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Gillette Co – ‘10-K405’ for 12/31/95

As of:  Friday, 3/22/96   ·   For:  12/31/95   ·   Accession #:  950135-96-1465   ·   File #:  1-00922

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  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 3/22/96  Gillette Co                       10-K405    12/31/95   11:191K                                   Bowne of Boston/FA

Annual Report — [x] Reg. S-K Item 405   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K405     The Gillette Company                                  15     90K 
 2: EX-10.F     Directors,Officers & Co. Indemnity Ins. & Pension     14     37K 
 3: EX-10.H     Directors Compensation Deferral Provisions             2±     9K 
 4: EX-10.L     Description of Agreement Dated 1/1/96                  1      6K 
 5: EX-11       Computation of Per Share Earnings                      1      9K 
 6: EX-12       Computation of Ratios of Current Assets & Liabil.      1      7K 
 7: EX-13       Portions of 1995 Annual Report                        37    210K 
 8: EX-22       Susidiaries of the Gillette Company                    2     16K 
 9: EX-23       Independent Auditors Consent                           1      8K 
10: EX-24       Power of Attorney                                      2±    12K 
11: EX-27       Financial Data Schedule                                1     10K 


10-K405   —   The Gillette Company
Document Table of Contents

Page (sequential) | (alphabetic) Top
 
11st Page   -   Filing Submission
2Item 1. Description of Business
"Business Segments
3Item 2. Description of Property
5Item 3. Legal Proceedings
"Item 4. Submission of Matters to A Vote of Security Holders
6Item 5. Market for the Registrant's Common Stock and Related Security Holder Matters
7Item 6. Selected Financial Data
"Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
"Item 8. Financial Statements and Supplementary Data
8Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
"Item 10. Directors and Executive Officers
"Item 11. Executive Compensation
"Item 12. Security Ownership of Certain Beneficial Owners and Management
"Item 13. Certain Relationships and Related Transactions
9Item 14. Exhibits, Financial Statements, Schedules, and Reports on Form 8-K
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================================================================================ SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ------------------------ (MARK ONE) [X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED) FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995 OR [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES ACT OF 1934 (NO FEE REQUIRED) COMMISSION FILE NO. I-922 THE GILLETTE COMPANY -------------------- (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) [Download Table] INCORPORATED IN DELAWARE 04-1366970 ------------------------ ---------- (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) PRUDENTIAL TOWER BUILDING, BOSTON, MASSACHUSETTS 02199 ------------------------------------------------ ----- (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE 617-421-7000 SECURITIES REGISTERED PURSUANT TO SECTION 12(B) OF THE ACT: [Download Table] NAME OF EACH EXCHANGE ON TITLE OF EACH CLASS WHICH REGISTERED ------------------- ------------------------ COMMON STOCK, $1.00 PAR VALUE NEW YORK STOCK EXCHANGE BOSTON STOCK EXCHANGE MIDWEST STOCK EXCHANGE PACIFIC STOCK EXCHANGE 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 X No Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K ((sec.)229.405 of this chapter) is not contained herein, and will not be contained to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K [X]. The aggregate market value of Gillette Common Stock held by non-affiliates as of March 1, 1996 was approximately $21,261,000,000.* The number of shares of Gillette Common Stock outstanding as of March 1, 1996 was 444,793,019. DOCUMENTS INCORPORATED BY REFERENCE [Enlarge/Download Table] Certain portions of the following documents have been incorporated by reference into the 10-K Parts indicated: DOCUMENTS 10-K PARTS --------- ---------- 1. The Gillette Company 1995 Annual Report to Stockholders (the "1995 Annual Report")............................................... Parts I and II 2. The Gillette Company 1996 Proxy Statement (The "1996 Proxy Statement")... Part III ================================================================================ * This amount does not include the value of 160,405.0563 shares of Series C ESOP Convertible Preferred Stock issued for $602.875 per share. For purposes of this calculation only, Gillette Common Stock held by Executive Officers or directors of the Company has been treated as owned by affiliates.
