Committee Charters

The Clorox Company Board of Directors Committee Charters

Audit Committee Charter

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(Effective November 19, 2014)

Purpose and Authority

The Audit Committee (“Committee”) is established by the Board of Directors (“Board”) for the purposes of:

  1. Representing and assisting the Board in overseeing:
    • The integrity of the Company's financial statements.
    • The independent registered public accounting firm's qualifications and independence.
    • The performance of the Company's internal audit function and independent registered public accounting firm.
    • The Company's systems of disclosure controls and procedures and internal control over financial reporting that management has established.
    • The Company's compliance with legal and regulatory requirements relating to accounting and financial reporting matters.
    • The Company's framework and guidelines with respect to risk assessment and risk management.
    • The Company’s material financial policies and actions.
  2. Preparing the report required by the Securities and Exchange Commission ("SEC") proxy rules to be included in the Company's annual proxy statement.

The Committee will report regularly to the Board regarding the execution of its duties and responsibilities.

The Committee has the authority to engage and terminate, and to approve the fees and other retention terms of, outside legal, accounting or other advisors, and to fully investigate any matter brought to its attention, as deemed appropriate to perform its duties and responsibilities. The Company shall provide appropriate funding, as determined by the Committee, for the Committee's administrative expenses, and for compensation to the independent registered public accounting firm, and to any outside advisors that the Committee chooses to engage.

This Charter shall be reviewed annually and updated as necessary. Additionally, the Committee will perform an annual evaluation of its performance relative to the purpose, duties and responsibilities outlined herein. The Committee may delegate any of its duties and responsibilities to subcommittees composed of its members.

Composition and Meetings

The Committee shall consist of at least three directors appointed by the Board in accordance with the Company’s Bylaws. Each member must be financially literate and independent under the New York Stock Exchange definition of independence for directors and audit committee members and the Company's independence standards set forth in the Company's Corporate Governance Guidelines. In addition, at least one member of the Committee must qualify as an “audit committee financial expert,” as determined by the Board in accordance with criteria established by the SEC. No member of the Committee shall simultaneously serve on the audit committees of more than two other public companies, unless the Board determines that such service will not impair such member’s ability to serve on the Committee.

The Board, by majority vote of those directors present, may remove a member of the Committee without cause or appoint a director to serve on the Committee at any duly noticed meeting of the Board.

The Committee will meet at least quarterly, and at such additional times as it deems necessary to carry out its duties. As part of all in-person meetings, the Committee will meet with the Senior Vice President – Chief Financial Officer, the Vice President – Internal Audit, the Senior Vice President – General Counsel and the independent registered public accounting firm in executive sessions. One third of the Committee members shall constitute a quorum, and all matters shall be determined by a majority vote of the members present.

Duties and Responsibilties

The Committee's primary duties and responsibilities include:

Information Released to the Public:

  • Meet quarterly with the independent registered public accounting firm and management to review and discuss the annual audited financial statements and quarterly financial statements, including the Company's specific disclosures under “Management's Discussion and Analysis of Financial Condition and Results of Operations,” in its Form 10-K and Form 10-Qs, quality of earnings, reserves and accruals, suitability of and issues regarding accounting principles, areas that involve a high degree of judgment, audit adjustments, whether or not recorded, and such other areas of inquiry as may be appropriate, and annually recommend to the Board whether the audited financial statements should be included in the Annual Report on Form 10-K.
  • Review earnings press releases and discuss with management and the independent registered public accounting firm the general nature of information to be disclosed and the type of presentations to be made in earnings press releases, including any “pro forma” or other financial information that does not comply with generally accepted accounting principles in the United States (“GAAP”).
  • Review and discuss with management the general nature of information to be disclosed and the type of presentations to be made in financial information and earnings outlooks provided to analysts and rating agencies.
  • Review other relevant reports or financial information submitted by the Company to any governmental body or the public, including management certifications as required by the Sarbanes-Oxley Act of 2002.

Independent Registered Public Accounting Firm:

