plan, and to require the Grantee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
8. Language. The Grantee acknowledges and represents that he or she is proficient in the English language, or has consulted with an advisor who is proficient in the English language, so that the Grantee understands the terms of the Plan and this Agreement and any other documents related to the Plan. If the Grantee has received this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different from the English version, the English version will control, unless otherwise required by applicable law.
9. Electronic Delivery and Participation. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation by electronic means. The Grantee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.
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PART B: COUNTRY-SPECIFIC TERMS AND CONDITIONS
EUROPEAN UNION ("EU") / EUROPEAN ECONOMIC AREA ("EEA") / UNITED KINGDOM
If the Grantee works and/or resides in a country in the EU, EEA or the United Kingdom, the following provisions replace Section 11 of the RSU Terms and Conditions:
Data Privacy. To participate in the Plan, the Grantee must review the following information in (a) through (g) below and consent to the collection, usage and processing of the Grantee's Personal Data (as defined below) by or on behalf of the Company, the Employer and/or any Subsidiary and the third parties described in (c) below.
The Company, with its registered office at 1221 Broadway, Oakland, CA 94162, U.S.A., is the controller of the Grantee's Personal Data in connection with this Award, the Plan and the RSU Terms and Conditions. The Company's representative in Ireland is Clorox Ireland Limited, with its primary office at Suite 101 Bottleworks, 15 Barrow Street, Ringsend, Dublin, D04 DE93, Ireland, and its representative in the United Kingdom is CBee (Europe) Limited, with its primary office at 2 Sheen Road, Richmond, England TW9 1AE, United Kingdom.
(a)Declaration of Consent. By accepting the Units via the Company's acceptance procedure, the Grantee is declaring that he or she understands and agrees with the data processing practices described herein and consents to the collection, processing and use of Personal Data (as defined below) by the Company and the transfer of Personal Data to the recipients mentioned herein, including recipients located in countries which do not provide an adequate level of protection from a local data protection law perspective, for the purposes described herein.
(b)Data Collection, Usage and Processing. The Company collects, uses and processes Personal Data about the Grantee for the purposes of implementing, administering and managing the Plan and allocating Shares issued thereunder. The Grantee understands that this Personal Data may include, without limitation, the Grantee's name, home address and telephone number, email address, date of birth, social insurance number, passport number or other identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all Units or any other entitlement to Shares or equivalent benefits awarded, canceled, exercised, vested, unvested or outstanding in the Grantee's favor (the "Personal Data"). The Company's legal basis for the processing of the Grantee's Personal Data, where required, is the Grantee's consent.
(c)Stock Plan Administration Service Providers. The Company transfers the Grantee's Personal Data, or parts thereof, to UBS Financial Services, Inc. (“UBS”) (and its affiliated companies), an independent service provider based in the United States which assists the Company with the implementation, administration and management of the Plan. In the future, the Company may select a different service provider and share the Grantee's Personal Data with such different service provider that serves the Company in a similar manner. The Grantee understands and acknowledges that the Company's service provider will open an account for the Grantee to receive and trade Shares acquired under the Plan and that the Grantee will be asked to agree on separate terms and data processing practices with the service provider, which is a condition of the Grantee's ability to participate in the Plan.
(d)International Data Transfers. The Company and, as of the date hereof, any third parties assisting in the implementation, administration and management of the Plan, such as UBS, are based in the United States. The Grantee understands and acknowledges that the Grantee's country may have enacted data privacy laws that are different from the laws of the United States. The Company's legal basis for the transfer of the Grantee's Personal Data is the Grantee's consent.
(e)Data Retention. The Company will use the Grantee's Personal Data only as long as is necessary to implement, administer and manage the Grantee's participation in the Plan, or to comply with legal or regulatory obligations, including under tax and securities laws. In the latter case, the Grantee understands
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and acknowledges that the Company's legal basis for the processing of the Grantee's Personal Data would be compliance with the relevant laws or regulations. When the Company no longer needs the Grantee's Personal Data for any of the above purposes, the Grantee understands the Company will remove it from its systems.
(f)Voluntariness and Consequences of Denial/Withdrawal of Consent. The Grantee understands that the Grantee's participation in the Plan and the Grantee's consent are voluntary. The Grantee may deny or later withdraw the Grantee's consent at any time, with future effect and for any or no reason. If the Grantee denies or later withdraws his or her consent, the Grantee's employment status or service with the Employer will not be affected; the only consequence of denying or withdrawing consent is that the Company would not be able to grant Units or other equity awards to the Grantee or administer or maintain such awards.
(g)Data Subject Rights. The Grantee understands that data subject rights regarding the processing of his or her Personal Data vary depending on the applicable law and that, depending on where the Grantee is based, the Grantee may have, without limitation, the rights to (i) request access to or copies of Personal Data the Company processes, (ii) correction of incorrect Personal Data, (iii) deletion of Personal Data, (iv) restrictions on the processing of Personal Data, (v) object to the processing of Personal Data for legitimate interests, (vi) portability of Personal Data, (vii) lodge complaints with competent authorities in the Grantee's jurisdiction, and/or (viii) receive a list with the names and addresses of any potential recipients of his or her Personal Data. To receive clarification regarding any of the Grantee's rights or to exercise any of his or her rights, the Grantee should contact the Grantee's local human resources representative.
ARGENTINA
Labor Law Acknowledgement. By accepting this Award, the Grantee acknowledges and agrees that the grant of this Award is made by the Company (and not the Employer) in its sole discretion and that the value of this Award and any Shares acquired under the Plan shall not constitute salary or wages for any purpose under Argentine labor law, including, but not limited to, the calculation of (a) any labor benefits including, without limitation, vacation pay, thirteenth salary, compensation in lieu of notice, annual bonus, disability, and leave of absence payments, etc., or (b) any termination or severance indemnities or similar payments. If, notwithstanding the foregoing, any benefits under the Plan are considered as salary or wages for any purpose under Argentine labor law, the Grantee acknowledges and agrees that such benefits shall not accrue more frequently than on the relevant vesting date(s).
Securities Law Information. Neither the Units nor the underlying Shares have been and will be publicly issued, placed, distributed, offered, or registered in the Argentine capital markets and, as a result have not been and will not be registered with the Argentine Securities Commission (Comisión Nacional de Valores). Neither this Exhibit B nor any other offering material related to this Award or the underlying Shares may be utilized in connection with any general offering to the public in Argentina. Argentine residents who are granted Units and acquire Shares under the Plan do so under their own responsibility according to the terms of a private offering made from outside Argentina. Any Argentine resident who acquires Shares shall not transfer such Shares to any other person within a period of six (6) months from acquiring the Shares, unless the transaction is conducted out of Argentina.
AUSTRALIA
Securities Law Information. This offer is being made under Division 1A, Part 7.12 of the Corporations Act 2001 (Cth).
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CANADA
Awards Settled in Shares Only. Notwithstanding any discretion contained in the Plan, Awards granted to Grantees in Canada shall be paid in Shares only and do not provide any right for the Grantee to receive a cash payment.
Nature of Grant.
The following provision replaces Section (c) of Part A, “Nature of Grant” of this Exhibit B:
Except as required under applicable legislation, no Subsidiary or affiliate of the Company (including, but not limited to, the Employer) has any obligation to make any payment of any kind to the Grantee under the Agreement;
The following provision replaces Section (l) of Part A, “Nature of Grant” of this Exhibit B:
Except as required under applicable legislation, this Award and the Shares subject to this Award, and the income from and value of same, are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, holiday pay, leave-related payments, holiday top-up, pension or retirement or welfare benefits or similar payments;
The following provision replaces Section (o) of Part A, “Nature of Grant” of this Exhibit B:
For purposes of this Award, except to the extent expressly provided in this Agreement or expressly required by applicable legislation, the Grantee’s employment or other service relationship will be considered terminated (regardless of the reason for such termination) and his or her right to vest in this Award under the Plan, if any, will terminate as of the date the Grantee is no longer employed by or providing services to the Company and any Subsidiary or affiliate of the Company (the “Termination Date”). Except to the extent required by applicable legislation, the Termination Date will exclude any notice period or period of pay in lieu of such notice required under statute, contract, common/civil law or otherwise. The Grantee will not earn or be entitled to any pro-rated vesting for that portion of time before the date on which his or her right to vest terminates, nor will the Grantee be entitled to any compensation for lost vesting.
In case of any dispute as to whether termination of employment has occurred that cannot be reasonably determined under the terms of this Agreement and the Plan, the Committee will have sole discretion, subject to applicable legislation, to determine whether such termination of employment has occurred and the effective date of such termination. Notwithstanding the foregoing, if applicable employment standards legislation requires continued entitlement to vesting during a statutory notice period, the Termination Date and the termination of the Grantee’s right to vest in or otherwise benefit from this Award under the Plan, if any, will be effective as of the earliest date permitted under applicable legislation. For clarity, the Grantee will not earn or be entitled to pro-rated vesting if the vesting date falls after this earliest statutory date, nor will the Grantee be entitled to any compensation for lost vesting, benefits or participation. For further clarity, any reference to a termination of the Grantee's employment or service in the RSU Terms and Conditions or in the Plan will be interpreted to mean the Termination Date as defined herein.
Securities Law Information.
The Grantee is permitted to sell Shares acquired through the designated broker under the Plan, if any, provided the resale of Shares acquired under the Plan takes place outside Canada through the facilities of a stock exchange on which the Shares are listed. The Shares are currently listed on the New York Stock Exchange, which is located outside of Canada, and the Shares may be sold through this exchange.
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CHILE
Securities Law Information.
The offer of the Units is effective as of the grant date set forth in Exhibit A. The offer of the Units is subject to General Ruling N° 336 of the Chilean Commission for the Financial Market (“CMF”). The offer refers to securities not registered in the Securities Registry or in the Foreign Securities Registry of the CMF, and therefore the securities are not subject to oversight of the CMF. Given that the Units are not registered in Chile, the Company is not required to provide public information about the Units or the Shares in Chile. Unless the Units and/or the Shares are registered with the CMF, a public offering of such securities cannot be made in Chile.
COLOMBIA
Labor Law Acknowledgement. The Grantee acknowledges that pursuant to Article 128 of the Colombia Labor Code, the Plan and related benefits, including this Award, do not constitute a component of “salary” for any purposes. The Plan and related benefits will not be included and / or considered for purposes of calculating any and all labor benefits, such as legal / fringe benefits, vacation, indemnities, payroll taxes, social insurance contributions (except as required by Article 30 of Law 1393/2010) and / or any other labor related amount which may be payable.
Securities Law Information.
The Shares are not and will not be registered with the Colombian registry of publicly traded securities (Registro Nacional de Valores y Emisores) and therefore the Shares may not be offered to the public in Colombia. Nothing in this document should be construed as the making of a public offer of securities in Colombia.
COSTA RICA
There are no country-specific provisions.
HONG KONG
Awards Settled in Shares Only. Notwithstanding any discretion contained in the Plan, Awards granted to Grantees in Hong Kong shall be paid in Shares only and do not provide any right for the Grantee to receive a cash payment.
Sale of Shares. If this Award vests within six months of the grant date, the Grantee agrees that he or she will not dispose of the Shares acquired prior to the six-month anniversary of the grant date. The Grantee understands that any Shares acquired at vesting are accepted as a personal investment.
Securities Law Information. WARNING: The contents of this document have not been reviewed by any regulatory authority in Hong Kong. The Grantee is advised to exercise caution in relation to the offer. If the Grantee is in any doubt about any of the contents of this document, the Grantee should obtain independent professional advice. This Award and any Shares issued at vesting of this Award do not constitute a public offering of securities under Hong Kong law and are available only to employees of the Company. The RSU Terms and Conditions, including this Exhibit B, the Plan and other incidental communication materials distributed in connection with this Award (i) have not been prepared in accordance with and are not intended to constitute a “prospectus” for a public offering of securities under the applicable securities legislation in Hong Kong, and (ii) are intended only for the personal use of the Grantee and may not be distributed to any other person.
Nature of Scheme. The Company specifically intends that the Plan will not be an occupational retirement scheme for purposes of the Occupational Retirement Schemes Ordinance.
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IRELAND
Data Privacy. Please refer to Part B, "EU/EEA/United Kingdom" of this Exhibit B.
KOREA
There are no country-specific provisions.
MALAYSIA
There are no country-specific provisions.