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PART I ITEM 1. DESCRIPTION OF BUSINESS GENERAL The Gillette Company was incorporated under the laws of the State of Delaware in 1917 as the successor of a Massachusetts corporation incorporated in 1912 which corporation was the successor of a Maine corporation organized in 1901 by King C. Gillette, inventor of the safety razor. A description of the Company and its businesses appears in the 1995 Annual Report on the inside front cover, at page 2, at pages 3 through 5 under the caption "Letter to Stockholders" and at page 45 under the caption "Principal Divisions and Subsidiaries," the texts of which are incorporated by reference. See also Item 7, "Management's Discussion". BUSINESS SEGMENTS The approximate percentages of consolidated net sales and segment profit from operations during the last five years for each of the Company's business segments appear in the 1995 Annual Report at page 41 under the caption, "Business Segments," and are incorporated by reference. "Financial Information by Business Segment," and "Segment and Area Commentary" containing information on net sales, profit from operations, identifiable assets, capital expenditures and depreciation for each of the last three years, appear in the 1995 Annual Report at page 40 and are incorporated by reference. The Company's businesses range across several industry segments, including blades and razors, toiletries and cosmetics, stationery products, electric shavers, small household appliances, hair care appliances, oral care appliances and oral care products. Descriptions of those businesses appear in the 1995 Annual Report at pages 6 through 15, the text of which is incorporated by reference. DISTRIBUTION In the Company's major markets, traditional Gillette product lines are sold to wholesalers, chain stores and large retailers and are resold to consumers primarily through food, drug, discount, stationery, tobacco and department stores. Jafra skin care products are sold to independent consultants and are resold to consumers, primarily at classes in the home. Waterman and Parker products are sold to wholesalers and retailers and are resold to consumers through fine jewelry, fine stationery and department stores, pen specialists and other retail outlets. Braun products are sold to wholesalers and retailers and are resold to consumers mainly through department, discount, catalogue and specialty stores. In many small Gillette and Braun markets, products are distributed through local distributors and sales agents. Oral-B products are marketed directly to dental professionals for distribution to patients and also are sold to wholesalers, chain stores and large retailers for resale to consumers through food, drug and discount stores, and in smaller markets, through local distributors and sales agents. PATENTS Certain of the Company's patents and licenses in the blade and razor segment are of substantial value and importance when considered in the aggregate. Additionally, the Company holds significant patents in the toiletries and cosmetics, writing instruments, Braun and Oral-B business segments. No patent or license held by the Company is considered to be of material importance when judged from the standpoint of the Company's total business. Gillette has licensed many of its blade and razor patents to other manufacturers. In all of these categories, Gillette competitors also have significant patent positions. The patents and licenses held by the Company are of varying remaining durations. TRADEMARKS In general, the Company's principal trademarks have been registered in the United States and throughout the world where the Company's products are sold. Gillette products are marketed outside the United States under various trademarks, many of which are the same as those used in the United States. The trademark "Gillette" is of principal importance to the Company. In addition, a number of other trademarks owned by the 1
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Company and its subsidiaries have significant importance within their business segments. The Company's rights in these trademarks endure for as long as they are used or registered. COMPETITION The blades and razors segment is marked by competition in product performance, innovation and price, as well as by competition in marketing, advertising and promotion to retail outlets and to consumers. The Company's major competitors worldwide are Warner-Lambert Company, with its Schick and, in North America and Europe, its Wilkinson Sword product lines, and Societe Bic S.A., a French company. Additional competition in the United States and in certain other markets is provided by the American Safety Razor Company, Inc. under its own brands and a number of private label brands, as well as other private label suppliers. The toiletries and cosmetic segment is highly competitive in terms of price, product innovation and market positioning, with frequent introduction of new brands and marketing concepts, especially for products sold through retail outlets, and with product life cycles typically