Document:

exv10w5

 

Exhibit 10.5

THE CLOROX COMPANY

2005 STOCK INCENTIVE PLAN

PERFORMANCE SHARE AWARD AGREEMENT

NOTICE
OF PERFORMANCE SHARE GRANT

The Clorox Company (the “Company”) grants to the Grantee named below, in accordance with the terms
of The Clorox Company 2005 Stock Incentive Plan (the “Plan”) and this performance share award
agreement (the “Agreement”), the following number of Performance Shares on the terms set forth
below:

	 	 	 	 	 
	 

	 	GRANTEE:
	 	«First_Name» «Last_Name»
	 

	 	TARGET AWARD:
	 	«SHARES_GRANTED»
	 

	 	PERFORMANCE PERIOD:
	 	[July 1, 200___through June 30, 200_]
	 

	 	DATE OF GRANT:	 	 
	 

	 	SERIES NUMBER:
	 	«SERIES_NUMBER»
	 

	 	SETTLEMENT DATE
	 	Within 75 days following the last day of the
Performance Period, 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 below)

AGREEMENT

	 	1.	 	Grant of Performance Shares. The Company hereby grants to the Grantee the
Target Award set forth above, payment of which is dependent upon the achievement of certain
performance goals more fully described in Section 3 of this Agreement. This Award is
subject to the terms, definitions and provisions of the Plan and this Agreement. All
terms, provisions, and conditions applicable to the Performance Shares 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.	 	Nature and Settlement of Award. The Performance Shares awarded pursuant to
this Agreement represent the opportunity to receive Shares of the Company, and Dividend
Equivalents on such Shares. Except for Dividend Equivalents, which are paid in cash
pursuant to Section 4 of this Agreement, Performance Shares shall be settled in Shares.
The Company shall deliver to the Participant one Share for each Performance Share earned,
less any Shares withheld in accordance with the provisions of Section 7 of this Agreement.
Settlement shall occur on a date chosen by the Committee, which date shall be within
seventy-five (75) days following the last day of the Performance Period, or any deferred
settlement date established pursuant to Section 6 below, whichever is later (the
“Settlement Date”), and except as specifically provided in Section 5 of this Agreement,
provided the Grantee has remained in the employment or service of the Company or its
Subsidiaries through the Settlement Date.
	 
	 	3.	 	Determination of Number of Performance Shares Earned.

	 	a.	 	The number of Performance Shares earned, if any, for the period
commencing [July 1, 200___and ending June 30, 200_] (the “Performance Period”) shall
be determined in accordance with the following formula:

# of Performance Shares = Payout Percentage X Target Award

	 	 	 	The “Payout Percentage” is based on the return on invested capital of the Company
(calculated as described in paragraph b. below, the “ROIC”) at the end of the
Performance Period, determined in accordance with the following table:

 

 

	 	 	 
	 	 	Payout
	 	 	Percentage (% of
	     ROIC	 	Target Award)
	is less than 
	 	0%
	= 
	 	50%
	= 
	 	75%
	= 
	 	100%
	= 
	 	125%
	>= 
	 	150%

Interim percentages to be interpolated.

	 	 	 	Notwithstanding the above, the Committee shall have the discretion to adjust the ROIC
levels set forth in the above table, and may condition the determination of the
number of Performance Shares earned under this paragraph a. upon the satisfaction of
the adjusted ROIC levels, as determined by the Committee in its sole and absolute
discretion, including discretion to adjust the number of Performance Shares earned to
reflect the occurrence of extraordinary or unusual or non-recurring events or such
other special circumstances as the Committee may deem appropriate. All Performance
Shares that are not earned for the Performance Period shall be forfeited.
	 
	 	b.	 	ROIC shall be calculated as net operating profit after taxes divided by
average operating capital (based on 5-point average) averaged over the Performance
Period, as determined by the Committee.

	 	4.	 	Dividend Equivalent Rights. Dividend Equivalents shall be earned with respect
to any Performance Shares issued to the Grantee pursuant to this Award. Dividend
Equivalents will be paid to the Grantee on dividend payment dates commencing on or after
the Date of Grant until the latest to occur of the following: (i) the settlement of the
Performance Shares or (ii) the forfeiture of unearned Performance Shares.
	 