MEXICO
Nature of Grant.
The following provision supplements Part A, “Nature of Grant” of this Exhibit B:
No Entitlement or Claims for Compensation. By accepting this Award, the Grantee understands and agrees that any modification of the Plan or the RSU Terms and Conditions or its termination shall not constitute a change or impairment of the terms and conditions of employment.
Policy Statement. The invitation that the Company is making under the Plan is unilateral and discretionary and, therefore, the Company reserves the absolute right to amend it and discontinue it at any time without any liability.
The Company, with registered offices at 1221 Broadway, Oakland CA 94162, U.S.A., is solely responsible for the administration of the Plan and participation in the Plan and, in the Grantee’s case, the acquisition of Shares does not, in any way, establish an employment relationship between the Grantee and the Company since the Grantee is participating in the Plan on a wholly commercial basis and his or her sole Employer is a Mexican Subsidiary or affiliate of the Company, nor does it establish any rights between the Grantee and the Employer.
Plan Document Acknowledgement. By accepting this Award, the Grantee acknowledges that he or she has received copies of the Plan and the RSU Terms and Conditions, has reviewed the Plan and the RSU Terms and Conditions in their entirety and fully understands and accepts all provisions of the Plan and the RSU Terms and Conditions.
In addition, by accepting the RSU Terms and Conditions, the Grantee further acknowledges that he or she has read and specifically and expressly approves the terms and conditions in Part A, “Nature of Grant” in this Exhibit B, in which the following is clearly described and established: (i) participation in the Plan does not constitute an acquired right; (ii) the Plan and participation in the Plan is offered by the Company on a wholly discretionary basis; (iii) participation in the Plan is voluntary; and (iv) the Company and its Subsidiaries and affiliates are not responsible for any decrease in the value of the Shares underlying this Award.
Finally, the Grantee hereby declares that he or she does not reserve any action or right to bring any claim against the Company for any compensation or damages as a result of participation in the Plan and therefore grants a full and broad release to the Employer and the Company and its Subsidiaries and affiliates with respect to any claim that may arise under the Plan.
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Spanish Translation
La siguiente disposición complementa la Parte A, «Naturaleza de la concesión», del presente Anexo B:
Ausencia de derecho o reclamación de indemnización. Al aceptar esta concesión, el Beneficiario entiende y acepta que cualquier modificación del Plan o de los Términos y condiciones de las RSU, así como su rescisión, no constituirá un cambio ni un menoscabo de los términos y condiciones de empleo.
Declaración de política. La invitación que la Empresa realiza en el marco del Plan es unilateral y discrecional y, por lo tanto, la Empresa se reserva el derecho absoluto de modificarla y suspenderla en cualquier momento sin incurrir en responsabilidad alguna.
La Empresa, con domicilio social en 1221 Broadway, Oakland, CA 94162, EE. UU., es la única responsable de la administración del Plan y de la participación en el mismo y, en el caso del Beneficiario, la adquisición de Acciones no establece, en modo alguno, una relación laboral entre el Beneficiario y la Empresa, ya que el Beneficiario participa en el Plan con carácter totalmente comercial y su único Empleador es una filial o Empresa asociada mexicana de la Empresa, ni establece ningún derecho entre el Beneficiario y el Empleador.
Declaración de conocimiento del documento del plan. Al aceptar esta concesión, el Beneficiario reconoce que ha recibido copias del Plan y de los Términos y condiciones de las RSU, que ha revisado el Plan y los Términos y condiciones de las RSU en su totalidad y que comprende y acepta plenamente todas las disposiciones del Plan y de los Términos y condiciones de las RSU.
Además, al aceptar los Términos y Condiciones de las RSU, el Beneficiario reconoce asimismo que ha leído y aprueba específica y expresamente los términos y condiciones de la Parte A, «Naturaleza de la concesión», del presente Anexo B, en la que se describe y establece claramente lo siguiente: (i) la participación en el Plan no constituye un derecho adquirido; (ii) el Plan y la participación en el mismo son ofrecidos por la Empresa de forma totalmente discrecional; (iii) la participación en el Plan es voluntaria; y (iv) la Empresa y sus filiales y sociedades vinculadas no se hacen responsables de ninguna disminución del valor de las Acciones subyacentes a esta Concesión.
Por último, el Beneficiario declara por la presente que no se reserva ninguna acción ni derecho para interponer reclamación alguna contra la Empresa en concepto de indemnización o daños y perjuicios como consecuencia de la participación en el Plan y, por lo tanto, concede una exención plena y amplia al Empleador, a la Empresa y a sus filiales y Empresas asociadas con respecto a cualquier reclamación que pueda surgir en el marco del Plan.
Securities Law Information.
Any Awards offered under the Plan and the Shares underlying this Award have not been registered with the National Register of Securities maintained by the Mexican National Banking and Securities Commission and cannot be offered or sold publicly in Mexico. In addition, the Plan and any other document relating to any Units may not be publicly distributed in Mexico. These materials are addressed to the Grantee only because of his or her existing relationship with the Company and these materials should not be reproduced or copied in any form. The offer contained in these materials does not constitute a public offering of securities but rather constitutes a private placement of securities addressed specifically to individuals who are present employees and consultants of the Company, made in accordance with the provisions of the Mexican Securities Market Law, and any rights under such offering shall not be assigned or transferred.
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PERU
Nature of Grant. The following provision supplements Part A, “Nature of Grant” of this Exhibit B:
Labor Law Acknowledgement. In accepting this Award, the Grantee acknowledges, understands and agrees that this Award is granted ex gratia for the purpose of rewarding the Grantee as set forth in the Plan.
Securities Law Information. The grant of this Award is considered a private offering in Peru; therefore, neither the grant of this Award, nor the issuance of Shares at vesting of this Award, is subject to securities registration in Peru. For more information concerning this offer, please refer to the Plan, this Agreement, the Plan prospectus (i.e., Plan Information) and any other grant documents made available to the Grantee by the Company. For more information regarding the Company, please refer to the Company’s most recent annual report on Form 10-K and quarterly report on Form 10-Q available at www.sec.gov.
.
PUERTO RICO
There are no country-specific provisions.
SOUTH AFRICA
Taxes. The following provision supplements Part A, “Taxes” of this Exhibit B:
By accepting this Award, the Grantee agrees to notify the Employer of the amount of any gain realized at vesting of this Award. If the Grantee fails to advise the Employer of the gain realized at vesting of this Award, he or she may be liable for a fine. The Grantee will be responsible for paying the difference between the actual tax liability and the amount withheld.
Securities Law Acknowledgement. In compliance with South African Securities Law, the Grantee acknowledges that he or she has been notified that the documents listed below are available for review online as follows:
1.the Company’s most recent Annual Report on Form 10-K –
https://investors.thecloroxcompany.com/financial-reporting/annual-reports/default.aspx
2.the Company’s most recent Plan prospectus (i.e., Plan Information) –
https://www.sec.gov/Archives/edgar/data/21076/000120677421002562/clorox3957551-def14a.htm#appendixa
The Grantee acknowledges that he or she may have copies of the above documents provided to him or her, at no charge, on request to People@Clorox.com.
UNITED ARAB EMIRATES
Securities Law Information. This Exhibit B, the Agreement, the Plan and any other documents the Grantee may receive in connection with his or her participation in the Plan are intended only for distribution to select employees of the Company and any Subsidiary or affiliate of the Company, including the Employer, and must not be delivered to, or relied on, by any other person. Awards granted under the Plan are intended to provide grantees with an incentive to contribute to the success of the Company.
Any securities (i,e., Shares) acquired at vesting of the Award may be subject to restrictions on their resale. Prospective acquirers of the securities offered should conduct their own due diligence on the securities. If the Grantee does not understand the contents of this statement, the Plan or the RSU Terms and Conditions, including this Exhibit B, the Grantee should consult an authorized financial advisor.
The Grantee should be aware that neither the UAE Central Bank, nor the Emirates Securities and Commodities Authority, nor any other licensing authority or government agency in the UAE has responsibility for reviewing or
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verifying any documents in connection with this statement, the Plan or the RSU Terms and Conditions. Neither the Ministry of the Economy nor the Dubai Department of Economic Development have approved this statement, the Plan or the RSU Terms and Conditions or taken any steps to verify the information set out in these documents and have no responsibility for such documents.
UNITED KINGDOM
Data Privacy. Please refer to Part B, "EU/EEA/United Kingdom" of this Exhibit B.
Taxes. The following provision supplements Part A, “Taxes” of this Exhibit B:
Without limitation to the “Taxes” section of Part A of this Exhibit B, the Grantee agrees that he or she is liable for all Tax-Related Items and hereby covenants to pay all such Tax-Related Items, as and when requested by the Company or the Employer or by HM Revenue and Customs (“HMRC”) (or any other tax authority or any other relevant authority). The Grantee also agrees to indemnify and keep indemnified the Company and the Employer against any Tax-Related Items that they are required to pay or withhold on the Grantee’s behalf or have paid or will pay to HMRC (or any other tax authority or other relevant authority) on the Grantee’s behalf.
Notwithstanding the foregoing, if the Grantee is a director or executive officer (within the meaning of Section 13(k) of the U.S. Securities Exchange Act of 1934, as amended), the Grantee may not be able to indemnify the Company or the Employer for the amount of any Tax-Related Items not collected from or paid by the Grantee as it may be considered a loan. In this case, the Tax-Related Items not collected or paid may constitute an additional benefit to the Grantee on which additional income tax and National Insurance contributions (“NIC”) may be payable. The Grantee acknowledges that he or she will be responsible for paying and reporting any income tax due on this additional benefit directly to HMRC under the self-assessment regime and for paying the Company or the Employer, as applicable, for the value of any employee NIC due on this additional benefit, which the Company or the Employer may recover from the Grantee by any of the means referred to in the “Taxes” section of Part A of this Exhibit B.
431 Election. It shall be a term of this Award that the Grantee shall jointly with the Employer enter into the joint election within Section 431 of the U.K. Income Tax (Earnings and Pensions) Act 2003 (“ITEPA 2003”) attached immediately below (the “431 Election”) at the time of acceptance of the terms of the RSU Terms and Conditions, or at such subsequent time as may be requested by the Company, in respect of computing any tax charge on the acquisition of "Restricted Securities” (as defined in Sections 423 and 424 of ITEPA 2003), and that the Grantee will not revoke any such election at any time. This election will be to treat the Shares the Grantee acquires on the settlement date as if they were not Restricted Securities (for U.K. tax purposes only). If the Grantee does not enter into the 431 Election in accordance with these instructions, the Company may, in its sole discretion, refuse to issue Shares at settlement of the Units.
IMPORTANT NOTE: By accepting the Units via the Company’s acceptance procedure or by separately signing the 431 Election (whether in hard copy or electronically), the Grantee agrees to be bound by the terms of the 431 Election. The Grantee should read the terms of the 431 Election carefully before accepting the RSU Terms and Conditions and the 431 Election. If requested by the Company, the Grantee agrees to execute the 431 Election in hard copy even if the Grantee has accepted the RSU Terms and Conditions through the Company’s electronic acceptance procedure.
By entering into the 431 Election, the Grantee agrees that he or she will be subject to income tax and, where applicable, National Insurance contributions based on the full unrestricted market value of the Shares that he or she acquires pursuant to the settlement of the Units. The Grantee should print and keep copies of the 431 Election for the Grantee’s records.
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UNITED KINGDOM
THE CLOROX COMPANY - 2005 STOCK INCENTIVE PLAN
Joint Election under section 431(1) of the Income Tax (Earnings and Pensions) Act 2003 for full disapplication of Chapter 2 of the Income Tax (Earnings and Pensions) Act 2003
1.Between
The Employee who has obtained authorized access to this joint election under section 431(1) Income Tax (Earnings and Pensions) Act 2003 and
the Company (who is the Employee’s employer) CBee (Europe) Limited
of Company Registration Number 06062933
2.Purpose of Election
This joint election is made pursuant to section 431(1) Income Tax (Earnings and Pensions) Act 2003 (ITEPA) and applies where employment-related securities, which are restricted securities by reason of section 423 ITEPA, are acquired.
