11-K
1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994
Registration number 33-52465
A. Full title of the plan:
THE GILLETTE COMPANY
GLOBAL EMPLOYEE STOCK OWNERSHIP PLAN
B. Name of the issuer of the securities held pursuant to the plan and
the address of its principal executive office:
The Gillette Company
Prudential Tower Building
Boston, MA 02199
Financial Statements of The Gillette Company
Global Employee Stock Ownership Plan
The following audited financial statements are enclosed with this report:
Statement of Net Assets Available for Plan Benefits as of
December 31, 1994.
Statement of Changes in Net Assets Available for Plan Benefits for
the Period from June 1, 1994 to December 31, 1994.
Exhibits
23.1 Independent Auditors' Report
23.2 Independent Auditors' Consent
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
I attest that I am a member of the Administrative Committee of The
Gillette Company Global Employee Stock Ownership Plan and, being
duly authorized thereunder, sign this Annual Report on its behalf.
The Gillette Company Global
Employee Stock Ownership Plan
BY JOSEPH E. MULLANEY
Joseph E. Mullaney
Date: March 28, 1995
EX-23
2
Exhibit 23.1
THE GILLETTE COMPANY
GLOBAL EMPLOYEE STOCK OWNERSHIP PLAN
Financial Statements
December 31, 1994
(With Independent Auditors' Report Thereon)
Independent Auditor's Report
The Administrative Committee
The Gillette Company Global Employee Stock Ownership Plan:
We have audited the statement of net assets available for plan benefits of
The Gillette Company Global Employee Stock Ownership Plan as of December
31, 1994 and the related statement of changes in net assets available for
plan benefits for the period from June 1, 1994 to December 31, 1994. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining on a test basis,
evidence supporting the amounts and disclosures in the financial statements.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the net assets available for plan benefits as of
December 31, 1994 and the changes in net assets available for plan benefits
for the period from June 1, 1994 to December 31, 1994, in conformity with
generally accepted accounting principles.
March 15, 1995
THE GILLETTE COMPANY
GLOBAL EMPLOYEE STOCK OWNERSHIP PLAN
Statement of Net Assets Available for Plan Benefits
December 31, 1994
Assets:
Investment in The Gillette Company common stock (at market value) $ 1,526,887
Cash 248
Employee contributions receivable 212,119
Employer contributions receivable 64,997
Net assets available for plan benefits $ 1,804,251
See accompanying notes to financial statements.
THE GILLETTE COMPANY
GLOBAL EMPLOYEE STOCK OWNERSHIP PLAN
Statement of Changes in Net Assets Available for Plan Benefits
For the period from June 1, 1994 to December 31, 1994
Additions to net assets attributed to:
Investment income:
Dividends on The Gillette Company common stock $ 3,178
Realized gains on investments sold 378
Unrealized appreciation in the market value of investments 67,414
70,970
Contributions:
Employee 1,339,168
Employer 400,468
1,739,636
Total additions 1,810,606
Deductions from net assets attributed to:
Benefit payments 6,355
Net increase 1,804,251
Net assets available for plan benefits:
Beginning of period -
End of period $ 1,804,251
See accompanying notes to financial statements.
THE GILLETTE COMPANY
GLOBAL EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
December 31, 1994
(1)Description of the Plan
The Gillette Company Global Employee Stock Ownership Plan (the "Plan")
is a defined contribution plan sponsored by The Gillette Company (the
"Company"). The following provides only general information. Participants
should refer to the Plan document for a more complete description of the
Plan's provisions.
GENERAL
The Plan was adopted by the Board of Directors of the Company on December
16, 1993 to become effective June 1, 1994. Its goal is to provide eligible
Gillette employees the opportunity to purchase common stock of the Company
through payroll deduction and Company contributions. All Plan assets are
held by the Plan Fiduciary, Banque Internationale a' Luxembourg (the
"Fiduciary"). Buck Consultants has been appointed to serve as record
keeper for the Plan.
ELIGIBILITY
Employees eligible to participate in the Plan include all regular employees
of participating subsidiaries of the Company with the exception of employees
considered to be an executive, officer, director, or 10% shareholder of the
Company and employees eligible for a savings plan maintained in the United
States, Canada, or Puerto Rico. Eligible employees may enroll in the Plan
on the first day of each calendar quarter and on the initial participation
date for each participating subsidiary.
CONTRIBUTIONS
Eligible employees may contribute 2% to 10% of their compensation to the
Plan through payroll deductions. A participating employee may change the
rate of their contribution once each calendar quarter.
Employer contributions are made to the accounts of participants who are
contributing to the Plan in amounts equal to 1% of participant's eligible
pay.
INVESTMENTS
All employee and employer contributions are converted into U.S. dollars and
then invested in shares of the Company stock generally on the 15th day of
each month (or if that date is not a business day, the next preceding
business day). Sales of Company stock are made generally on the last
business day of each month end and subsequently converted into the
applicable local currencies to pay Plan benefits. Any dividends on shares
of the Company stock are invested in additional shares of the Company stock.