	 	5.	 	Termination of Continuous Service. Except as otherwise provided below, 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 Shares subject to this Agreement 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
Shares shall immediately vest and will be paid upon completion of the Performance
Period 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 and is more than twelve (12) months from
the Date of Award set forth in this Agreement, the Performance Shares shall vest on
a pro rata monthly basis, including full credit for partial months elapsed, and
will be paid upon completion of the Performance Period 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 may be computed
under the following formula: Target Award times (number of full months elapsed in
Performance Period divided by number of full months in Performance Period) times
percent performance level achieved as of the end of the Performance Period.
	 
	 	c.	 	Definition of “Retirement.” For purposes of this Agreement,
the term “Retirement” shall mean termination of employment or service as an
Employee after (i) twenty (20) or more years of “vesting service” as defined in The
Clorox Company Pension Plan (“Vesting Service”), or (ii) attaining age fifty-five
with ten (10) or more years of Vesting Service.

	 	6.	 	Election to Defer Settlement. On or before [September 15, 200_], Grantee may
elect to defer the settlement of the Performance Shares from the last day of the
Performance Period until a date at least two years following such date, or until Grantee’s
later termination of employment or service. If Grantee makes such an election, it will
become irrevocable on the date of such election. If Grantee makes such an election,
Grantee will continue

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	 	 	 	to receive Dividend Equivalents on any Performance Shares until the settlement date. If
Grantee makes such an election, but a transaction occurs that subjects Grantee’s Performance
Shares to Section 19 of the Plan prior to the settlement date, Grantee’s deferral election
will terminate and Grantee’s Performance Shares 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 delivery 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). 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.	 	Transferability of Performance Shares. Performance Shares shall not be
transferable by the Grantee other than by will or by the laws of descent or distribution.
For avoidance of doubt, Shares issued to the Grantee in settlement of Performance Shares
pursuant to Section 2 of this Agreement shall not be subject to any of the foregoing
transferability restrictions.
	 
	 	9.	 	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
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 Continuing Non-Conflicting
Employment. In partial consideration for the award of these Performance
Shares, the Grantee agrees that the Grantee’s right to the Shares upon settlement
of the Performance Shares 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

3

 

	 	 	 	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 Performance Shares,
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. THE GRANTEE UNDERSTANDS THAT THIS PARAGRAPH IS
NOT INTENDED TO AND DOES NOT PROHIBIT THE GRANTEE FROM RENDERING SERVICES TO A
CONFLICTING ORGANIZATION, BUT PROVIDES FOR THE FORFEITURE OF THE PERFORMANCE SHARES
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 TERM OF THE
PERFORMANCE PERIOD OR WITHIN ONE (1) YEAR THE SETTLEMENT DATE. 
	 
	 	c.	 	No Interference or Solicitation. In partial consideration for
the award of these Performance Shares and to forestall the disclosure or use of
Confidential Information, the Grantee agrees that for a period of one (1) year
after the date of settlement of the Performance Shares, 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 Performance Period or at any time within
one (1) year after the Settlement Date, the Grantee breaches his/her obligation not
to Interfere or Solicit, the Performance Shares, 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.
	 
	 	d.	 	Injunctive and Other Available Relief. By acceptance of these
Performance Shares, the Grantee acknowledges that, if the Grantee 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.

	 	12.	 	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 Shares have been settled and
Share certificates have been issued to the Grantee, 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.
	 
	 	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 Agreement for construction or
interpretation.

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	 	g.	 	Interpretation. Any dispute regarding the interpretation of
this Agreement 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.
	 
	 	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:	 	 	 	 
	 

	 	 	 	 

	 	 
	 
	 	 	 	 	 	 
	 

	 	Its:
	 	CEO and President	 	 

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GRANTEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF THE PERFORMANCE SHARES PURSUANT TO THIS
AGREEMENT IS EARNED ONLY BY CONTINUING EMPLOYMENT 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. GRANTEE FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, NOR
IN THE PLAN SHALL CONFER UPON GRANTEE ANY RIGHT WITH RESPECT TO CONTINUATION OF EMPLOYMENT BY THE
COMPANY, NOR SHALL IT INTERFERE IN ANY WAY WITH GRANTEE’S RIGHT OR THE COMPANY’S RIGHT TO TERMINATE
GRANTEE’S EMPLOYMENT AT ANY TIME, WITH OR WITHOUT CAUSE.