The effect of an election under section 431(1) is that, for the relevant Income Tax and NIC purposes, the employment-related securities and their market value will be treated as if they were not restricted securities and that sections 425 to 430 ITEPA do not apply. Additional Income Tax will be payable (with PAYE and NIC where the securities are Readily Convertible Assets).
| Should the value of the securities fall following the acquisition, it is possible that Income Tax/NIC that would have arisen because of any future chargeable event (in the absence of an election) would have been less than the Income Tax/NIC due by reason of this election. Should this be the case, there is no Income Tax/NIC relief available under Part 7 of ITEPA 2003; nor is it available if the securities acquired are subsequently transferred, forfeited or revert to the original owner. | ||||||||||||||
3.Application
This joint election is made not later than 14 days after the date of acquisition of the securities by the Employee and applies to:
Number of securities All securities
Description of securities Common Stock
Name of issuer of securities The Clorox Company
to be acquired by the Employee after the date of this election under the terms of The Clorox Company 2005 Stock Incentive Plan.
4.Extent of Application
This election under section 431(1) ITEPA disapplies all restrictions attaching to the securities.
5.Declaration
This election will become irrevocable upon the later of its signing or the acquisition and each subsequent acquisition of employment-related securities to which this election applies.
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The Employee acknowledges that, by signing or electronically accepting this election, the Employee agrees to be bound by the terms of this election.
……………………………………….. …./…./……….
Signature (Employee) Date
The Company acknowledges that, by signing or electronically accepting this election or arranging for the scanned signature of an authorised representative to appear on this election, the Company agrees to be bound by the terms of this election.
………………………………………. …./…../………
Signature (for and on behalf of the Company) Date
………………………….………………
Position in company
Note: Where the election is in respect of multiple acquisitions, prior to the date of any subsequent acquisition of a security it may be revoked by agreement between the employee and employer in respect of that and any later acquisition.
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THE CLOROX COMPANY
2005 STOCK INCENTIVE PLAN
PERFORMANCE SHARE UNIT AWARD TERMS AND CONDITIONS
NOTICE OF PERFORMANCE SHARE UNIT AWARD
The Clorox Company, a Delaware company (the “Company”), grants to you (the “Grantee”), in accordance with the terms of The Clorox Company 2005 Stock Incentive Plan (the “Plan”) and these Performance Share Unit Award Terms and Conditions (the “PSU Terms and Conditions”), the number of Performance Share Units set forth on Exhibit A to these PSU Terms and Conditions on the terms set forth below.
PERFORMANCE SHARE UNIT AWARD TERMS AND CONDITIONS
1. Grant of Performance Share Units. The Company hereby grants to the Grantee the Target Performance Share Units Granted set forth in Exhibit A, payment of which is dependent upon the achievement of certain performance goals more fully described in Exhibit A. This Award is subject to the terms, definitions and provisions of the Plan and these PSU Terms and Conditions, including any additional or different terms and conditions for the Grantee's country set forth in Exhibit B to these PSU Terms and Conditions. All terms, provisions, and conditions applicable to the Performance Share Units set forth in the Plan and not set forth herein are incorporated by reference. To the extent any provision hereof is inconsistent with a provision of the Plan, the provisions of the Plan will govern. All capitalized terms that are used in these PSU Terms and Conditions and not otherwise defined herein shall have the meanings ascribed to them in the Plan.
2. Nature and Settlement of Award. The Performance Share Units granted pursuant to these PSU Terms and Conditions represent the opportunity to receive Shares of the Company and Dividend Equivalents on such Shares (as described in Section 4 below). The Company shall issue to the Grantee one Share for each vested Performance Share Unit (plus any Dividend Equivalents accrued with respect to such vested Performance Share Units), rounded to the nearest whole Share, less any Shares withheld in accordance with the provisions of Section 7 of these PSU Terms and Conditions. Settlement shall occur on a date chosen by the Committee, which date shall be within one hundred and twenty (120) days following the last day of the Performance Period (the “Settlement Date”), or any Deferred Settlement Date established pursuant to Section 6 of these PSU Terms and Conditions, whichever is later, and except as specifically provided in Section 5 of these PSU Terms and Conditions, provided the Grantee has remained in the employment or service of the Company or its Subsidiaries through the Settlement Date; provided, that, in connection with a Change in Control as described in Section 8 of these PSU Terms and Conditions, the Settlement Date shall be within sixty (60) days of either the Change in Control or the date of termination of employment without Cause or for “Good Reason” (as defined below), as applicable. Although vested within the meaning of Section 83 of the Internal Revenue Code since no substantial risk of forfeiture exists at the Settlement Date, the Performance Share Units (and any associated Dividend Equivalents) will not be earned until the Grantee has fulfilled all of the conditions precedent set forth in these PSU Terms and Conditions, including, but not limited to, the obligations set forth in Sections 10(b), 10(c), 10(d), 10(e) and Section 11, and the Grantee shall have no right to retain the Shares or the value thereof upon vesting or settlement of the Performance Share Units until all such conditions precedent have been satisfied.
3. Determination of Number of Performance Share Units Vested. The number of Performance Share Units vested, if any, for the Performance Period shall be determined in accordance with the formula set forth on Exhibit A.
4. Dividend Equivalent Rights. No Dividend Equivalents shall be paid to the Grantee prior to the settlement of the award. Rather, such Dividend Equivalent payments will accrue and be notionally credited to the Grantee’s Performance Share Units account and paid out at the Average Payout Percentage in the form of additional Shares rounded down to the nearest whole Share (the “Dividend Equivalent Shares”) upon settlement of the award, as described in Section 2 above.
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5. Termination of Continuous Service. Except as otherwise provided in this Section 5 or Section 8, if the Grantee’s employment or service with the Company and its Subsidiaries is terminated for any reason prior to the Settlement Date, all Performance Share Units and Dividend Equivalents subject to these PSU Terms and Conditions shall be immediately forfeited.
a. Termination due to Death or Disability. If the Grantee’s termination of employment or service is due to death or Disability, all Performance Share Units and Dividend Equivalents shall immediately vest and will be paid after completion of the Performance Period, at the same time Performance Share Units and Dividend Equivalents are paid to active employees, based on the level of performance achieved as of the end of such Performance Period.
b. Termination due to Retirement. [If the Grantee’s termination of employment or service is due to Retirement, the Performance Share Units shall vest on a pro rata monthly basis, including full credit for partial months elapsed and rounded to the nearest whole Share, and will be paid after completion of the Performance Period, at the same time Performance Share Units and Dividend Equivalents are paid to active employees, based on the level of performance achieved as of the end of such Performance Period; provided, however, that this provision shall not apply in the event the Grantee’s employment or service is terminated for Cause. The amount of the vested Award shall be computed under the following formula: Target Performance Share Units Granted times (number of full months elapsed in Performance Period (i.e., rounding up for any partial month) divided by number of full months in Performance Period) times percent performance level achieved as of the end of the Performance Period. Dividend Equivalents accrued through the Grantee’s date of termination due to Retirement shall be paid at the same time as the settlement of the vested Performance Share Units.][1] [ If the Grantee’s termination of employment or service is due to Retirement and occurs more than 6 months after the Grant Date set forth on Exhibit A, then the Performance Share Units shall remain outstanding through the end of the Performance Period and vest based on the level of performance achieved as of the end of the Performance Period, and will be paid after completion of the Performance Period, at the same time Performance Share Units and Dividend Equivalents are paid to active employees, as if the Grantee had remained in the employment or service of the Company or its Subsidiaries through the Settlement Date; provided, however, that this provision shall not apply in the event the Grantee’s employment or service is terminated for Cause.][2]
Definition of “Retirement.” For purposes of these PSU Terms and Conditions, the term “Retirement” shall mean termination of employment or service as an Employee after (1) twenty (20) or more years of “vesting service,” which solely for purposes of these PSU Terms and Conditions, shall be calculated under Article III of The Clorox Company 401(k) Plan (the “401(k) Plan”) entitled “Service” along with any other relevant provisions of the 401(k) Plan necessary or desirable to give full effect thereto, or any successor provisions, regardless of the status of the Grantee with respect to the 401(k) Plan (“Vesting Service”), or (2) attaining age fifty-five with ten (10) or more years of Vesting Service.
c. Definition of “Disability.” For purposes of these PSU Terms and Conditions, the Grantee’s employment shall be deemed to have terminated due to the Grantee’s Disability if the Grantee is entitled to long-term disability benefits under the Company’s long-term disability plan or policy, as in effect on the date of termination of the Grantee’s employment.
6. Election to Defer Settlement.
a. Prior to the commencement of the last year of the Performance Period, the Grantee may elect to defer the settlement of the Performance Share Units from the last day of the Performance Period until a date at least two years following such date, or until the Grantee’s later termination of employment or service. In the event the termination of employment or service constitutes a “separation from service” (as defined in Section 1.409A-1(h) of the Treasury Department Regulations and including a termination of employment or service on account of Disability that does not
—––––––––––––––––––––––
1 To be included in agreements for individuals who are not CEC members.
2 To be included in agreements for individuals who are CEC members.
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satisfy the definition of “disability” under Section 409A-3(i)(4) of the Treasury Department Regulations), the
settlement of the Performance Share Units shall occur no earlier than the earlier of the date which is six (6) months
after the date of the Grantee’s termination of employment or service or the date of death of the Grantee. The date on which the Performance Share Units are settled following a deferral election made in accordance with this Section 6(a) shall be referred to as the “Deferred Settlement Date”.
b. If the Grantee makes such an election, it will become irrevocable on the date of such election. If the Grantee makes such an election, any Dividend Equivalents granted with respect to such deferred Performance Share Units shall also be deferred under the same terms. If the Grantee makes such an election, but a transaction occurs that subjects the Grantee’s Performance Share Units to Section 19 of the Plan prior to the Deferred Settlement Date, the Grantee’s deferral election will terminate and the Grantee’s Performance Share Units and Dividend Equivalents will be settled as of the date of that transaction. The Company may terminate any deferral hereunder if a change in law requires such termination.
7. Taxes. Pursuant to Section 16 of the Plan, the Committee shall have the power and the right to deduct or withhold, or require the Grantee to remit to the Company, an amount sufficient to satisfy any applicable tax withholding requirements applicable to this Award. The Committee may condition the issuance of Shares upon the Grantee’s satisfaction of such withholding obligations. The Grantee may elect to satisfy all or part of such withholding requirement by tendering previously-owned Shares or by having the Company withhold Shares having a Fair Market Value equal to the minimum statutory withholding rate that could be imposed on the transaction (or such other rate that will not result in a negative accounting impact) or in such other manner as is acceptable to the Company. Such election shall be irrevocable, made in writing, signed by the Grantee, and shall be subject to any restriction or limitations that the Committee, in its sole discretion, deems appropriate.
8. Change in Control. Upon the occurrence of a Change in Control, including in the event of the termination of the Grantee by the Company without Cause or the resignation of the Grantee for Good Reason within twenty-four (24) months following consummation of a Change in Control, the Performance Share Units shall be treated in accordance with Section 19 of the Plan.
For purposes of these PSU Terms and Conditions, “Good Reason” shall mean the occurrence of any of the following with respect to the Grantee:
(a) the assignment to the Grantee of any duties inconsistent in any material respect with the Grantee’s position (including offices and reporting requirements), authority, duties or responsibilities, as in effect immediately prior to the occurrence of the Change in Control or the date of the Grantee’s termination of employment, whichever is greater, or any other action by the Company which results in a material diminution in such position, authority, duties or responsibilities, excluding for this purpose an isolated, insubstantial and inadvertent action not taken in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Grantee;
(b) any failure by the Company to substantially comply with, or any reduction by the Company in, any of the material provisions of the Grantee’s compensation plans, programs, agreements or arrangements as in effect immediately prior to the Change in Control, including, without limitation, any material reduction in base salary, cash incentive compensation target bonus opportunity, equity compensation opportunity in the aggregate, or employee benefits and perquisites in the aggregate, other than an isolated, insubstantial and inadvertent failure or reduction not occurring in bad faith and which is remedied by the Company promptly after receipt of notice thereof given by the Grantee;
(c) the Company’s requiring the Grantee to be based at any office or location other than that in effect immediately prior to the Change in Control or any office or location not requiring the Grantee’s commute to increase by more than 35 miles from his or her commute immediately prior to the Change in Control;
(d) any purported termination by the Company of the Grantee’s employment other than (A) due to the death or Disability of the Grantee or (B) a termination of the Grantee’s employment by the Company for Cause; or
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(e) any material failure by the Company to require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company to assume the obligations of the Company under these PSU Terms and Conditions in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.
