exv10w2



 





Exhibit 10.2




THE CLOROX COMPANY

2005 STOCK INCENTIVE PLAN

NONQUALIFIED STOCK OPTION AWARD AGREEMENT



NOTICE OF STOCK OPTION GRANT



The Clorox Company, a Delaware company (the “Company”), grants to the Optionee named below an
option (the “Option”) to purchase, in accordance with the terms of The Clorox Company 2005 Stock
Incentive Plan (the “Plan”) and this nonqualified stock option agreement (the “Agreement”), the
number of shares of Common Stock of the Company (the “Shares”) at the exercise price per share (the
“Exercise Price”) set forth as follows:




	 	 	 
	OPTIONEE
	 	 
	OPTIONS GRANTED
	 	 
	GRANT CODE
	 	 
	EXERCISE PER SHARE
	 	 
	DATE OF GRANT
	 	 
	EXPIRATION DATE

	 	Ten years from Date of Grant
	VESTING SCHEDULE

	 	25% on each of the first four anniversaries of
	 

	 	the Date of Grant






AGREEMENT





	 	1.	 	Grant of Option. The Company hereby grants to the Optionee the Option to
purchase the Shares at the Exercise Price, subject to the terms, definitions and provisions
of the Plan and this Agreement. All terms, provisions, and conditions applicable to the
Option 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 this Agreement
and not otherwise defined herein shall have the meanings ascribed to them in the Plan.
	 
	 	2.	 	Exercise of Option.






	 	a.	 	Right to Exercise. This Option shall be exercisable prior to
the expiration date set forth above (the “Expiration Date”), in accordance with the
vesting schedule set forth above (the “Vesting Schedule”) and with the applicable
provisions of the Plan and this Agreement. Except as otherwise specifically
provided in this Agreement, in no event may this Option be exercised after the
Expiration Date.
	 
	 	b.	 	Method of Exercise. This Option shall be exercisable only by
delivery of an exercise notice (printable from the Clorox Web at
http://CLOROXWEB/hr/stock/ or available from the Company’s designee) (the “Exercise
Notice”) which shall state the election to exercise the Option, the whole number of
Shares in respect of which the Option is being exercised and such other provisions
as may be required by the Committee. Such Exercise Notice shall be signed by the
Optionee and shall be delivered by mail or fax, to the Company’s designee
accompanied by payment of the Exercise Price. The Company may require the Optionee
to furnish or execute such other documents as the Company shall reasonably deem
necessary (i) to evidence such exercise and (ii) to comply with or satisfy the
requirements of the Securities Act of 1933, as amended, the Exchange Act, or any
Applicable Laws. The Option shall be deemed to be exercised upon receipt by the
Company’s designee of such written notice accompanied by the Exercise Price.
	 
	 	 	 	No Shares will be issued pursuant to the exercise of the Option unless such issuance
and such exercise shall comply with all Applicable Laws. Assuming such compliance,
for income tax purposes, the Shares shall be considered transferred to the Optionee
on the date on which the Option is exercised with respect to such Shares.




 









 












	 	c.	 	Taxes. Pursuant to Section 16 of the Plan, the Committee shall
have the power and the right to deduct or withhold, or require the Optionee to
remit to the Company, an amount sufficient to satisfy any applicable tax
withholding requirements applicable to this Option. The Committee may condition
the delivery of Shares upon the Optionee’s satisfaction of such withholding
obligations. The Optionee 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). Such election shall be irrevocable, made
in writing, signed by the Optionee, and shall be subject to any restrictions or
limitations that the Committee, in its sole discretion, deems appropriate.






	 	3.	 	Method of Payment. Pursuant to Section 6(f) of the Plan and subject to such
limitations as the Committee may impose (including prohibition of one or more of the
following payment methods), payment of the Exercise Price may be made in cash or by check,
Shares or a combination thereof.
	 
	 	4.	 	Termination of Employment or Service and Expiration of Exercise Period.






	 	a.	 	Termination of Employment or Service. If the Optionee’s
employment or service with the Company and its Subsidiaries is terminated, the
Optionee may exercise all or part of this Option prior to the expiration dates set
forth in paragraph b. herein, but only to the extent that the Option had become
vested before the Optionee’s employment or service terminated. Notwithstanding the
above, if the Optionee’s termination of employment or service (i) is due to
Retirement and is more than 12 months from the Date of Grant set forth in this
Agreement, or (ii) is due to death or Disability, the Option shall become 100%
vested and shall remain exercisable until the expiration dates determined pursuant
to paragraph b. of this Section.
	 