Grantee acknowledges receipt of a copy of the Plan and represents that he or she is familiar with
the terms and provisions thereof, and hereby accepts this Agreement subject to all of the terms and
provisions thereof. Grantee 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 the Agreement. Grantee 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. Grantee further agrees to notify the Company upon any change in the residence address
indicated below.

	 	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	Signed:
	 	 	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	Grantee	 	 

	 	 	 	 	 
	 

	 	Residence Address:
	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

6exv10w6

 

Exhibit 10.6

THE CLOROX COMPANY

2005 STOCK INCENTIVE PLAN

RESTRICTED STOCK AWARD AGREEMENT

SUMMARY OF RESTRICTED STOCK GRANT

The Clorox Company, a Delaware company (the “Company”), grants to the Grantee named below, in
accordance with the terms of The Clorox Company 2005 Stock Incentive Plan (the “Plan”) and this
restricted stock award agreement (the “Agreement”), the following number of shares of Restricted
Stock, on the terms set forth below:

	 	 	 
	GRANTEE

	 	— (refer to Equiserve account for details)
	TOTAL RESTRICTED SHARES AWARDED

	 	  — (refer to Equiserve account for details)
	DATE OF AWARD

	 	— (refer to Equiserve account for details)
	PERIOD OF RESTRICTION

	 	Subject to the Plan and the Agreement
attached hereto, the Period of Restriction
shall lapse, and Shares shall vest and
become free of the forfeiture and transfer
restrictions contained in the Agreement,
on the third (3rd) anniversary of the Date
of Award.

TERMS OF AGREEMENT

	 	1.	 	Grant of Restricted Stock. The Company hereby grants to the Grantee the total
number of shares of Restricted Stock (the “Shares”) set forth above, subject to the terms,
definitions and provisions of the Plan and this Agreement. All terms, provisions, and
conditions applicable to the Shares 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.	 	Restrictions and Their Release.

	 	a.	 	Restrictions. Except as otherwise provided in the Plan and
this Agreement, the Grantee may not sell, assign, pledge, exchange, transfer,
hypothecate or encumber any Shares subject to this Award until the Period of
Restriction set forth above shall lapse (the “Restrictions”).
	 
	 	b.	 	Custody, Dividends and Voting Rights. 

	 	i.	 	As soon as practicable following the grant of
Restricted Stock, the Shares of Restricted Stock shall be registered in
the Grantee’s name in certificate or book-entry form. If a certificate
is issued, it shall bear an appropriate legend referring to the
restrictions and it shall be held by the Company, or its agent, on behalf
of the Grantee until the Period of Restriction has lapsed or otherwise
been satisfied. If the Shares are registered in book-entry form, the
restrictions shall be placed on the book-entry registration. The Grantee
may also be required to execute and return to the Company a blank stock
power for each Restricted Stock certificated (or instruction letter, with
respect to the Shares registered in book-entry form), which will permit
transfer to the Company, without further action, of all or any portion of
the Restricted Stock that is forfeited in accordance with this Agreement.
	 
	 	ii.	 	Except for the transfer restrictions, and subject
to such other restrictions, if any, as determined by the Committee, the
Grantee shall have all other rights of a holder of Shares, including the
right to receive dividends paid (whether in cash or property) with
respect to the Restricted Stock and the right to vote (or to execute
proxies for voting) such Shares. If all or part of a dividend in respect
of the Restricted Stock is paid in Shares or any other security issued by
the Company, such Shares or other securities shall

 

 

	 	 	 	be held by the Company subject to the same restrictions as the Restricted
Stock in respect of which the dividend was paid.

	 	c.	 	Release of Restrictions. Upon the lapse of the Period of
Restriction, the Shares will be released from the Restrictions. The Company or its
designee will notify the Grantee in advance of the release of Restrictions and make
arrangements for the form in which the released Shares will be issued to the
Grantee.
	 
	 	d.	 	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 delivery 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 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 Grantee, and shall be subject to any restrictions or limitations that the
Committee, in its sole discretion, deems appropriate.