Any termination by the Grantee for Good Reason shall be communicated by a written notice to the Company within a period not to exceed ninety (90) days of such Grantee’s knowledge of the condition. Such written notice (1) must indicate the specific termination provision in the Good Reason definition relied upon, (2) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Grantee’s employment under the provision so indicated and (3) the Grantee's intended date of termination if the Company does not cure the issue (which date shall be not less than thirty (30) days after the giving of such notice). After receipt by the Company of such written notice, the Company shall have thirty (30) days during which it may remedy the condition and thereby cure the event or circumstance constituting “Good Reason.”
9. Transferability of Performance Share Units. Performance Share Units are subject to the transfer restrictions set forth in Section 15 of the Plan. For avoidance of doubt, Shares issued to the Grantee in settlement of Performance Share Units pursuant to Section 2 of these PSU Terms and Conditions shall not be subject to any of such transferability restrictions.
10. Protection of Trade Secrets and Limitations on Retention.
a. Definitions.
i. “Affiliated Company” means any organization controlling, controlled by or under common control with the Company.
ii. “Confidential Information” means the Company’s technical or business or personnel information not readily available to the public or generally known in the trade, including inventions, developments, trade secrets and other confidential information, knowledge, data and know-how of the Company or any Affiliated Company, whether or not they originated with the Grantee, or information which the Company or any Affiliated Company received from third parties under an obligation of confidentiality.
iii. “Conflicting Product” means any product, process, machine, or service of any person or organization, other than the Company or any Affiliated Company, in existence or under development that (1) resembles or competes with a product, process, machine, or service upon or with which the Grantee shall have worked during the two years prior to the Grantee’s termination of employment with the Company or any Affiliated Company or (2) with respect to which during that period of time the Grantee, as a result of his/her job performance and duties, shall have acquired knowledge of Confidential Information, and whose use or marketability could be enhanced by application to it of Confidential Information. For purposes of this section, it shall be conclusively presumed that the Grantee has knowledge of information to which s/he has been directly exposed through actual receipt or review of memorandum or documents containing such information or through actual attendance at meetings at which such information was discussed or disclosed.
iv. “Conflicting Organization” means any person or organization that is engaged in or about to become engaged in research on or development, production, marketing or selling of a Conflicting Product.
b. Right to Retain Shares Contingent on Protection of Confidential Information. In partial consideration for the grant of these Performance Share Units, the Grantee agrees that at all times, both during and after the term of the Grantee’s employment with the Company or any Affiliated Company, to hold in the strictest confidence, and not to use (except for the benefit of the Company at the Company’s direction) or disclose (except for the benefit of the Company at the Company’s direction), regardless of when disclosed to the Grantee, any and all Confidential Information of the Company or any Affiliated Company. The Grantee understands that for purposes of this Section 10(b), Confidential Information further includes, but is not limited to, information pertaining to any aspect of the business of the Company or any Affiliated Company which is either information not known (or known as a result of
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a wrongful act of the Grantee or of others who were under confidentiality obligations as to the item or items involved) by actual or potential competitors of the Company or other third parties not under confidentiality obligations to the Company. If, prior to the expiration of the Performance Period or at any time within one (1) year after the Settlement Date, the Grantee discloses or uses, or threatens to disclose or use, any Confidential Information other than in the course of performing authorized services for the Company (or any Affiliated Company), up to all of the Performance Share Units, whether vested or not, will be immediately forfeited and cancelled, and the Grantee shall immediately return to the Company the Shares or the pre-tax income derived from any disposition of the Shares.
c. No Interference with Customers or Suppliers. In partial consideration for the grant of these Performance Share Units, in order to forestall the disclosure or use of Confidential Information as well as to deter the Grantee’s intentional interference with the contractual relations of the Company or any Affiliated Company, the Grantee’s intentional interference with prospective economic advantage of the Company or any Affiliated Company and to promote fair competition, the Grantee agrees by accepting the grant of these Performance Share Units that the Grantee’s right to the Shares upon settlement of the Performance Share Units is contingent upon the Grantee refraining, during the Performance Period and for a period of one (1) year after the Settlement Date of the Performance Share Units, for himself/herself or any third party, directly or indirectly, from using Confidential Information to (1) divert or attempt to divert from the Company (or any Affiliated Company) any business of any kind in which it is engaged, or (2) intentionally solicit its customers with which it has a contractual relationship as to Conflicting Products, or to interfere with the contractual relationship with any of its suppliers or customers (collectively, “Interfere”). If, during the term of the Performance Period or at any time within one (1) year after the Settlement Date, the Grantee breaches his/her obligation not to Interfere, the Grantee’s right to the Shares upon settlement of the Performance Share Units shall not have been earned and up to all of the Performance Share Units, whether vested or not, will be immediately cancelled, and the Grantee shall immediately return to the Company the Shares or the pre-tax income derived from any disposition of the Shares. For avoidance of doubt, the term “Interfere” shall not include any advertisement of Conflicting Products through the use of media intended to reach a broad public audience (such as television, cable or radio broadcasts, generalized online marketing, or newspapers or magazines) or the broad distribution of coupons through the use of direct mail or through independent retail outlets. THE GRANTEE UNDERSTANDS AND ACKNOWLEDGES BY ACCEPTING THE GRANT OF THESE PERFORMANCE SHARE UNITS THAT THIS PARAGRAPH IS NOT INTENDED TO AND DOES NOT PROHIBIT THE CONDUCT DESCRIBED, BUT PROVIDES FOR THE CANCELLATION OF THE PERFORMANCE SHARE UNITS AND A RETURN TO THE COMPANY OF THE SHARES OR THE GROSS TAXABLE PROCEEDS OF THE SHARES IF THE GRANTEE SHOULD CHOOSE TO VIOLATE THIS “NO INTERFERENCE WITH CUSTOMERS OR SUPPLIERS” PROVISION DURING THE TERM OF THE PERFORMANCE PERIOD OR WITHIN ONE (1) YEAR AFTER THE SETTLEMENT DATE.
d. No Solicitation of Employees. In partial consideration for the grant of these Performance Share Units, in order to forestall the disclosure or use of Confidential Information, as well as to deter the Grantee’s intentional interference with the contractual relations of the Company or any Affiliated Company, the Grantee’s intentional interference with prospective economic advantage of the Company or any Affiliated Company, and to promote fair competition, the Grantee agrees by accepting the grant of these Performance Share Units that the Grantee’s right to the Shares upon settlement of the Performance Share Units is contingent upon the Grantee refraining, during the Performance Period and for a period of one (1) year after the Settlement Date, for himself/herself or any third party, directly or indirectly, from soliciting for employment any person employed by the Company, or by any Affiliated Company, during the period of the solicited person’s employment and for a period of one (1) year after the termination of the solicited person’s employment with the Company or any Affiliated Company (collectively “Solicit”). If, during the term of the Performance Period or at any time within one (1) year after the Settlement Date, the Grantee breaches his/her obligation not to Solicit, the Grantee’s right to the Shares upon settlement of the Performance Share Units shall not have been earned and up to all of the Performance Share Units, whether vested or not, will be immediately cancelled, and the Grantee shall immediately return to the Company the Shares or the pre-tax income derived from any disposition of the Shares. THE GRANTEE UNDERSTANDS AND ACKNOWLEDGES BY ACCEPTING THE GRANT OF THESE PERFORMANCE SHARE UNITS THAT THIS PARAGRAPH IS NOT INTENDED TO AND DOES NOT PROHIBIT THE CONDUCT DESCRIBED, BUT PROVIDES FOR THE CANCELLATION OF THE PERFORMANCE SHARE UNITS AND A RETURN TO THE COMPANY OF THE
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SHARES OR THE GROSS TAXABLE PROCEEDS OF THE SHARES IF THE GRANTEE SHOULD CHOOSE TO VIOLATE THIS NON-SOLICITATION OF EMPLOYEES PROVISION DURING THE TERM OF THE PERFORMANCE PERIOD OR WITHIN ONE (1) YEAR AFTER THE SETTLEMENT DATE.
e. Injunctive and Other Available Relief. By acceptance of the grant of these Performance Share Units, the Grantee acknowledges that, if the Grantee were to breach or threaten to breach his/her obligation hereunder not to Interfere or Solicit or not to disclose or use any Confidential Information other than in the course of performing authorized services for the Company (or any Affiliated Company), the harm caused to the Company by such breach or threatened breach would be, by its nature, irreparable because, among other things, damages would be significant and the monetary harm that would ensue would not be able to be readily proven, and that the Company would be entitled to injunctive and other appropriate relief to prevent threatened or continued breach and to such other remedies as may be available at law or in equity. To the extent not prohibited by law, any cancellation of the Performance Share Units pursuant to any of Sections 10(b) through 10(d) above shall not restrict, abridge or otherwise limit in any fashion the types and scope of injunctive and other available relief to the Company. Notwithstanding any provision of these PSU Terms and Conditions to the contrary, nothing under these PSU Terms and Conditions shall limit, abridge, modify or otherwise restrict the Company (or any Affiliated Company) from pursuing any or all legal, equitable or other appropriate remedies to which the Company may be entitled under any other agreement with the Grantee, any other plan, program, policy or arrangement of the Company (or any Affiliated Company) under which the Grantee is covered or participates, or any applicable law, all to the fullest extent not prohibited under applicable law.
f. Permitted Reporting and Disclosure. Notwithstanding any language in these PSU Terms and Conditions to the contrary, nothing in these PSU Terms and Conditions prohibits Grantee from reporting possible violations of federal law or regulation to any governmental agency or governmental entity, or making other disclosures that are protected under federal law or regulation; provided, that, in each case such communications and disclosures are consistent with applicable law. Notwithstanding the foregoing, under no circumstance is Grantee authorized to disclose any information covered by the Company’s attorney-client privilege or attorney work product or the Company’s trade secrets without prior written consent of the Company’s Chief Legal Officer. Any reporting or disclosure permitted under this Section 10(f) shall not result in the cancellation of Performance Share Units. Grantee is entitled to certain immunities from liability under state and federal law for disclosing trade secrets if the disclosure was made to report or investigate an alleged violation of law, subject to certain conditions. Please see the Company’s Confidential Information Policy for further details.
11. Right to Retain Shares Contingent on Continuing Non-Conflicting Employment. In partial consideration for the grant of these Performance Share Units, in order to forestall the disclosure or use of Confidential Information, as well as to deter the Grantee’s intentional interference with the contractual relations of the Company or any Affiliated Company, the Grantee’s intentional interference with prospective economic advantage of the Company or any Affiliated Company, and to promote fair competition, the Grantee agrees by accepting the grant of these Performance Share Units that the Grantee’s right to the Shares upon settlement of the Performance Share Units is contingent upon the Grantee refraining, during the term of the Performance Period and for a period of one (1) year after the Settlement Date, from rendering services, directly or indirectly, as director, officer, employee, agent, consultant or otherwise, to any Conflicting Organization except a Conflicting Organization whose business is diversified and that, as to that part of its business to which the Grantee renders services, is not a Conflicting Organization, provided that the Company shall receive separate written assurances satisfactory to the Company from the Grantee and the Conflicting Organization that the Grantee shall not render services during such period with respect to a Conflicting Product. If, prior to the expiration of the Performance Period or at any time within one (1) year after the Settlement Date, the Grantee shall render services to any Conflicting Organization other than as expressly permitted herein, the Grantee’s right to the Shares upon settlement of the Performance Share Units shall not have been earned and the Performance Share Units, whether vested or not, will be immediately cancelled, and the Grantee shall immediately return to the Company the Shares or the pre-tax income derived from any disposition of the Shares. THE GRANTEE UNDERSTANDS AND ACKNOWLEDGES BY ACCEPTING THE GRANT OF THESE PERFORMANCE SHARE UNITS THAT THIS PARAGRAPH IS NOT INTENDED TO AND DOES NOT PROHIBIT THE GRANTEE FROM RENDERING SERVICES TO A CONFLICTING ORGANIZATION, BUT PROVIDES FOR THE CANCELLATION OF THE PERFORMANCE SHARE UNITS AND A RETURN TO
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THE COMPANY OF THE SHARES OR THE GROSS TAXABLE PROCEEDS OF THE SHARES IF THE GRANTEE SHOULD CHOOSE TO RENDER SUCH SERVICES DURING THE TERM OF THE PERFORMANCE PERIOD OR WITHIN ONE (1) YEAR AFTER THE SETTLEMENT DATE.