	 	 	 	When the Optionee’s employment or service with the Company and its Subsidiaries
terminates (except when due to Retirement, death or Disability), this Option shall
expire immediately with respect to the number of Shares for which the Option is not
yet vested. If the Optionee dies after termination of employment or service, but
before the expiration of the Option, all or part of this Option may be exercised
(prior to expiration) by the personal representative of the Optionee or by any
person who has acquired this Option directly from the Optionee by will, bequest or
inheritance, but only to the extent that the Option was vested and exercisable upon
termination of the Optionee’s employment or service.
	 
	 	b.	 	Expiration of Exercise Period. Upon termination of the
Optionee’s employment or service with the Company and its Subsidiaries, the Option
shall expire on the earliest of the following occasions:






	 	i.	 	The Expiration Date, except as provided in
subparagraph iii below;
	 
	 	ii.	 	The date ninety (90) days following the termination
of the Optionee’s employment or service for any reason other than Cause,
death, Disability, or Retirement;
	 
	 	iii.	 	The date one year following the termination of the
Optionee’s employment or service due to death or Disability;
	 
	 	iv.	 	The date five (5) years following the termination
of the Optionee’s employment or service due to Retirement, provided the
Optionee’s Retirement is more than 12 months from the Date of Grant set
forth in this Agreement; or
	 
	 	v.	 	The date of termination of the Optionee’s
employment or service for Cause.






	 	c.	 	Definition of “Retirement.” For purposes of this Agreement,
the Optionee’s employment or service shall be deemed to have terminated due to
“Retirement” if the Optionee terminates employment or service as an Employee for
any reason, including Disability (but other than for Cause) after (i) twenty (20)
or more years of “vesting service” as defined in The Clorox Company




2









 






	 	 	 	Pension Plan (“Vesting Service”), or (ii) attaining age fifty-five (55) with ten
(10) or more years of Vesting Service.
	 
	 	d.	 	Definition of “Disability.” For purposes of this Agreement,
the Optionee’s employment shall be deemed to have terminated due to the Optionee’s
Disability if the Optionee 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 Optionee’s employment.






	 	5.	 	Change in Control. Upon the occurrence of a Change in Control, unless
otherwise specifically prohibited under Applicable Laws or by the rules and regulations of
any governing governmental agencies or national securities exchanges, the Option shall
become 100% vested and immediately exercisable, unless such Option is assumed, converted or
replaced by the continuing entity; provided, however, that in the event the Participant’s
employment is terminated without Cause or by the Participant for Good Reason within
twenty-four (24) months following consummation of a Change in Control, any replacement
awards will become immediately exercisable. For purposes of this Agreement, the term “Good
Reason” shall have the meaning set forth in any employment agreement or severance agreement
or policy applicable to the Optionee.
	 
	 	6.	 	Transferability of Option. This Option shall not be transferable by the
Optionee other than by will or the laws of descent and distribution, and the Option shall
be exercisable during the Optionee’s lifetime only by the Optionee or on his or her behalf
by the Optionee’s guardian or legal representative.
	 
	 	7.	 	Protection of Trade Secrets and Limitations on Exercise.






	 	a.	 	Definitions.






	 	i.	 	“Affiliated Company” means any organization
controlling, controlled by or under common control with the Company.
	 
	 	ii.	 	“Confidential Information” means technical
or business 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 Optionee, 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 Optionee shall have worked during the two
years prior to the Optionee’s termination of employment with the Company
or any Affiliated Company or (2) with respect to which during that period
of time the Optionee, 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 Optionee 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 Continuing Non-Conflicting
Employment. In partial consideration for the award of this Option, the
Optionee agrees that the Optionee’s right to exercise this Option is contingent
upon the Optionee refraining, prior to the expiration of the Option and for a
period of one (1) year after the date of exercise, from rendering services,
directly or indirectly, as director, officer, employee, agent, consultant or
otherwise, to any Conflicting




3









 






	 	 	 	Organization except a Conflicting Organization whose business is diversified and
that, as to that part of its business to which the Optionee renders services, is not
a Conflicting Organization, provided that the Company shall receive separate written
assurances satisfactory to the Company from the Optionee and the Conflicting
Organization that the Optionee shall not render services during such period with
respect to a Conflicting Product. If, prior to the expiration of the Option or at
any time within one (1) year after the date of exercise of all or any portion of the
Option, the Optionee shall render services to any Conflicting Organization other
than as expressly permitted herein, the unexercised portion of the Option, whether
vested or not, will be immediately forfeited and cancelled, and the Optionee shall
immediately return to the Company the Shares or the pre-tax income derived from any
disposition of the Shares. THE OPTIONEE UNDERSTANDS THAT THIS PARAGRAPH IS NOT
INTENDED TO AND DOES NOT PROHIBIT THE OPTIONEE FROM RENDERING SERVICES TO A
CONFLICTING ORGANIZATION, BUT PROVIDES FOR THE FORFEITURE OF THE UNEXERCISED PORTION
OF THE OPTION AND A RETURN TO THE COMPANY OF THE GROSS TAXABLE PROCEEDS OF AN
EXERCISE OF THE OPTION IF THE OPTIONEE SHOULD CHOOSE TO RENDER SUCH SERVICES PRIOR
TO THE EXPIRATION OF THE OPTION OR WITHIN ONE (1) YEAR AFTER EXERCISE.
	 