VESTING
Participants are immediately vested in all shares of Company stock credited
to their respective Plan accounts.
BENIFIT PAYMENTS
Distributions of account balances will be made when the employment of a
participant ceases unless upon retirement, the participant's account is
credited with at least 100 shares of Company stock and the participant
elects to defer payment. If an election is made to defer the distribution,
each retiree may make up to two requests a year for distributions of all
or a portion of their account balance.
PAGE 2
THE GILLETTE COMPANY
GLOBAL EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
For those retirees who do not elect to defer payment and for all other
participants who terminate employment for reasons other than retirement,
a distribution of Plan benefits is made in the form of a lump sum payment.
All distributions are made in cash, unless the participant elects to
receive the benefit payment in the form of shares of the Company common
stock; however, in the event of a participant or retiree's death, all
distributions will be made in the form of a lump sum cash payment.
While employed, a participant may elect to take up to two in-service
withdrawals from their account balances during a calendar year. Shares
purchased with Company contributions and dividends thereon are not
eligible for in-service withdrawal until 24 months from their date of
purchase.
Plan Expenses
Brokerage commissions, fees and other security transaction costs are paid
by participants as part of the purchase and sale of Company Stock.
All contributions and cash dividends awaiting investment are held in an
interest bearing account maintained by the Plan Fiduciary. Any interest
earned on the account will be used to pay administrative expenses of the
Plan. Any remaining costs of administering the Plan are allocated and
paid by the Company subsidiaries participating in the Plan.
(2) Summary of Significant Accounting Policies
Basis of Presentation
The accompanying financial statements are presented on the accrual basis
of accounting. Investments
Investments in the Company common stock are stated at fair value, based
on the composite closing price of the stock on the New York Stock
Exchange as reported by Reuters. Purchases and sales of the Company
common stock are recorded on trade date (the date the order to buy or
sell is executed).
Dividend income is recorded on the ex-dividend date net of any U.S.
withholding taxes. Realized gains and losses are based upon the
identified cost method.
Cash
Amounts shown as cash reflect foreign cash balances held by the Fiduciary
that are to be invested in Company stock in the following month. The
balances have been translated into U.S. dollars using the effective
exchange rates as of December 31, 1994.
Contributions Receivable
Contributions held at the participating subsidiaries and pending transfer
to the Fiduciary have been translated into U.S. dollars using the
effective exchange rates as of December 31, 1994.
PAGE 3
THE GILLETTE COMPANY
GLOBAL EMPLOYEE STOCK OWNERSHIP PLAN
Notes to Financial Statements
(3) Investment in Gillette Company Stock
Investments held by the Plan at December 31, 1994 were as follows;
Cost Market
The Gillette Company Stock (20,427 shares) $ 1,459,474 1,526,887
The realized gains on investments in The Gillette Company Stock were
determined as follows:
Proceeds on sales of investments $ 6,345
Cost of investments sold 5,967
$ 378
(4) Plan Participants
As of December 31, 1994 the Plan had 1,599 participants employed at
Company subsidiaries located in Germany, the United Kingdom, Switzerland,
Austria and New Zealand.
(5) Plan Amendment and Termination
Although the Company intends to continue the Plan indefinitely, it reserves
the right on behalf of itself and its participating subsidiaries to modify
or terminate the Plan at any time; however, the Plan may not be amended
to adversely affect the rights of participants with respect to shares
previously credited to their accounts.
In the event of termination, the assets held by the Plan Fiduciary may
continue to be held subject to the provisions of the Plan, or at the
direction of the Board of Directors of the Company, the assets of the
Plan may be distributed to the participants.
(6) Tax Status
The Plan is not qualified under Section 401(a) of the Internal Revenue
Code, and is exempt from the provisions of Title I of ERISA pursuant to
Section 4(b)(4) thereof. The Company believes that the Fiduciary should
be viewed as a directed custodian and that, for U.S. tax purposes, the
participating employees should be treated as the owners of the shares
of Company stock held for their account under the Plan.
The Company has applied to the Internal Revenue Service for rulings on the
withholding of U.S. taxes on dividends paid by the Company with respect
to the shares of Company stock held under the Plan and on related matters.
(7) Subsequent Events
From December 31, 1994 through the date of this report, Company subsidiaries
in Chile, Peru, and Singapore commenced participation in the Plan.
EX-23
3
Exhibit 23.2
Consent of Independent Auditors
The Gillette Company Global
Employee Stock Ownership Plan:
We consent to the incorporation by reference in the registration statement
No. 33-52465 on Form S-8 of The Gillette Company Global Employee Stock
Ownership Plan of our report dated March 15, 1995, relating to the statement
of net assets available for plan benefits of The Gillette Company Global
Employee Stock Ownership Plan as of December 31, 1994 and the related
statement of changes in net assets available for plan benefits for the
period from June 1, 1994 to December 31, 1994, which report appears in the
December 31, 1994 annual report on Form 11-K of The Gillette Company Global
Employee Stock Ownership Plan.
KPMG Peat Marwick LLP
Boston, Massachusetts
March 28, 1995