12. Data Privacy. By accepting the grant of these Performance Share Units, the Grantee explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of the Grantee’s personal data as described in these PSU Terms and Conditions and any other award materials by and among the entities in the Company for the purpose of implementing, administering and managing the Grantee’s participation in the Plan. The Grantee understands that the Company may hold certain personal information about the Grantee, including, but not limited to, the Grantee’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares or directorships held in the Company, details of all awards, or any other entitlement to shares granted, canceled, exercised, vested, unvested or outstanding in the Grantee’s favor (“Data”), for the purpose of implementing, administering and managing the Plan. The Grantee understands that Data will be transferred to such Plan service provider as may be selected by the Company, presently or in the future, which may be assisting the Company with the implementation, administration and management of the Plan. The Grantee understands that the recipients of the Data may be located in the United States or elsewhere, and that the recipient’s country (e.g., the United States) may have different data privacy laws and protections than the Grantee’s country. By accepting the grant of these Performance Share Units, the Grantee authorizes the Company, the Plan service provider as may be selected by the Company, and any other possible recipients which may assist the Company, presently or in the future, with implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the purposes of implementing, administering and managing the Grantee’s participation in the Plan. Further, the Grantee understands that, by accepting the grant of these Performance Share Units, he or she is providing the consents herein on a purely voluntary basis. If the Grantee does not consent, or if the Grantee later seeks to revoke the Grantee’s consent, or instructs the Company to cease processing of the Data, the Grantee’s continuous service status will not be adversely affected; the only adverse consequence of refusing or withdrawing the Grantee’s consent, or instructing the Company to cease processing, is that the Company would not be able to grant the Grantee the Shares, this Award or any other awards or administer or maintain such awards. Therefore, the Grantee understands that refusing or withdrawing the Grantee’s consent may affect the Grantee’s ability to participate in the Plan. For more information on the consequences of the Grantee’s refusal to consent or withdrawal of consent, the Grantee understands that he or she may contact the Grantee’s local human resources representative.
13. Repayment Obligations. Awards under the Plan, including this Award and any outstanding Award granted prior to the date hereof, are subject to clawback in accordance with the terms of the Company’s Policy Regarding Clawback of Incentive Compensation, as amended from time to time, and pursuant to any other policy the Company may adopt from time to time as required by applicable law (collectively, the “Clawback Policy”), which Clawback Policy shall apply and be deemed incorporated herein to the extent applicable. To the extent that any portion of the Clawback Policy relating to recoupment in connection with a restatement of financial results to correct a material error is not applicable to the Award, and in the event that (1) the Company issues a restatement of financial results to correct a material error and (2) the Committee determines, in good faith, that the Grantee’s fraud or willful misconduct was a significant contributing factor to the need to issue such restatement and (3) some or all of the Performance Share Units that were granted and/or vested prior to such restatement would not have been granted and/or vested, as applicable, based upon the restated financial results, the Grantee shall immediately return to the Company the Performance Share Units or any Shares or the pre-tax income derived from any disposition of the Shares previously received in settlement of the Performance Share Units that would not have been granted and/or vested based upon the restated financial results (the “Repayment Obligation”). The Company shall be able to enforce the Repayment Obligation by all legal means available, including, without limitation, by withholding such amount from other sums owed by the Company to the Grantee. No recovery of any Award pursuant to the Clawback Policy or the Repayment Obligation shall be treated as an event giving rise to a Participant’s right to terminate employment for “good reason” or “constructive termination” (or any similar term) under any agreement with the Company. The Company’s rights contemplated in this Section 13 and/or pursuant to any recoupment or clawback policy (including the Clawback Policy and the Repayment Obligation) are not exclusive, and therefore the
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availability of such remedies are without prejudice to any and all other remedies available to the Company pursuant to applicable law or under any other contract or agreement.
14. Authorization to Return Forfeited Performance Share Units. By accepting the grant of these Performance Share Units, the Grantee authorizes the Company or its designee to return to the Company all Performance Share Units and related Dividend Equivalents and Shares subject thereto which are forfeited along with any cash or other property held with respect to or in substitution of such Performance Share Units, related Dividend Equivalents and/or Shares. Any such action shall comply with all applicable provisions of these PSU Terms and Conditions or the Plan.
15. Miscellaneous Provisions.
a. Rights as a Stockholder. Neither the Grantee nor the Grantee’s transferee or representative shall have any rights as a stockholder with respect to any Shares subject to this Award until the Performance Share Units have been settled and Share certificates have been issued to the Grantee, transferee or representative, as the case may be.
b. Choice of Law, Exclusive Jurisdiction and Venue. These PSU Terms and Conditions shall be governed by, and construed in accordance with, the laws of the State of Delaware, excluding any conflicts or choice of law rule or principle that might otherwise refer construction or interpretation of these PSU Terms and Conditions to the substantive law of another jurisdiction. The courts of the State of Delaware shall have exclusive jurisdiction over any disputes or other proceedings relating to these PSU Terms and Conditions, and venue shall reside with the courts in New Castle County, Delaware, including if jurisdiction shall so permit, the U.S. District Court for the District of Delaware. Accordingly, by accepting the grant of these Performance Share Units, the Grantee agrees that any claim of any type relating to these PSU Terms and Conditions or the grant of these Performance Share Units must be brought and maintained in the appropriate court located in New Castle County, Delaware, including if jurisdiction will so permit, in the U.S. District Court for the State of Delaware. By accepting the grant of these Performance Share Units, the Grantee consents to the jurisdiction over the Grantee of any such courts and waives all objections based on venue or inconvenient forum.
c. Modification or Amendment. These PSU Terms and Conditions may be modified or amended by the Board or the Committee at any time; provided, however, no modification or amendment to these PSU Terms and Conditions shall be made which would materially and adversely affect the rights of the Grantee, without such Grantee’s written consent.
d. Severability. In the event any provision of these PSU Terms and Conditions shall be held illegal or invalid for any reason, the illegality or invalidity shall not affect the remaining provisions of these PSU Terms and Conditions, and these PSU Terms and Conditions shall be construed and enforced to reflect the intent of the parties to the fullest extent not prohibited by law, and in the event that such provision is not able to be so construed and enforced, then these PSU Terms and Conditions shall be construed and enforced as if such illegal or invalid provision had not been included. In amplification of the preceding sentence, in the event that the time period or scope of any provision is declared by a court or arbitrator of competent jurisdiction to exceed the maximum time period or scope that such court or arbitrator deems enforceable, then such court or arbitrator shall have the power to reduce the time period or scope to the maximum time period or scope permitted by law.
e. References to Plan. All references to the Plan shall be deemed references to the Plan as may be amended.
f. Headings. The captions used in these PSU Terms and Conditions are inserted for convenience and shall not be deemed a part of these PSU Terms and Conditions for construction or interpretation.
g. Interpretation. Any dispute regarding the interpretation of these PSU Terms and Conditions shall be submitted by the Grantee or by the Company forthwith to the Board or the Committee, which shall review such dispute at its next regular meeting. The resolution of such dispute by the Board or the Committee shall be final and binding on all persons. It is the intention of the Company and the Grantee to make the promises contained in these PSU Terms and Conditions reasonable and binding only to the extent that they may be lawfully done under existing applicable laws.
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These PSU Terms and Conditions and the Plan constitute the entire and exclusive terms and conditions applicable to this grant of Performance Share Units, and supersede all prior agreements or understandings, whether written or oral, with respect to the grant of Performance Share Units set forth in these PSU Terms and Conditions.
h. Section 409A Compliance. These PSU Terms and Conditions are subject to Section 25(f) of the Plan.
Notwithstanding any provision of the Plan to the contrary, if the Grantee is a “specified employee” (as defined in Section 1.409A-1(i) of the Treasury Department Regulations) at the time of the Grantee’s “separation from service” (as defined in Section 1.409A-1(h) of the Treasury Department Regulations and including a termination of employment or service on account of Disability that does not satisfy the definition of “disability” under Section 409A-3(i)(4) of the Treasury Department Regulations), and payments to the Grantee hereunder are not exempt from Section 409A as a short-term deferral or otherwise, these payments, to the extent otherwise payable within six (6) months after the Grantee’s separation from service shall be delayed until the earlier of the date which is six (6) months after the date of the Grantee’s separation from service or the date of death of the Grantee. Any payments that were scheduled to be paid during the six (6) month period following the Grantee’s separation from service, but which were delayed pursuant to this Section 15(h), shall be paid without interest on, or as soon as administratively practicable after, the first day following the six (6) month anniversary of the Grantee’s separation from service (or, if earlier, the date of the Grantee’s death). Any payments that were originally scheduled to be paid following the six (6) months after the Grantee’s separation from service shall continue to be paid in accordance with their predetermined schedule.
i. Agreement with Terms. Receipt of any benefits under these PSU Terms and Conditions by the Grantee shall constitute the Grantee’s acceptance of and agreement with all of the provisions of these PSU Terms and Conditions and of the Plan that are applicable to these PSU Terms and Conditions, and the Company shall administer these PSU Terms and Conditions accordingly.
16. Country-Specific Provisions. This Award shall be subject to any additional or different terms and conditions set forth in Exhibit B. Moreover, if the Grantee relocates to one of the countries included in Exhibit B, the additional or different terms and conditions for such country will apply to the Grantee, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons. Exhibit B constitutes part of these PSU Terms and Conditions.
BY ACCEPTING THE GRANT OF THESE PERFORMANCE SHARE UNITS, THE GRANTEE ACKNOWLEDGES, AGREES AND CONSENTS TO THE FOLLOWING PROVISIONS:
THE GRANTEE ACKNOWLEDGES AND AGREES THAT GRANTEE’S RIGHT TO THE SHARES PURSUANT TO THESE PSU TERMS AND CONDITIONS IS ACCEPTED AND EARNED ONLY BY CONTINUING EMPLOYMENT (FOR PURPOSES OF THIS PARAGRAPH, IGNORING ANY ELECTION TO DEFER SETTLEMENT PURSUANT TO SECTION 6) AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS AWARD OR ACQUIRING SHARES HEREUNDER) AND BY ACHIEVEMENT OF THE PERFORMANCE CRITERIA AND BY COMPLIANCE WITH THE GRANTEE’S VARIOUS OBLIGATIONS UNDER THESE PSU TERMS AND CONDITIONS. THE GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS THESE PSU TERMS AND CONDITIONS, NOR IN THE PLAN, SHALL CONFER UPON THE GRANTEE ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE THE GRANTEE’S EMPLOYMENT AT ANY TIME, FOR ANY REASON OR NO REASON, WITH OR WITHOUT CAUSE, AND WITH OR WITHOUT ADVANCE NOTICE EXCEPT AS MAY BE REQUIRED BY APPLICABLE LAW.
The Grantee acknowledges that a copy of the Plan and Plan Information are available for viewing on the Company’s internal HR website at https://team.clorox.com/sites/ClxWeb/hr/SitePages/Stock-Incentive-Plan.aspx, and the Company’s Annual Report and Proxy Statement (the “Prospectus Information”) are available for viewing on the Company’s website at https://investors.thecloroxcompany.com/investors/financial-information/sec-filings/default.aspx. The Grantee consents to receive the Prospectus Information electronically or, in the alternative, to contact People@Clorox.com to request a paper copy of the Prospectus Information. The Grantee represents that s/he
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is familiar with the terms and provisions thereof, and accepts these PSU Terms and Conditions subject to all of the terms and provisions thereof. The Grantee has reviewed the Plan and these PSU Terms and Conditions in their entirety, has had an opportunity to obtain the advice of counsel prior to accepting the grant of these Performance Share Units and fully understands all provisions of these PSU Terms and Conditions. The Grantee acknowledges and agrees to accept as binding, conclusive and final all decisions or interpretations of the Committee upon any questions arising under the Plan or these PSU Terms and Conditions. The Grantee further agrees to notify the Company upon any change in the residence address on file with the Company.