	 	c.	 	No Interference or Solicitation. In partial consideration for
the award of this Option and to forestall the disclosure or use of Confidential
Information, the Optionee agrees that prior to the expiration of the Option and for
a period of one (1) year after the date of exercise, s/he shall not, for
himself/herself or any third party, directly or indirectly (i) divert or attempt to
divert from the Company (or any Affiliated Company) any business of any kind in
which it is engaged, including, without limitation, the solicitation of its
customers as to Conflicting Products, or interference with any of its suppliers or
customers (collectively, “Interfere”), or (ii) solicit for employment any person
employed by the Company, or by any Affiliated Company, during the period of such
person’s employment and for a period of one year after the termination of such
person’s employment with the Company or any Affiliated Company (collectively,
“Solicit”). If, during the term of the Option or at any time within one (1) year
after the date of exercise of all or any portion of the Option, the Optionee
breaches his/her obligation not to Interfere or Solicit, the unexercised portion of
the Option, whether vested or not, will be immediately forfeited and cancelled, and
the Optionee shall immediately return to the Company the Shares or the pre-tax
income derived from any disposition of the Shares.
	 
	 	d.	 	Injunctive and Other Available Relief. By acceptance of this
Option, the Optionee acknowledges that, if the Optionee were to breach or threaten
to breach his/her obligation hereunder not to Interfere or Solicit, 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.






	 	7.	 	Miscellaneous Provisions. 






	 	a.	 	Rights as a Stockholder. Neither the Optionee nor the
Optionee’s transferee or representative shall have any rights as a stockholder with
respect to any Shares subject to this Option until the Option has been exercised
and Share certificates have been issued to the Optionee, transferee or
representative, as the case may be.
	 
	 	b.	 	Choice of Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of California, excluding any
conflicts or choice of law rule or principle that might otherwise refer
construction or interpretation of this Agreement to the substantive law of another
jurisdiction.
	 
	 	c.	 	Modification or Amendment. This Agreement may only be modified
or amended by written agreement executed by the parties hereto; provided, however,
that the adjustments permitted pursuant to Section 18 of the Plan may be made
without such written agreement.




4









 






	 	d.	 	Severability. In the event any provision of this Agreement
shall be held illegal or invalid for any reason, the illegality or invalidity shall
not affect the remaining provisions of this Agreement, and this Agreement shall be
construed and enforced as if such illegal or invalid provision had not been
included.
	 
	 	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 this Agreement are inserted for
convenience and shall not be deemed a part of this Option for construction or
interpretation.
	 
	 	g.	 	Interpretation. Any dispute regarding the interpretation of
this Agreement shall be submitted by the Optionee 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.
	 
	 	h.	 	Section 409A Compliance. To the extent applicable, it is
intended that the Plan and this Agreement comply with the requirements of Section
409A of the Internal Revenue Code of 1986, as amended (the “Code”) and any related
regulations or other guidance promulgated with respect to such Section by the U.S.
Department of the Treasury or the Internal Revenue Service (“Section 409A”). Any
provision of the Plan or this Agreement that would cause this Award to fail to
satisfy Section 409A shall have no force or effect until amended to comply with
Section 409A, which amendment may be retroactive to the extent permitted by Section
409A.





	 	 	 
	 

	 	THE CLOROX COMPANY
	 
	 	 
	 

	 	By:
	 
	 	 
	 

	 	Title: Chairman and CEO






5









 





THE OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO THE OPTION
HEREOF IS EARNED ONLY BY CONTINUING EMPLOYMENT AT THE WILL OF THE COMPANY (NOT THROUGH
THE ACT OF BEING HIRED, BEING GRANTED THIS OPTION OR ACQUIRING SHARES HEREUNDER). THE
OPTIONEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR IN THE
PLAN, SHALL CONFER UPON THE OPTIONEE ANY RIGHT WITH RESPECT TO CONTINUATION OF
EMPLOYMENT BY THE COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH THE OPTIONEE’S RIGHT
OR THE COMPANY’S RIGHT TO TERMINATE THE OPTIONEE’S EMPLOYMENT AT ANY TIME, WITH OR
WITHOUT CAUSE.



The Optionee acknowledges that a copy of the Plan, Plan Information and the Company’s
Annual Report and Proxy Statement for the fiscal year ended June 30, 2005 (the
“Prospectus Information”) are available for viewing on the Company’s Cloroxweb site at
http://CLOROXWEB/hr/stock/. The Optionee hereby consents to receive the Prospectus
Information electronically, or, in the alternative, to contact the HR Service Center at
1-800-709-7095 to request a paper copy of the Prospectus Information. The Optionee
represents that s/he is familiar with the terms and provisions thereof, and hereby
accepts this Agreement subject to all of the terms and provisions thereof. The Optionee
has reviewed the Plan and this Agreement in their entirety, has had an opportunity to
obtain the advice of counsel prior to executing this Agreement and fully understands all
provisions of this Agreement. The Optionee hereby agrees to accept as binding,
conclusive and final all decisions or interpretations of the Committee upon any
questions arising under the Plan or this Agreement. The Optionee further agrees to
notify the Company upon any change in the residence address indicated below.




	 	 	 	 	 	 	 
	Dated:

	 	 	 	Signed:	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	          Optionee






	 	 	 	 	 
	 

	 	Residence Address:	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	 
	 	 	 	 
	 

	 	 

	 	 







6