shorter than in the other business segments of the Company. Competition in the stationery products segment, particularly in the writing instruments market, is marked by a high degree of competition from domestic and foreign suppliers and low entry barriers, and is focused on a wide variety of factors including product performance, design and price, with price an especially important factor in the commercial sector. Competition in the electric shaver, small household, hair care and oral care appliances segments is based primarily on product performance, innovation and price, with numerous competitors in the small household and hair care appliances segments. Competition in the oral care product segment is focused on product performance, price and dental profession endorsement. Many of the Company's competitors are larger and have greater resources than the Company. EMPLOYEES At year-end, Gillette employed approximately 33,500 persons, three-quarters of them outside the United States. RESEARCH AND DEVELOPMENT In 1995, research and development expenditures were $153.0 million, compared with $136.9 million in 1994 and $133.1 million in 1993. RAW MATERIALS The raw materials used by Gillette in the manufacture of products are purchased from a number of suppliers, and substantially all such materials are readily available. OPERATIONS BY GEOGRAPHIC AREA [Enlarge/Download Table] The following table indicates the geographic sources of consolidated net sales and profit from operations of the Company for the last three years: 1995 1994 1993 ---------------- ------------------ ---------------- NET NET NET SALES PROFIT SALES PROFIT SALES PROFIT ----- ------ ------ ------- ----- ------ United States............................ 30% 28% 32% 30% 33% 29% Foreign.................................. 70% 72% 68% 70% 67% 71% "Financial Information by Geographic Area" and "Segment and Area Commentary" containing information on net sales, profit from operations and identifiable assets for each of the last three years appear in the 1995 Annual Report under the same captions at page 40 and are incorporated by reference. ITEM 2. DESCRIPTION OF PROPERTY The Company owns and leases manufacturing facilities and other important properties in the United States and abroad consisting of approximately 15,274,000 square feet of floor space, of which 70%, or about 10,652,000 square feet, is devoted to the Company's principal manufacturing operations. Additional premises, 2
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such as sales and administrative offices, research laboratories, and warehouse, distribution and other manufacturing facilities account for about 30% of Gillette's principal property holdings, or about 4,662,000 square feet. Gillette's executive offices are located in the Prudential Center, Boston, Massachusetts, where the Company holds a long-term lease covering approximately 318,000 square feet. [Enlarge/Download Table] In the United States, Gillette's principal manufacturing facilities consist of the following: APPROXIMATE AREA BUSINESS SEGMENT LOCATION (SQUARE FEET) ---------------- -------- ------------- Blades and Razors Boston, Massachusetts 1,560,000 Toiletries and Cosmetics Andover, Massachusetts 593,000 St. Paul, Minnesota 830,000 Westlake Village, California 150,000 Stationery Products Santa Monica, California 320,000 Janesville, Wisconsin 215,000 Oral-B Products Iowa City, Iowa 260,000 --------- Total 3,928,000 ========= Approximately 92% of these U.S. manufacturing facilities and the land they occupy are owned by Gillette. The Santa Monica property is leased in its entirety and 165,000 square feet of the St. Paul facility is located on leased land. Foreign manufacturing subsidiaries of Gillette, other than Braun and Oral-B, operate plants with an aggregate of approximately 4,083,000 square feet of floor space, about 85% of which is on land owned by Gillette. Many of the international facilities are engaged in the manufacture of products for two or more of the Company's major business segments. [Download Table] Braun's executive offices are located in Kronberg, Germany, and the locations and approximate areas of its principal manufacturing facilities are as follows: APPROXIMATE AREA (SQUARE LOCATION FEET) -------- ------------ Germany (3 facilities)............................. 1,386,000 Spain.............................................. 410,000 Ireland............................................ 238,000 Mexico............................................. 282,000 France............................................. 28,000 China.............................................. 67,000 --------- Total.................................... 2,411,000 ========= Approximately 87% of these facilities and 98% of the land they occupy are owned by Braun. Oral-B owns its executive office building in Belmont, California. In addition to its Iowa City plant, it owns or leases approximately 162,500 square feet of manufacturing facilities in two countries outside the United States. Miscellaneous manufacturing operations in North Chicago, Illinois and other locations account for approximately 70,000 square feet. The above facilities are in good repair, adequately meet the Company's needs and operate at reasonable levels of production capacity. 3