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EXHIBIT A
| Grantee | [Participant Name] | ||||
| Target Performance Share Units Granted | [Target PSUs Granted] | ||||
| Award ID | [Award ID] | ||||
| Grant Date | [Grant Date] | ||||
| Performance Period | July 1, 2026 through June 30, 2029 | ||||
| Settlement Date | Within 120 days following the last day of the Performance Period, or such later date in the event of a deferral per the terms of the PSU Terms and Conditions, provided the Grantee has remained in the employment or service of the Company or its Subsidiaries through such date (except for a termination of employment or service due to death, Disability or Retirement, as provided in Section 5 above). | ||||
Determination of Number of Performance Share Units Vested for the Performance Period
# of Performance Share Units Vested = Average Payout Percentage x Target Performance Share Units Granted
The “Average Payout Percentage” is equal to the sum of the Funding Percentage for each of the fiscal years in the Performance Period, divided by three; provided that the Average Payout Percentage shall not be greater than 200%.
“Funding Percentage” for the first fiscal year in the Performance Period is based on the actual economic profit (“EP”) for such fiscal year, calculated as described below and determined in accordance with the following table:
| EP (for the first fiscal year in the Performance Period) | |||||
| EP Threshold* | $ | ||||
| EP Target** | $ | ||||
| EP Max*** | $ | ||||
“Funding Percentage” for the second and third fiscal years in the Performance Period is based on the growth of annual EP, calculated as described below, for the applicable fiscal year as compared to the prior fiscal year (“EP Growth”), expressed as a percentage and calculated based upon EP at the end of each such fiscal year of the Performance Period, determined in accordance with the following table:
| EP (for the second and third fiscal years in the Performance Period) | |||||
| EP Growth Threshold* | % | ||||
| EP Growth Target** | % | ||||
| EP Growth Max*** | % | ||||
* Achievement of the EP Threshold amount (or below) or the EP Growth Threshold percentage (or below), as the case may be, shall result in a Funding Percentage of 0% for the applicable fiscal year of the Performance Period.
** Achievement of the EP Target amount or the EP Growth Target percentage, as the case may be, shall result in a Funding Percentage of 100% for the applicable fiscal year of the Performance Period.
*** Achievement of the EP Max amount (or above) or the EP Growth Max percentage (or above), as the case may be, shall result in a Funding Percentage of 300% for the applicable fiscal year of the Performance Period. For
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avoidance of doubt, achievement above the EP Max amount or the EP Growth Max percentage shall not result in a Funding Percentage above 300% for the applicable fiscal year of the Performance Period.
Note: Achievement of EP in between the Threshold and Target levels or in between the Target and Max levels or EP Growth in between the Threshold and Target levels or in between the Target and Max levels shall be determined through linear interpolation. For the avoidance of doubt, if EP in excess of the Threshold level or EP Growth in excess of the Threshold level is not achieved, the Funding Percentage for the applicable fiscal year of the Performance Period shall be 0%.
EP is defined as Earnings Before Interest & Taxes, adjusted for non-cash restructuring charges, times one minus the tax rate, less capital charge.
Notwithstanding any other provision in the PSU Terms and Conditions (including this Exhibit A) to the contrary, if EP for any fiscal year in the Performance Period is negative, the Funding Percentage for such fiscal year in the Performance Period shall be 0%.
For avoidance of doubt, while the expectation is that EP for a given fiscal year shall be calculated based upon the Company’s financial statements for such fiscal year that are filed with the SEC, the Committee shall have the authority to include information not reflected in such financial statements for purposes of determining EP for such fiscal year if the Committee determines that the inclusion of such information more accurately reflects the financial performance of the Company for such fiscal year. To the extent that such information used in a prior fiscal year is reflected in the filed financial statements for a subsequent fiscal year, appropriate changes shall be made to relevant information in such filed financial statements for purposes of calculating EP for such subsequent fiscal year to avoid double counting of the same information.
Notwithstanding the above, the applicable EP amount for the corresponding fiscal year that is used as the basis for calculating either EP or EP Growth results for such fiscal year shall be adjusted, fairly and appropriately, in accordance with the Plan and, as provided in the PSU Terms and Conditions (including this Exhibit A), to reflect accurately the direct and measurable effect of the impact of each of the following events not otherwise reflected in the determination of the EP goals or the initial EP levels (each, an “Event”) including, without limitation, the financial statement impact on the Company on account of the occurrence or potential occurrence of an Event: (1) the acquisition or divestiture of a business, (2) a Change in Control, (3) U.S. Federal changes in tax statutes or the addition or deletion of taxes to which the Company or any Affiliated Company is subject, (4) force majeure (including events known as “Acts of God”), (5) the adoption of new or revised accounting pronouncements or changes to application of accounting pronouncements, (6) an asset impairment charge other than for the final fiscal year of the Performance Period, and (7) any extraordinary, unusual or non-recurring item not previously listed. Notwithstanding the foregoing, an event listed in the preceding sentence shall not qualify as an Event, and therefore no adjustment shall be made to the EP goals or EP levels, unless the impact of the occurrence or potential occurrence of such an event listed in the preceding sentence exceeds $2 million in EP. The purpose of any adjustments on account of the occurrence of an Event is to keep the probability of achieving the EP or EP Growth goals the same as if the Event triggering such adjustment had either not occurred or had not resulted in any financial statement impact. The determination of any adjustments shall be based on the Company’s accounting as set forth in its books and records (including business projections) and/or in the annual budgets and/or long-range plans of the Company pursuant to which the EP and EP Growth goals were established. The amount of any such adjustment shall be approved by the Committee in its good faith determination in accordance with the provisions of this paragraph. To the extent applicable, the Committee shall condition the determination of the number of Performance Share Units vested under this Exhibit A upon the satisfaction of the adjusted EP goals or EP levels, as the case may be. All Performance Share Units that are not vested for the Performance Period shall be forfeited as of the last day of the Performance Period.
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EXHIBIT B
This Exhibit B constitutes part of the PSU Terms and Conditions and includes additional or different terms and conditions that govern this Award if the Grantee resides and/or works outside the United States.
The terms and conditions in Part A of this Exhibit B apply to all Grantees who reside and/or work outside the United States. The terms and conditions in Part B of this Exhibit B will also apply to the Grantee if he or she resides and/or works in one of the countries referenced in Part B. Capitalized terms used but not defined herein shall have the same meanings assigned to them in the Plan and/or the PSU Terms and Conditions.
If the Grantee is a citizen or resident of a country, or is considered a resident of a country, other than that in which he or she is currently residing and/or working, or transfers residence and/or employment after the grant date, the information contained herein may not apply to the Grantee in the same manner.
PART A: ALL COUNTRIES OUTSIDE THE UNITED STATES
The following additional terms and conditions will apply to the Grantee if he or she works and/or resides in any country outside the United States.
1. Taxes.
The following language replaces Section 7 of the PSU Terms and Conditions:
The Grantee acknowledges that regardless of any action the Company or, if different, the Grantee’s employer (the “Employer”) takes with respect to any or all income tax (including federal, state and local taxes), social insurance, payroll tax, fringe benefits tax, payment on account or other tax-related items related to the Grantee’s participation in the Plan and legally applicable to the Grantee or deemed applicable to the Grantee (the “Tax-Related Items”), the ultimate liability for all Tax-Related Items is and remains his or her responsibility and may exceed the amount actually withheld by the Company or the Employer. The Grantee further acknowledges that the Company and/or the Employer (1) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of this Award or the underlying Shares, including, but not limited to, the grant, vesting or settlement of this Award, the issuance of Shares upon settlement of this Award, the subsequent sale of Shares acquired pursuant to such issuance and the receipt of any dividends and/or any dividend equivalents; and (2) do not commit to and are under no obligation to structure the terms of the grant or any aspect of this Award to reduce or eliminate the Grantee’s liability for Tax-Related Items or achieve any particular tax result. Further, if the Grantee has become subject to tax in more than one jurisdiction, the Grantee acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Tax-Related Items in more than one jurisdiction.
In connection with any relevant taxable or tax withholding event, as applicable, the Grantee will pay or make adequate arrangements satisfactory to the Company and/or the Employer to satisfy all Tax-Related Items. In this regard, the Grantee authorizes the Company and/or the Employer, or their respective agents, at their discretion, to satisfy any applicable withholding obligations or rights with regard to all Tax-Related Items by one or a combination of the following:
(a)withholding from the Grantee’s wages or other cash compensation payable to him or her by the Company and/or the Employer; or
(b)requiring the Grantee to make a payment in a form acceptable to the Company in an amount equal to the withholding obligations for Tax-Related Items; or
(c)withholding from proceeds of the sale of Shares acquired upon vesting/settlement of this Award either through a voluntary sale or through a mandatory sale arranged by the Company (on the Grantee’s behalf pursuant to this authorization without further consent); or
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(d)withholding in Shares to be issued upon vesting/settlement of this Award; provided, however, that to the extent necessary to qualify for an exemption from the application of Section 16(b) of the U.S. Securities Exchange Act of 1934, as amended, if applicable, such share withholding procedure will be subject to the express prior approval of the Board or the Committee; or
(e)any other method determined by the Company to be in compliance with Applicable Laws.
The Company may withhold or account for Tax-Related Items by considering statutory withholding rates or other applicable withholding rates, including maximum applicable rates in the Grantee’s country, in which case the Grantee may receive a refund of any over-withheld amount in cash (with no entitlement to the Share equivalent), or if not refunded, the Grantee may need to seek a refund from the local tax authorities. In the event of under-withholding, the Grantee may be required to pay any additional Tax-Related Items directly to the applicable tax authority or to the Company and/or the Employer. If the obligation for Tax-Related Items is satisfied by withholding in Shares, for tax purposes, the Grantee will be deemed to have been issued the full number of Shares subject to the vested Award, notwithstanding that a number of the Shares is held back solely for the purpose of paying the Tax-Related Items due as a result of any aspect of the Grantee’s participation in the Plan.
Finally, the Grantee agrees to pay to the Company or the Employer any amount of Tax-Related Items that the Company or the Employer may be required to withhold or account for as a result of his or her participation in the Plan that cannot be satisfied by the means previously described. The Company may refuse to issue or deliver the Shares or the proceeds of the sale of Shares, if the Grantee fails to comply with his or her obligations in connection with the Tax-Related Items.
2. Nature of Grant.
By accepting this Award, the Grantee acknowledges, understands and agrees that:
(a)the Plan is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;
(b)the Plan is operated and this Award is granted solely by the Company and only the Company is a party to the PSU Terms and Conditions; accordingly, any rights the Grantee may have under the PSU Terms and Conditions may be raised only against the Company but not any Subsidiary or affiliate of the Company (including, but not limited to, the Employer);
(c)no Subsidiary or affiliate of the Company (including, but not limited to, the Employer) has any obligation to make any payment of any kind to the Grantee under the Agreement;
(d)the grant of this Award is exceptional, voluntary and occasional and does not create any contractual or other right to receive future grants of Units, or benefits in lieu of Units, even if Units have been granted in the past;
(e)all decisions with respect to future grants of Units, if any, will be at the sole discretion of the Company;
(f)the grant of this Award and the Grantee’s participation in the Plan shall not create a right to employment or other service relationship with the Company;
(g)the grant of this Award and the Grantee’s participation in the Plan shall not be interpreted as forming or amending an employment or service contract with the Company or the Employer and shall not interfere with the ability of the Company, the Employer or any Subsidiary or affiliate of the Company, as applicable, to terminate the Grantee’s employment or service relationship;
(h)the Grantee is voluntarily participating in the Plan;
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(i)this Award and the Shares subject to this Award, and the income from and value of same, are extraordinary items that do not constitute compensation of any kind for services of any kind rendered to the Company or the Employer, and which are outside the scope of the Grantee’s employment or service contract, if any;
(j)this Award and the Shares subject to this Award, and the income from and value of same, are not intended to replace any pension rights or compensation;
(k)unless otherwise agreed with the Company in writing, this Award and the Shares subject to this Award, and the income from and value of same, are not granted as consideration for, or in connection with, the service the Grantee may provide as a director of a Subsidiary or affiliate of the Company;
(l)this Award and the Shares subject to this Award, and the income from and value of same, are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, holiday pay, leave-related payments, holiday top-up, pension or retirement or welfare benefits or similar payments;
(m)the future value of the underlying Shares is unknown, indeterminable and cannot be predicted with certainty;
(n)no claim or entitlement to compensation or damages shall arise from forfeiture of this Award resulting from termination of the Grantee’s employment or service (for any reason whatsoever, whether or not later found to be invalid or in breach of applicable laws in the jurisdiction where the Grantee is employed or the terms of the Grantee's employment agreement, if any) or from the application of any clawback or recoupment policy adopted by the Company, including the Clawback Policy, or imposed by Applicable Laws;
(o)for purposes of this Award, the Grantee’s termination date will be the date he or she is no longer actively providing services to the Company, the Employer or any of the other Subsidiaries or affiliates of the Company (regardless of the reason for such termination and whether or not later found to be invalid or in breach of applicable laws in the jurisdiction where the Grantee is employed or the terms of the Grantee’s employment agreement, if any) and unless otherwise determined by the Company, such date will not be extended by any notice period (e.g., the Grantee’s period of employment would not include any contractual notice period or any period of “garden leave” or similar period mandated under applicable laws in the jurisdiction where the Grantee is employed or the terms of the Grantee’s employment agreement, if any); the Committee shall have the exclusive discretion to determine when the Grantee is no longer actively providing services for purposes of this Award (including whether the Grantee may still be considered to be providing services while on a leave of absence);
(p)unless otherwise provided in the Plan or by the Company in its discretion, this Award and the benefits evidenced by this Agreement do not create any entitlement to have this Award or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Shares; and
(q)neither the Company, the Employer nor any Subsidiary or affiliate of the Company shall be liable for any foreign exchange rate fluctuation between the Grantee’s local currency and the United States Dollar that may affect the value of this Award or of any amounts due to the Grantee pursuant to the vesting of this Award or the subsequent sale of any Shares acquired upon settlement.