	 	3.	 	Termination of Employment or Service.

	 	a.	 	If the Grantee’s employment or service with the Company and its
Subsidiaries is terminated for any reason, any Shares not released from the
Restrictions before such termination of employment or service shall be forfeited.
Notwithstanding the above, if the Grantee’s termination of employment or service is
due to death or Disability, the Shares of Restricted Stock shall become 100% vested
and the Restrictions on the Shares shall lapse as of such termination date.
	 
	 	b.	 	Definition of “Disability.” For purposes of this Agreement, 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.

	 	4.	 	Authorization to Return Forfeited Shares. The Grantee authorizes the Company
or its designee to return to the Company all Shares which are forfeited pursuant to the
provision of this Agreement or the Plan.
	 
	 	5.	 	Section 83(b) Election. The Grantee acknowledges receipt of information
concerning the Grantee’s right within thirty days from the date on the letter transmitting
this Agreement to the Grantee to make an election, pursuant to Section 83(b) of the
Internal Revenue Code, to pay income tax currently rather than when the Shares are released
from Restrictions. The Grantee agrees that s/he will notify the Company immediately if
such a Section 83(b) election is made.
	 
	 	6.	 	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, any Shares subject to
Restrictions shall become 100% vested and the Restrictions on the Shares shall lapse,
unless the Shares are 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, the Period of Restriction on any replacement awards shall lapse. 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 Grantee.
	 
	 	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.

2

 

	 	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 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 Continuing Non-Conflicting
Employment. In partial consideration for the award of these Shares, the
Grantee agrees that the Grantee’s right to the Shares is contingent upon the
Grantee refraining, during the Period of Restriction and for a period of one (1)
year after the date of release of Restrictions, 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 release of
Restrictions, the Grantee shall render services to any Conflicting Organization
other than as expressly permitted herein, the Shares, whether vested or not, will
be immediately forfeited, 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 THAT THIS PARAGRAPH IS NOT INTENDED TO AND DOES NOT
PROHIBIT THE GRANTEE FROM RENDERING SERVICES TO A CONFLICTING ORGANIZATION, BUT
PROVIDES FOR THE FORFEITURE OF THE SHARES 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 RELEASE OF
RESTRICTIONS.
	 
	 	c.	 	No Interference or Solicitation. In partial consideration for
the award of these Shares and to forestall the disclosure or use of Confidential
Information, the Grantee agrees that during the Period of Restriction and for a
period of one (1) year after the date release of Restrictions, 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 (1) year after the termination of such
person’s employment with the Company or any Affiliated Company (collectively,
“Solicit”). If, during the Period of Restriction or at any time within one (1)
year after the date of release of

3

 

	 	 	 	Restrictions, the Grantee breaches his/her obligation not to Interfere or Solicit,
the Shares, whether vested or not, will be immediately forfeited, and the Grantee
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 these
Shares, the Grantee acknowledges that, if the Grantee 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.

	 	8.	 	Miscellaneous Provisions.

	 	a.	 	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.
	 
	 	b.	 	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.
	 
	 	c.	 	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.
	 
	 	d.	 	References to Plan. All references to the Plan shall be deemed
references to the Plan as may be amended.
	 
	 	e.	 	Headings. The captions used in this Agreement are inserted for
convenience and shall not be deemed a part of this Agreement for construction or
interpretation.
	 
	 	f.	 	Interpretation. Any dispute regarding the interpretation of
this Agreement 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.
	 
	 	g.	 	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:
	 	President and CEO	 	 
	 

	 	 	 	 	 	 

4

 

THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE RELEASE OF RESTRICTION ON THE SHARES PURSUANT TO THIS
AGREEMENT IS EARNED ONLY BY CONTINUING EMPLOYMENT AT THE WILL OF THE COMPANY (NOT THROUGH THE ACT
OF BEING HIRED, BEING GRANTED THIS AWARD OR ACQUIRING SHARES HEREUNDER). THE GRANTEE FURTHER
ACKNOWLEDGES AND AGREES THAT NOTHING IN THIS AGREEMENT, 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, WITH OR WITHOUT CAUSE.

The Grantee 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 Grantee 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 Grantee
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 Grantee
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 Grantee 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 Grantee further agrees to
notify the Company upon any change in the residence address indicated below.

	 	 	 	 	 	 	 	 	 	 	 
	 

	   Dated:
	 	 	 	 	Signed:
	 	 	 	 
	 

	 	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	Grantee	 	 

	 	 	 	 	 
	 

	 	Residence Address:
	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 

5

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