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ITEM 3. LEGAL PROCEEDINGS The Company is subject, from time to time, to legal proceedings and claims arising out of its business, which cover a wide range of matters, including antitrust and trade regulation, product liability, contracts, environmental issues, patent and trademark matters and taxes. Management, after review and consultation with counsel, considers that any liability from all of these legal proceedings and claims would not materially affect the consolidated financial position, results of operations or liquidity of the Company. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS Not applicable. ------------------------ 4
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EXECUTIVE OFFICERS OF REGISTRANT [Enlarge/Download Table] Information regarding the Executive Officers of the Company as of March 21, 1996 is set out below. NAME AND CURRENT POSITION FIVE-YEAR BUSINESS HISTORY AGE ------------------------- -------------------------- --- Alfred M. Zeien Chairman of the Board and Chief Executive Officer 66 Chairman of the Board and Chief since February 1991; President and Chief Executive Officer Operating Officer, January 1991 - February 1991; Vice Chairman of the Board, International/Diversified Operations, November 1987 - January 1991 Michael C. Hawley President and Chief Operating Officer since April 58 President and Chief Operating 1995; Executive Vice President, International Officer Group, December 1993 - March 1995; President, Oral-B Laboratories, Inc., May 1989 - November 1993 Joseph E. Mullaney Vice Chairman of the Board since November 1990 62 Vice Chairman of the Board Robert G. King Executive Vice President, International Group 50 Executive Vice President since April 1995; Group Vice President - Latin America, March 1991 - March 1995; General Manager, Gillette de Mexico S.A. de C.V., June 1990 - February 1991 Jacques Lagarde Executive Vice President, Diversified Group since 57 Executive Vice President October 1993; Vice President, February 1990 - September 1993; Chairman, Board of Management, Braun AG, February 1990 - September 1993 Joel P. Davis Senior Vice President, Corporate Planning and 50 Senior Vice President Development since April 1995; Vice President and President, Stationery Products Group, December 1987 - March 1995 Robert E. DiCenso Senior Vice President, Personnel and 55 Senior Vice President Administration, since July 1994; Vice President, Investor Relations, January 1993 - July 1994; Vice President, Finance, Planning and Administration, Diversified Group, July 1988 - December 1992 Thomas F. Skelly Senior Vice President, Finance since May 1980 62 Senior Vice President Charles W. Cramb Vice President and Controller since July 1995; 49 Vice President and Controller Vice President, Finance, Planning and Administration, Diversified Group, October 1992 - June 1995; Vice President, Finance and Strategic Planning, North Atlantic Group, January 1990 - September 1992 The Executive Officers hold office until the first meeting of the Board of Directors following the annual meeting of the stockholders and until their successors are respectively elected or appointed and qualified, unless a shorter period shall have been specified by the terms of their election or appointment, or until their earlier resignation, removal or death. PART II ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED SECURITY HOLDER MATTERS The information required by this item appears in the 1995 Annual Report at page 48 under the caption "common stock" and at page 41 under the caption, "Quarterly Financial Information," and is incorporated by reference. As of March 1, 1996, the record date for the 1996 Annual Meeting, there were 38,867 Gillette stockholders of record. 5
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ITEM 6. SELECTED FINANCIAL DATA The information required by this item appears in the 1995 Annual Report at pages 42 and 43 under the caption, "Historical Financial Summary," and is incorporated by reference. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The information required by this item appears in the 1995 Annual Report at pages 24 through 26 under the caption, "Management's Discussion," and is incorporated by reference. CAUTIONARY STATEMENT From time to time, the Company may make statements which constitute or contain "forward-looking" information as that term is defined in the PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 (the "Act") or by the Securities and Exchange Commission in its rules, regulations and releases. The Company cautions investors that any such forward-looking statements made by the Company are not guarantees of future performance and that actual results may differ materially from those in the forward-looking statements. The following are some of the factors that could cause actual results to differ materially from estimates contained in the Company's forward-looking statements: - the pattern of the Company's sales, including variations in sales volume within periods, which makes forward-looking statements about sales and earnings difficult and may result in variance of actual results from those contained in statements made at any time prior to the period's close; - vigorous competition within the Company's product markets, including pricing and promotional, advertising or other activities in order to preserve or gain market share, the timing of which cannot be foreseen by the Company; - the Company's reliance on the development of new products and the inherent risks associated with new product introductions, including uncertainty of trade and customer acceptance and competitive reaction; - the costs and effects of unanticipated legal and administrative proceedings; - the impacts of unusual items resulting from ongoing evaluations of business strategies, asset valuations and organizational structure; - historically, over two-thirds of the Company's sales having been made outside the United States, making forward-looking statements more difficult; and - the possibility of one or more of the global markets in which the Company competes being impacted by variations in political, economic or other factors, such as currency exchange rates, inflation rates, recessionary or expansive trends, tax changes, legal and regulatory changes or other external factors over which the Company has no control. ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA [Download Table] The following Financial Statements and Supplementary Data for The Gillette Company and Subsidiary Companies appear in the 1995 Annual Report at the pages indicated below and are incorporated by reference. (1) Independent Auditor's Report...................................... Page 27 (2) Consolidated Statement of Income and Earnings Reinvested in the Business for the Years Ended December 31, 1995, 1994 and 1993..... Page 28 (3) Consolidated Balance Sheet at December 31, 1995 and 1994.......... Page 29 (4) Consolidated Statement of Cash Flows for the Years Ended December 31, 1995, 1994 and 1993........................................... Page 30 (5) Notes to Consolidated Financial Statements........................ Pages 31 through 40 (6) Quarterly Financial Information................................... Page 41 6
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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE Not applicable. PART III ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS The information required by this item with respect to the Directors of the Company appears in the 1996 proxy Statement at pages 2 through 4 and at page 7 under the caption "Certain Transactions with Directors and Officers", the texts of which are incorporated by reference. The information required for Executive Officers of the Company appears at the end of Part I of this report at page 5. ITEM 11. EXECUTIVE COMPENSATION The information required by this item appears in the 1996 Proxy Statement at page 8 under the caption "Compensation of Directors", at page 13 under the caption "Incentive Payment and Award" and at pages 13 through 16 under the caption "Executive Compensation" and is incorporated by reference. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT The information required by this item concerning the security ownership of certain beneficial owners and management appears in the 1996 Proxy Statement at pages 6 and 7 under the caption "Stock Ownership of Certain Beneficial Owners and Management" and at page 13 under the caption "Incentive Payment and Award" and is incorporated by reference. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The information required by this item appears in the 1996 Proxy Statement at page 8 under the captions "Certain Transactions with Directors and Officers" and "Compensation of Directors" and is incorporated by reference. 7
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PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENTS, SCHEDULES, AND REPORTS ON FORM 8-K A. FINANCIAL STATEMENTS, SCHEDULES AND EXHIBITS FINANCIAL STATEMENTS [Enlarge/Download Table] The following appear in the 1995 Annual Report at the pages indicated below and are incorporated into Part II by reference. (1) Independent Auditor's Report...................................... Page 27 (2) Consolidated Statement of Income and Earnings Reinvested in the Business for the Years Ended December 31, 1995, 1994 and 1993..... Page 28 (3) Consolidated Balance Sheet at December 31, 1995 and 1994.......... Page 29 (4) Consolidated Statement of Cash Flows for the Years Ended December 31, 1995, 1994 and 1993.................................. Page 30 (5) Notes to Consolidated Financial Statements........................ Pages 31 through 40 SCHEDULES The following schedule appears at page 13 of this report: II. Valuation and Qualifying Accounts Schedules other than those listed above are omitted because they are either not required or not applicable. [Download Table] EXHIBITS 3(a) Composite Certificate of Incorporation of The Gillette Company, as amended, filed as Exhibit 3(a) to The Gillette Company Annual Report on Form 10-K for the year ended December 31, 1989, Commission File No. I-922, incorporated by reference herein. (b) The Bylaws of The Gillette Company, as amended April 15, 1993, filed as Exhibit 3(b) to The Gillette Company Quarterly Report on Form 10-Q for the period ended March 31, 1993, incorporated by reference herein. 4(a) Specimen of form of certificate representing ownership of The Gillette Company Common Stock, $1.00 par value, as adopted by the Board of Directors of the Company on December 15, 1977, filed as Exhibit 4(a) to The Gillette Company Annual Report on Form 10-K for the year ended December 31, 1986, Commission File No. I-922, incorporated by reference herein. (b) Form of Certificate of Designation, Preferences and Rights of Series A Junior Participating Preferred Stock of the Gillette Company filed as Exhibit A to Exhibit 1 to The Gillette Company Current Report on Form 8-K, dated December 30, 1985, Commission File No. I-911, incorporated by reference herein. (c) Rights Agreement dated as of November 26, 1986, and amended and restated as of January 17, 1990, between The Gillette Company and The First National Bank of Boston, filed as Exhibit 1 to The Gillette Company Form 8, dated January 18, 1990, incorporated by reference herein. (d) Renewed Rights Agreement dated as of December 14, 1995 between The Gillette Company and The First National Bank of Boston, filed as Exhibit 4 to The Gillette Company Current Report on Form 8-K, dated December 18, 1995, Commission File No. I-911, incorporated by reference herein. (e) Certificate of Designation of the Series C ESOP Convertible Preferred Stock of The Gillette Company, dated January 17, 1990, filed as Exhibit 4(e) to The Gillette Company Annual Report on Form 10-K for the year ended December 31, 1989, Commission File No. I-922, incorporated by reference herein. 8
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[Download Table] (f) Certificate of Amendment relating to an increase in the amount of authorized shares of preferred stock and common stock, filed as Exhibit 3(i) to The Gillette Company Quarterly Report on Form 10-Q for the period ended March 31, 1995, Commission File No. I-922, incorporated by reference herein. (g) Instruments relating to long-term debt. Multi-year Credit agreement dated as of June 21, 1994 among The Gillette Company and a group of United States and international banks, filed as Exhibit 4(f) to The Gillette Company Annual Report on Form 10-K for the year ended December 31, 1994. Form of $150,000,000 4.75% note due August 15, 1996 issued pursuant to Registration Statement No. 33-54974 of The Gillette Company, filed November 24, 1992, as amended May 14, 1993 and June 24, 1993 and the Trust Indenture filed therewith as Exhibit 4.1, filed as part of Exhibit 4(f) to The Gillette Company Annual Report on Form 10-K for the year ended December 31, 1993, incorporated by reference herein. Form of $150,000,000 6.25% note due August 15, 2003, issued pursuant to Registration Statement No. 33-54974 of The Gillette Company, filed November 24, 1992, as amended May 14, 1993 and June 24, 1993 and the Trust Indenture filed therewith as Exhibit 4.1, filed as part of Exhibit 4(f) to The Gillette Company Annual Report on Form 10-K for the year ended December 31, 1993, incorporated by reference herein. Form of $150,000,000 and $50,000,000 5.75% notes due October 15, 2005, issued pursuant to Registration Statement No. 33-50303 of The Gillette Company, filed September 17, 1993 and the Trust Indenture filed as Exhibit 4.1 to Registration Statement No. 3354974 of The Gillette Company, as amended May 14, 1993 and June 24, 1993, filed as part of Exhibit 4(f) to The Gillette Company Annual Report on Form 10-K for the year ended December 31, 1993, incorporated by reference herein. (Others not filed, but the registrant agrees to file a copy of such instruments upon the request of the Securities and Exchange Commission.) 10 Material Contracts *(a) The Gillette Company 1971 Stock Option Plan, as amended, filed as Exhibit 10(a) to The Gillette Company Annual Report on Form 10-K for the year ended December 31, 1994, incorporated by reference herein. *(b) The Gillette Company Stock Equivalent Unit Plan, as amended, filed as Exhibit 10(b) to The Gillette Company Annual Report on Form 10-K for the year ended December 31, 1993, incorporated by reference herein. *(c) The Gillette Company Incentive Bonus Plan, as amended, filed as Exhibit 10(c) to The Gillette Company Annual Report on Form 10-K for the year ended December 31, 1993, incorporated by reference herein. *(d) The Gillette Company Outside Directors' Stock Ownership Plan, filed as Exhibit 10(d) to The Gillette Company Annual Report on Form 10-K for the year ended December 31, 1993, incorporated by reference herein. *(e) Description of The Gillette Company Executive Life Insurance Program, filed as Exhibit 10(d) to The Gillette Company Annual Report on Form 10-K for the year ended December 31, 1991, Commission File No. I-922, incorporated by reference herein. (f) Directors and Officers and Company Reimbursement Indemnity Insurance and Pension and Welfare Fund Fiduciary Responsibility Insurance policy, filed herewith. *(g) The Retirement Plan for Directors of The Gillette Company, as amended, filed as Exhibit 10(f) to The Gillette Company Annual Report on Form 10-K for the year ended December 31, 1987, Commission File No. I-922, incorporated by reference herein. *(h) The Deferred Compensation Plan for Directors of The Gillette Company, as amended, filed herewith. 9