3. No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Grantee’s participation in the Plan, or his or her acquisition or sale of the underlying Shares. The Grantee is hereby advised to consult with his or her own personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.
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4. Insider Trading Restrictions / Market Abuse Laws. The Grantee may be subject to insider trading restrictions and/or market abuse laws, which may affect his or her ability to accept, acquire, sell or otherwise dispose of Shares, rights to acquire Shares (e.g., Units) or rights linked to the value of Shares during such times as the Grantee is considered to have "inside information" regarding the Company as defined by or determined under the laws or regulations in the applicable jurisdictions. Local insider trading laws and regulations may prohibit the cancellation or amendment of orders the Grantee placed before he or she possessed inside information. Furthermore, the Grantee could be prohibited from (i) disclosing the inside information to any third party and (ii) "tipping" third parties or causing them otherwise to buy or sell securities, where third parties include fellow employees. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. The Grantee acknowledges that it is his or her responsibility to comply with any applicable restrictions and that he or she should speak to his or her personal legal advisor on this matter.
5. Foreign Asset / Account Reporting Requirements, Exchange Controls and Tax Requirements. The Grantee’s country may have certain foreign asset and/or account reporting requirements and exchange controls which may affect the Grantee’s ability to acquire or hold Shares under the Plan or cash received from participating in the Plan (including from any dividends received or sale proceeds arising from the sale of Shares) in a brokerage or bank account outside the Grantee’s country. The Grantee may be required to report such accounts, assets or transactions to the tax or other authorities in the Grantee’s country. The Grantee also may be required to repatriate sale proceeds or other funds received as a result of the Grantee’s participation in the Plan to the Grantee’s country through a designated bank or broker and/or within a certain time after receipt. In addition, the Grantee may be subject to tax payment and/or reporting obligations in connection with any income realized under the Plan and/or from the sale of Shares. The Grantee acknowledges that it is the Grantee’s responsibility to be compliant with all such requirements, and the Grantee should consult his or her personal legal and tax advisors, as applicable, to ensure his or her compliance.
6. Issuance of Shares. If advisable due to local law requirements, the Committee, in its sole and absolute discretion, may require the immediate forced sale of the Shares issuable upon vesting of this Award. Alternatively, unless otherwise set forth in this Exhibit B, the Committee, in its sole and absolute discretion, may determine to pay out this Award in cash equal to the Fair Market Value of the Shares underlying this Award.
7. Imposition of Other Requirements. The Company reserves the right to impose other requirements on the Grantee’s participation in the Plan, on this Award and on any Shares acquired under the Plan, to the extent the Company determines it is necessary or advisable in order to comply with Applicable Laws or facilitate the administration of the Plan, and to require the Grantee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
8. Language. The Grantee acknowledges and represents that he or she is proficient in the English language, or has consulted with an advisor who is proficient in the English language, so that the Grantee understands the terms of the Plan and this Agreement and any other documents related to the Plan. If the Grantee has received this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different from the English version, the English version will control, unless otherwise required by applicable law.
9. Electronic Delivery and Participation. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation by electronic means. The Grantee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or another third party designated by the Company.
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PART B: COUNTRY-SPECIFIC TERMS AND CONDITIONS
EUROPEAN UNION ("EU") / EUROPEAN ECONOMIC AREA ("EEA") / UNITED KINGDOM
If the Grantee works and/or resides in a country in the EU, EEA or the United Kingdom, the following provisions replace Section 12 of the PSU Terms and Conditions:
Data Privacy. To participate in the Plan, the Grantee must review the following information in (a) through (g) below and consent to the collection, usage and processing of the Grantee's Personal Data (as defined below) by or on behalf of the Company, the Employer and/or any Subsidiary and the third parties described in (c) below.
The Company, with its registered office at 1221 Broadway, Oakland, CA 94162, U.S.A., is the controller of the Grantee's Personal Data in connection with this Award, the Plan and the PSU Terms and Conditions. The Company's representative in the United Kingdom is CBee (Europe) Limited, with its primary office at 2 Sheen Road, Richmond, England TW9 1AE, United Kingdom.
(a)Declaration of Consent. By accepting these Performance Share Units via the Company's acceptance procedure, the Grantee is declaring that he or she understands and agrees with the data processing practices described herein and consents to the collection, processing and use of Personal Data (as defined below) by the Company and the transfer of Personal Data to the recipients mentioned herein, including recipients located in countries which do not provide an adequate level of protection from a local data protection law perspective, for the purposes described herein.
(b)Data Collection, Usage and Processing. The Company collects, uses and processes Personal Data about the Grantee for the purposes of implementing, administering and managing the Plan and allocating Shares issued thereunder. The Grantee understands that this Personal Data may include, without limitation, the Grantee's name, home address and telephone number, email address, date of birth, social insurance number, passport number or other identification number, salary, nationality, job title, any Shares or directorships held in the Company, details of all Units or any other entitlement to Shares or equivalent benefits awarded, canceled, exercised, vested, unvested or outstanding in the Grantee's favor (the "Personal Data"). The Company's legal basis for the processing of the Grantee's Personal Data, where required, is the Grantee's consent.
(c)Stock Plan Administration Service Providers. The Company transfers the Grantee's Personal Data, or parts thereof, to UBS Financial Services, Inc. (“UBS”) (and its affiliated companies), an independent service provider based in the United States which assists the Company with the implementation, administration and management of the Plan. In the future, the Company may select a different service provider and share the Grantee's Personal Data with such different service provider that serves the Company in a similar manner. The Grantee understands and acknowledges that the Company's service provider will open an account for the Grantee to receive and trade Shares acquired under the Plan and that the Grantee will be asked to agree on separate terms and data processing practices with the service provider, which is a condition of the Grantee's ability to participate in the Plan.
(d)International Data Transfers. The Company and, as of the date hereof, any third parties assisting in the implementation, administration and management of the Plan, such as UBS, are based in the United States. The Grantee understands and acknowledges that the Grantee's country may have enacted data privacy laws that are different from the laws of the United States. The Company's legal basis for the transfer of the Grantee's Personal Data is the Grantee's consent.
(e)Data Retention. The Company will use the Grantee's Personal Data only as long as is necessary to implement, administer and manage the Grantee's participation in the Plan, or to comply with legal or regulatory obligations, including under tax and securities laws. In the latter case, the Grantee understands
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and acknowledges that the Company's legal basis for the processing of the Grantee's Personal Data would be compliance with the relevant laws or regulations. When the Company no longer needs the Grantee's Personal Data for any of the above purposes, the Grantee understands the Company will remove it from its systems.
(f)Voluntariness and Consequences of Denial/Withdrawal of Consent. The Grantee understands that the Grantee's participation in the Plan and the Grantee's consent are voluntary. The Grantee may deny or later withdraw the Grantee's consent at any time, with future effect and for any or no reason. If the Grantee denies or later withdraws his or her consent, the Grantee's employment status or service with the Employer will not be affected; the only consequence of denying or withdrawing consent is that the Company would not be able to grant Units or other equity awards to the Grantee or administer or maintain such awards.
(g)Data Subject Rights. The Grantee understands that data subject rights regarding the processing of his or her Personal Data vary depending on the applicable law and that, depending on where the Grantee is based, the Grantee may have, without limitation, the rights to (i) request access to or copies of Personal Data the Company processes, (ii) correction of incorrect Personal Data, (iii) deletion of Personal Data, (iv) restrictions on the processing of Personal Data, (v) object to the processing of Personal Data for legitimate interests, (vi) portability of Personal Data, (vii) lodge complaints with competent authorities in the Grantee's jurisdiction, and/or (viii) receive a list with the names and addresses of any potential recipients of his or her Personal Data. To receive clarification regarding any of the Grantee's rights or to exercise any of his or her rights, the Grantee should contact the Grantee's local human resources representative.
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CANADA
Awards Settled in Shares Only. Notwithstanding any discretion contained in the Plan, Awards granted to Grantees in Canada shall be paid in Shares only and do not provide any right for the Grantee to receive a cash payment.
Nature of Grant.
The following provision replaces Section (c) of Part A, “Nature of Grant” of this Exhibit B:
Except as required under applicable legislation, no Subsidiary or affiliate of the Company (including, but not limited to, the Employer) has any obligation to make any payment of any kind to the Grantee under the Agreement;
The following provision replaces Section (l) of Part A, “Nature of Grant” of this Exhibit B:
Except as required under applicable legislation, this Award and the Shares subject to this Award, and the income from and value of same, are not part of normal or expected compensation or salary for any purposes, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, holiday pay, leave-related payments, holiday top-up, pension or retirement or welfare benefits or similar payments;
The following provision replaces Section (o) of Part A, “Nature of Grant” of this Exhibit B:
For purposes of this Award, except to the extent expressly provided in this Agreement or expressly required by applicable legislation, the Grantee’s employment or other service relationship will be considered terminated (regardless of the reason for such termination) and his or her right to vest in this Award under the Plan, if any, will terminate as of the date the Grantee is no longer employed by or providing services to the Company and any Subsidiary or affiliate of the Company (the “Termination Date”). Except to the extent required by applicable legislation, the Termination Date will exclude any notice period or period of pay in lieu of such notice required under statute, contract, common/civil law or otherwise. The Grantee will not earn or be entitled to any pro-rated vesting for that portion of time before the date on which his or her right to vest terminates, nor will the Grantee be entitled to any compensation for lost vesting.
In case of any dispute as to whether termination of employment has occurred that cannot be reasonably determined under the terms of this Agreement and the Plan, the Committee will have sole discretion, subject to applicable legislation, to determine whether such termination of employment has occurred and the effective date of such termination. Notwithstanding the foregoing, if applicable employment standards legislation requires continued entitlement to vesting during a statutory notice period, the Termination Date and the termination of the Grantee’s right to vest in or otherwise benefit from this Award under the Plan, if any, will be effective as of the earliest date permitted under applicable legislation. For clarity, the Grantee will not earn or be entitled to pro-rated vesting if the vesting date falls after this earliest statutory date, nor will the Grantee be entitled to any compensation for lost vesting, benefits or participation. For further clarity, any reference to a termination of the Grantee's employment or service in the PSU Terms and Conditions or in the Plan will be interpreted to mean the Termination Date as defined herein.
Securities Law Information.
The Grantee is permitted to sell Shares acquired through the designated broker under the Plan, if any, provided the resale of Shares acquired under the Plan takes place outside Canada through the facilities of a stock exchange on which the Shares are listed. The Shares are currently listed on the New York Stock Exchange, which is located outside of Canada, and the Shares may be sold through this exchange.
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MEXICO
Nature of Grant.
The following provision supplements Part A, “Nature of Grant” of this Exhibit B:
No Entitlement or Claims for Compensation. By accepting this Award, the Grantee understands and agrees that any modification of the Plan or the PSU Terms and Conditions or its termination shall not constitute a change or impairment of the terms and conditions of employment.