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[Enlarge/Download Table] (i) Stock Purchase Agreement dated November 24, 1986, between The Gillette Company and a group of entities consisting of Revlon Group Incorporated, MacAndrews & Forbes, Incorporated and certain of their affiliates, filed as Exhibit No. 28.2 to The Gillette Company Current Report on Form 8-K dated November 24, 1986, Commission File No. I-922, incorporated by reference herein. *(j) Description of severance pay and benefit arrangements for employees in the event of a change in control, filed as Exhibit 10(j) to The Gillette Company Annual Report on Form 10-K for the year ending December 31, 1989, Commission File No. I-922, incorporated by reference herein. (k) Letter Agreement, dated July 20, 1989, between The Gillette Company and Berkshire Hathaway Inc., filed as Exhibit 4(a) to The Gillette Company Current Report on Form 8-K, dated July 20, 1989, Commission File No. I-922, incorporated by reference herein. *(l) Description of agreement between The Gillette Company and Robert J. Murray effective January 1, 1996, filed herewith. *(m) Description of agreement between The Gillette Company and Lorne R. Waxlax dated September 30, 1993, filed as Exhibit 10(m) to The Gillette Company Annual Report on Form 10-K for the year ended December 31, 1993, incorporated by reference herein. *(n) Description of The Gillette Company Estate Preservation Plan, filed as Exhibit 10(n) to The Gillette Company Annual Report on Form 10-K for the year ended December 31, 1993, incorporated by reference herein. *(o) Description of The Gillette Company Estate Planning Program, filed as Exhibit 10(o) to The Gillette Company Annual Report on Form 10-K for the year ended December 31, 1993, incorporated by reference herein. *(p) The Gillette Company Supplemental Retirement Plan, as amended and restated June 16, 1994, filed as Exhibit 10(a) to The Gillette Company Annual Report on Form 10-K for the year ended December 31, 1994, incorporated by reference herein. *(q) The Gillette Company Supplemental Savings Plan, as amended and restated effective July 1, 1993, filed as Exhibit 10(r) to The Gillette Company Annual Report on Form 10-K for the year ended December 31, 1994, incorporated by reference herein. 11 Computation of per share earnings, filed herewith. 12 Computation of the ratios of current assets to current liabilities for the years 1995, 1994 and 1993, filed herewith. 13 Portions of the 1995 Annual Report to Stockholders of The Gillette Company incorporated by reference in this Form 10-K, filed herewith. 22 List of subsidiaries of The Gillette Company, filed herewith. 23 Independent Auditors' Consent, filed herewith. 24 Power of Attorney, filed herewith. 27 Financial Data Schedule (not considered to be filed). <FN> --------------- * Filed pursuant to Item 14(c). B. REPORTS ON FORM 8-K The Company filed a Current Report on Form 8-K on December 18, 1995 in connection with a Renewed Rights Agreement dated as of December 14, 1995 between the Company and The First National Bank of Boston. OTHER MATTERS For the purposes of complying with the amendments to the rules governing Form S-8 (effective July 13, 1990) under the Securities Act of 1933, the undersigned registrant hereby undertakes as follows, which undertaking shall be incorporated by reference into the following Registration Statements of the registrant on Form S-8 (1) No. 33-27916, filed April 10, 1989, and amended thereafter, which incorporates by reference 10
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therein Registration Statements on Form S-8 Nos. 2-90276, 2-63951 and 1-50710, and all amendments thereto, all relating to shares issuable and deliverable under The Gillette Company 1971 Stock Option Plan and 1974 Stock Purchase Plan and on Form S-7 No. 2-41016 relating to shares issuable and deliverable under The Gillette Company 1971 Stock Option Plan; (2) No. 33-9495, filed October 20, 1986, and all amendments thereto, relating to shares and plan interests in The Gillette Company Employees' Savings Plan; (3) No. 2-93230, filed September 12, 1984, and all amendments thereto, relating to shares and plan interests in the Oral B Laboratories Savings Plan; (4) No. 33-56218, filed December 23, 1992, relating to shares and plan interests in The Gillette Company Employees' Savings Plan; (5) No. 33-52465, filed March 1, 1994, and all amendments thereto, relating to shares issuable and deliverable under The Gillette Company Global Employee Stock Ownership Plan; (6) No. 33-53257, filed April 25, 1994, and all amendments thereto, relating to shares issuable and deliverable under The Gillette Company Outside Director's Stock Ownership Plan; (7) No. 33-53258, filed April 25, 1994, and all amendments thereto, relating to shares issuable and deliverable under The Gillette Company 1971 Stock Option Plan; (8) No. 33-59125, filed May 5, 1995, and all amendments thereto, relating to shares and plan interests in The Gillette Company Employees' Savings Plan; and (9) No. 33-63707 filed October 26, 1995, and all amendments thereto, relating to shares and plan interests in the Parker Pen 401(K) Plan. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event a claim for indemnification against such liabilities (other than the payments by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer, or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue. 11
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INDEPENDENT AUDITORS' REPORT The Stockholders and Board of Directors of THE GILLETTE COMPANY: Under date of January 23, 1996, we reported on the consolidated balance sheet of The Gillette Company and subsidiary companies as of December 31, 1995 and 1994, and the related consolidated statements of income and earnings reinvested in the business and cash flows for each of the years in the three-year period ended December 31, 1995, as contained in the 1995 Annual Report to Stockholders. These consolidated financial statements and our report thereon are incorporated by reference in the annual report on Form 10-K for the year 1995. In connection with our audits of the aforementioned consolidated financial statements, we also audited the related financial statement schedule listed on page 13 of this report. This financial statement schedule is the responsibility of the Company's management. Our responsibility is to express an opinion on this financial statement schedule based on our audits. In our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein. KPMG PEAT MARWICK LLP Boston, Massachusetts January 23, 1996 12
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THE GILLETTE COMPANY AND SUBSIDIARY COMPANIES SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993 (MILLIONS OF DOLLARS) [Enlarge/Download Table] ADDITIONS DEDUCTIONS --------------------- ---------- BALANCE CHARGED LOSSES BALANCE AT TO CHARGED CHARGED AT BEGINNING PROFIT TO TO END OF DESCRIPTION OF YEAR AND LOSS OTHER RESERVES YEAR ----------- --------- -------- -------- -------- ------- 1995 Reserves deducted from assets: Receivables......................... $52.1 $27.4 $ .8* $ 21.1 $59.2 ===== ===== ===== ====== ===== 1994 Reserves deducted from assets: Receivables......................... $45.9 $22.8 $-- $ 16.6 $52.1 ===== ===== ===== ====== ===== 1993 Reserves deducted from assets: Receivables......................... $41.8 $18.0 $2.5* $ 16.4 $45.9 ===== ===== ===== ====== ===== <FN> * Acquisition balances 13
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SIGNATURES Pursuant to the requirements of Section 13 or 15(d) 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 GILLETTE COMPANY (Registrant) THOMAS F. SKELLY By________________________________ Thomas F. Skelly Senior Vice President and Chief Financial Officer Date: March 21, 1996 Pursuant to the requirement of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. [Enlarge/Download Table] SIGNATURES TITLE DATE ---------- ----- ---- * ALFRED M. ZEIEN Chairman of the Board March 21, 1996 _________________________________________ of Directors, Chief Executive Alfred M. Zeien Officer and Director * MICHAEL C. HAWLEY President, Chief Operating _________________________________________ Officer and Director Michael C. Hawley * JOSEPH E. MULLANEY Vice Chairman of the Board and March 21, 1996 _________________________________________ Director Joseph E. Mullaney THOMAS F. SKELLY Senior Vice President and March 21, 1996 _________________________________________ Chief Financial Officer Thomas F. Skelly * CHARLES W. CRAMB Vice President, March 21, 1996 _________________________________________ Controller and Principal Charles W. Cramb Accounting Officer * WARREN E. BUFFETT Director March 21, 1996 _________________________________________ Warren E. Buffett * WILBUR H. GANTZ Director March 21, 1996 _________________________________________ Wilbur H. Gantz * MICHAEL B. GIFFORD Director March 21, 1996 _________________________________________ Michael B. Gifford * CAROL R. GOLDBERG Director March 21, 1996 _________________________________________ Carol R. Goldberg * HERBERT H. JACOBI Director March 21, 1996 _________________________________________ Herbert H. Jacobi * RICHARD R. PIVIROTTO Director March 21, 1996 _________________________________________ Richard R. Pivirotto * JUAN M. STETA Director March 21, 1996 _________________________________________ Juan M. Steta * ALEXANDER B. TROWBRIDGE Director March 21, 1996 _________________________________________ Alexander B. Trowbridge * JOSEPH F. TURLEY Director March 21, 1996 _________________________________________ Joseph F. Turley THOMAS F. SKELLY By__________________________________ Thomas F. Skelly as Attorney-In-Fact 14

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