Policy Statement. The invitation that the Company is making under the Plan is unilateral and discretionary and, therefore, the Company reserves the absolute right to amend it and discontinue it at any time without any liability.
The Company, with registered offices at 1221 Broadway, Oakland CA 94162, U.S.A., is solely responsible for the administration of the Plan and participation in the Plan and, in the Grantee’s case, the acquisition of Shares does not, in any way, establish an employment relationship between the Grantee and the Company since the Grantee is participating in the Plan on a wholly commercial basis and his or her sole Employer is a Mexican Subsidiary or affiliate of the Company, nor does it establish any rights between the Grantee and the Employer.
Plan Document Acknowledgement. By accepting this Award, the Grantee acknowledges that he or she has received copies of the Plan and the PSU Terms and Conditions, has reviewed the Plan and the PSU Terms and Conditions in their entirety and fully understands and accepts all provisions of the Plan and the PSU Terms and Conditions.
In addition, by accepting the PSU Terms and Conditions, the Grantee further acknowledges that he or she has read and specifically and expressly approves the terms and conditions in Part A, “Nature of Grant” in this Exhibit B, in which the following is clearly described and established: (i) participation in the Plan does not constitute an acquired right; (ii) the Plan and participation in the Plan is offered by the Company on a wholly discretionary basis; (iii) participation in the Plan is voluntary; and (iv) the Company and its Subsidiaries and affiliates are not responsible for any decrease in the value of the Shares underlying this Award.
Finally, the Grantee hereby declares that he or she does not reserve any action or right to bring any claim against the Company for any compensation or damages as a result of participation in the Plan and therefore grants a full and broad release to the Employer and the Company and its Subsidiaries and affiliates with respect to any claim that may arise under the Plan.
Spanish Translation
La siguiente disposición complementa la Parte A, «Naturaleza de la concesión», del presente Anexo B:
Ausencia de derecho o reclamación de indemnización. Al aceptar esta concesión, el Beneficiario entiende y acepta que cualquier modificación del Plan o de los Términos y condiciones de las PSU, así como su rescisión, no constituirá un cambio ni un menoscabo de los términos y condiciones de empleo.
Declaración de política. La invitación que la Empresa realiza en el marco del Plan es unilateral y discrecional y, por lo tanto, la Empresa se reserva el derecho absoluto de modificarla y suspenderla en cualquier momento sin incurrir en responsabilidad alguna.
La Empresa, con domicilio social en 1221 Broadway, Oakland, CA 94162, EE. UU., es la única responsable de la administración del Plan y de la participación en el mismo y, en el caso del Beneficiario, la adquisición de Acciones no establece, en modo alguno, una relación laboral entre el Beneficiario y la Empresa, ya que el Beneficiario participa en el Plan con carácter totalmente comercial y su único Empleador es una filial o Empresa asociada mexicana de la Empresa, ni establece ningún derecho entre el Beneficiario y el Empleador.
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Declaración de conocimiento del documento del plan. Al aceptar esta concesión, el Beneficiario reconoce que ha recibido copias del Plan y de los Términos y condiciones de las PSU, que ha revisado el Plan y los Términos y condiciones de las PSU en su totalidad y que comprende y acepta plenamente todas las disposiciones del Plan y de los Términos y condiciones de las PSU.
Además, al aceptar los Términos y Condiciones de las PSU, el Beneficiario reconoce asimismo que ha leído y aprueba específica y expresamente los términos y condiciones de la Parte A, «Naturaleza de la concesión», del presente Anexo B, en la que se describe y establece claramente lo siguiente: (i) la participación en el Plan no constituye un derecho adquirido; (ii) el Plan y la participación en el mismo son ofrecidos por la Empresa de forma totalmente discrecional; (iii) la participación en el Plan es voluntaria; y (iv) la Empresa y sus filiales y sociedades vinculadas no se hacen responsables de ninguna disminución del valor de las Acciones subyacentes a esta Concesión.
Por último, el Beneficiario declara por la presente que no se reserva ninguna acción ni derecho para interponer reclamación alguna contra la Empresa en concepto de indemnización o daños y perjuicios como consecuencia de la participación en el Plan y, por lo tanto, concede una exención plena y amplia al Empleador, a la Empresa y a sus filiales y Empresas asociadas con respecto a cualquier reclamación que pueda surgir en el marco del Plan.
Securities Law Information.
Any Awards offered under the Plan and the Shares underlying this Award have not been registered with the National Register of Securities maintained by the Mexican National Banking and Securities Commission and cannot be offered or sold publicly in Mexico. In addition, the Plan and any other document relating to any Units may not be publicly distributed in Mexico. These materials are addressed to the Grantee only because of his or her existing relationship with the Company and these materials should not be reproduced or copied in any form. The offer contained in these materials does not constitute a public offering of securities but rather constitutes a private placement of securities addressed specifically to individuals who are present employees and consultants of the Company, made in accordance with the provisions of the Mexican Securities Market Law, and any rights under such offering shall not be assigned or transferred.
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UNITED KINGDOM
Data Privacy. Please refer to Part B, "EU/EEA/United Kingdom" of this Exhibit B.
Taxes. The following provision supplements Part A, “Taxes” of this Exhibit B:
Without limitation to the “Taxes” section of Part A of this Exhibit B, the Grantee agrees that he or she is liable for all Tax-Related Items and hereby covenants to pay all such Tax-Related Items, as and when requested by the Company or the Employer or by HM Revenue and Customs (“HMRC”) (or any other tax authority or any other relevant authority). The Grantee also agrees to indemnify and keep indemnified the Company and the Employer against any Tax-Related Items that they are required to pay or withhold on the Grantee’s behalf or have paid or will pay to HMRC (or any other tax authority or other relevant authority) on the Grantee’s behalf.
Notwithstanding the foregoing, if the Grantee is a director or executive officer (within the meaning of Section 13(k) of the U.S. Securities Exchange Act of 1934, as amended), the Grantee may not be able to indemnify the Company or the Employer for the amount of any Tax-Related Items not collected from or paid by the Grantee as it may be considered a loan. In this case, the Tax-Related Items not collected or paid may constitute an additional benefit to the Grantee on which additional income tax and National Insurance contributions (“NIC”) may be payable. The Grantee acknowledges that he or she will be responsible for paying and reporting any income tax due on this additional benefit directly to HMRC under the self-assessment regime and for paying the Company or the Employer, as applicable, for the value of any employee NIC due on this additional benefit, which the Company or the Employer may recover from the Grantee by any of the means referred to in the “Taxes” section of Part A of this Exhibit B.
431 Election. It shall be a term of this Award that the Grantee shall jointly with the Employer enter into the joint election within Section 431 of the U.K. Income Tax (Earnings and Pensions) Act 2003 (“ITEPA 2003”) attached immediately below (the “431 Election”) at the time of acceptance of the terms of the PSU Terms and Conditions, or at such subsequent time as may be requested by the Company, in respect of computing any tax charge on the acquisition of "Restricted Securities” (as defined in Sections 423 and 424 of ITEPA 2003), and that the Grantee will not revoke any such election at any time. This election will be to treat the Shares the Grantee acquires on the settlement date as if they were not Restricted Securities (for U.K. tax purposes only). If the Grantee does not enter into the 431 Election in accordance with these instructions, the Company may, in its sole discretion, refuse to issue Shares at settlement of these Performance Share Units.
IMPORTANT NOTE: By accepting these Performance Share Units via the Company’s acceptance procedure or by separately signing the 431 Election (whether in hard copy or electronically), the Grantee agrees to be bound by the terms of the 431 Election. The Grantee should read the terms of the 431 Election carefully before accepting the PSU Terms and Conditions and the 431 Election. If requested by the Company, the Grantee agrees to execute the 431 Election in hard copy even if the Grantee has accepted the PSU Terms and Conditions through the Company’s electronic acceptance procedure.
By entering into the 431 Election, the Grantee agrees that he or she will be subject to income tax and, where applicable, National Insurance contributions based on the full unrestricted market value of the Shares that he or she acquires pursuant to the settlement of these Performance Share Units. The Grantee should print and keep copies of the 431 Election for the Grantee’s records.
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UNITED KINGDOM
THE CLOROX COMPANY - 2005 STOCK INCENTIVE PLAN
Joint Election under section 431(1) of the Income Tax (Earnings and Pensions) Act 2003 for full disapplication of Chapter 2 of the Income Tax (Earnings and Pensions) Act 2003
1.Between
The Employee who has obtained authorized access to this joint election under section 431(1) Income Tax (Earnings and Pensions) Act 2003 and
the Company (who is the Employee’s employer) CBee (Europe) Limited
of Company Registration Number 06062933
2.Purpose of Election
This joint election is made pursuant to section 431(1) Income Tax (Earnings and Pensions) Act 2003 (ITEPA) and applies where employment-related securities, which are restricted securities by reason of section 423 ITEPA, are acquired.
The effect of an election under section 431(1) is that, for the relevant Income Tax and NIC purposes, the employment-related securities and their market value will be treated as if they were not restricted securities and that sections 425 to 430 ITEPA do not apply. Additional Income Tax will be payable (with PAYE and NIC where the securities are Readily Convertible Assets).
| Should the value of the securities fall following the acquisition, it is possible that Income Tax/NIC that would have arisen because of any future chargeable event (in the absence of an election) would have been less than the Income Tax/NIC due by reason of this election. Should this be the case, there is no Income Tax/NIC relief available under Part 7 of ITEPA 2003; nor is it available if the securities acquired are subsequently transferred, forfeited or revert to the original owner. | ||||||||||||||
3.Application
This joint election is made not later than 14 days after the date of acquisition of the securities by the Employee and applies to:
Number of securities All securities
Description of securities Common Stock
Name of issuer of securities The Clorox Company
to be acquired by the Employee after the date of this election under the terms of The Clorox Company 2005 Stock Incentive Plan.
4.Extent of Application
This election under section 431(1) ITEPA disapplies all restrictions attaching to the securities.
5.Declaration
This election will become irrevocable upon the later of its signing or the acquisition and each subsequent acquisition of employment-related securities to which this election applies.
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The Employee acknowledges that, by signing or electronically accepting this election, the Employee agrees to be bound by the terms of this election.
……………………………………….. …./…./……….
Signature (Employee) Date
The Company acknowledges that, by signing or electronically accepting this election or arranging for the scanned signature of an authorised representative to appear on this election, the Company agrees to be bound by the terms of this election.
………………………………………. …./…../………
Signature (for and on behalf of the Company) Date
………………………….………………
Position in company
Note: Where the election is in respect of multiple acquisitions, prior to the date of any subsequent acquisition of a security it may be revoked by agreement between the employee and employer in respect of that and any later acquisition.
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Exhibit 31.1
CERTIFICATION
I, Linda Rendle, certify that:
1.I have reviewed this quarterly report on Form 10-Q of The Clorox Company;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 2, 2026 | ||
| /s/ Linda Rendle | ||
| Linda Rendle | ||
Chair and Chief Executive Officer | ||
Exhibit 31.2
CERTIFICATION
I, Luc Bellet, certify that:
1.I have reviewed this quarterly report on Form 10-Q of The Clorox Company;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
Date: November 2, 2026 | ||
| /s/ Luc Bellet | ||
| Luc Bellet | ||
| Executive Vice President - Chief Financial Officer | ||
Exhibit 32
CERTIFICATION
In connection with the periodic report of The Clorox Company (the “Company”) on Form 10-Q for the period ended September 30, 2026, as filed with the Securities and Exchange Commission (the “Report”), we, Linda Rendle, Chair and Chief Executive Officer of the Company, and Luc Bellet, Executive Vice President - Chief Financial Officer of the Company, hereby certify as of the date hereof, solely for purposes of Title 18, Chapter 63, Section 1350 of the United States Code, that to our knowledge:
(1)the Report fully complies with the requirements of Section 13(a) or 15(d), as applicable, of the Securities Exchange Act of 1934, and
(2)the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company at the dates and for the periods indicated.
This Certification has not been, and shall not be deemed, “filed” with the Securities and Exchange Commission.
Date: November 2, 2026
| /s/ Linda Rendle | ||
| Linda Rendle | ||
Chair and Chief Executive Officer | ||
| /s/ Luc Bellet | ||
| Luc Bellet | ||
| Executive Vice President - Chief Financial Officer | ||