  • Appoint (subject to ratification by the Company's stockholders), retain, compensate and oversee the work performed by the independent registered public accounting firm. The independent registered public accounting firm shall report directly to the Committee, and the Committee has the ultimate authority and responsibility to evaluate the performance of the independent registered public accounting firm and, where appropriate, terminate the independent registered public accounting firm. The Committee will consider and approve, in advance, any audit and permissible non-audit services to be performed by the independent registered public accounting firm and will establish policies and procedures for the pre-approval of audit and permissible non-audit services to be performed by the independent registered public accounting firm.
  • At least annually, obtain and review a report by the independent registered public accounting firm describing: the firm's internal quality control procedures; any material issues raised by the most recent internal quality control review, peer review, or any inquiry or investigation by the Public Company Accounting Oversight Board (“PCAOB”) or any governmental or professional authorities within the last 5 years, and the firm's actions to address such issues; all relationships between the independent registered public accounting firm and the Company or individuals in financial reporting oversight roles at the Company that may reasonably be thought to bear on the independent registered public accounting firm’s independence, including the registered public accounting firm's written affirmation that the registered public accounting firm is in fact independent and an assurance that each member of the engagement team is in compliance regarding length of service.
  • Hold timely discussions with the independent registered public accounting firm regarding:
    • The potential effects of any of the relationships described in the preceding paragraph on the independent registered public accounting firm’s independence.
    • Any problems or difficulties encountered during the audit and management's response, including any restrictions on the scope of the independent registered public accounting firm's activities or on access to requested information and any significant disagreements with management.
    • Critical accounting policies and practices.
    • Alternative treatments within GAAP related to material items that have been discussed with management, ramifications of using such alternative treatments, the treatment preferred by the independent registered public accounting firm, and the independent registered public accounting firm's conclusions about the treatment selected by the Company.
    • matters required under SAS 61, as amended and adopted by the PCAOB;
    • Any special audit steps adopted in light of significant deficiencies or material weaknesses in internal control over financial reporting.
    • Other communications between the independent registered public accounting firm and management, including any management letters and schedules of unadjusted audit differences.
    • The responsibilities, budget and staffing of the internal audit function
  • Set hiring policies for employees or former employees of the independent registered public accounting firm.

Internal Audit:

Oversee the internal audit function, including:

  • Review and approve the appointment, replacement or dismissal of the Vice President – Internal Audit.
  • Review internal audit activities, including budget, staffing, scope, plans and results of work performed, including progress against those plans/budgets and, as appropriate, confer with the internal auditors regarding the scope and results of their work.
  • Review the effectiveness of the internal audit program and the independence, objectivity and performance of the internal audit function.

Financial Reporting Processes and Controls:

Oversee the following:

  • The Company's financial reporting processes.
  • The Company's disclosure controls and procedures, and internal control over financial reporting, and review any disclosure from the Chief Executive Officer or the Chief Financial Officer of: a) significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting and b) fraud that involves management or other employees involved in financial reporting.
  • Major issues regarding accounting principles and financial statement presentations, including any significant changes in the Company's selection or application of accounting principles.
  • Major issues as to the adequacy of the Company’s internal controls and any special audit steps adopted in light of material control deficiencies.
  • Analyses prepared by management regarding significant financial reporting issues, accounting principles, judgments and estimates, off-balance sheet structures and taxation matters.
  • The financial reporting aspects of any related party transactions.
  • The effect of pending and newly implemented regulatory and accounting initiatives related to the Company's financial statements.
  • Management's establishment and maintenance of financial and accounting policies and processes to provide for compliance with such policies.

Risk and Compliance Oversight:

  • Oversee the Company's compliance and risk management programs and practices related to accounting and financial reporting matters to identify, manage and monitor compliance with applicable government and regulatory requirements, including:
    • Discussion with management (including the individual responsible for day-to-day operational responsibility for the Company’s compliance and ethics program) regarding compliance with legal and regulatory requirements relating to accounting and financial reporting matters as may be appropriate (with the Nominating and Governance Committee assisting the Board in overseeing compliance with legal and regulatory requirements other than those related to accounting or financial reporting).
    • Discussion of policies or guidelines with respect to risk assessment and risk management, accounting, financial reporting and disclosure matters, and anti-fraud controls.
    • Establish and maintain procedures to receive, retain and address confidential complaints regarding accounting, internal accounting controls and auditing matters, including procedures for the confidential, anonymous submission by Company employees of concerns regarding questionable accounting or auditing matters.

Financial Policies of the Company:

  • Review the material financial policies of the Company, including financial delegation of authority and borrowing policies.
  • Review and approve the Company’s policies regarding hedging, swaps, security-based swaps, derivatives, foreign currency exchange risk and debt interest rate risk. With respect to swaps and security-based swaps, review and approve the Company’s policies regarding entering into swap and security-based swap transactions, including decisions to enter into transactions that are neither cleared nor executed on a designated contract market, exchange, swap execution facility or security-based swap execution facility.

Other Responsibilities:

The Committee shall perform other activities consistent with this Charter, the Company's by-laws and governing law, as the Committee or the Board deems necessary or appropriate.

Role of the Audit Committee:

Although the Committee has the powers and responsibilities set forth in this Charter, the role of the Committee generally is oversight. The members of the Committee are not employees of the Company and generally are not accountants or auditors by profession. Consequently, the Committee does not conduct audits, independently verify management's representations, or determine that the Company's financial statements and disclosures are complete and accurate, prepared in accordance with GAAP, or fairly present the financial condition, results of operations and cash flows of the Company in accordance with GAAP, nor does the Committee determine that the Company’s internal control over financial reporting is effective. These are the responsibilities of management. The independent registered public accounting firm is responsible for expressing an opinion on the Company's financial statements and internal control over financial reporting based upon its audit. The Committee's considerations and discussions with management and the independent registered public accounting firm do not assure that the Company's financial statements are presented in accordance with GAAP or that internal control over financial reporting is effective or that the audit of the Company's financial statements has been carried out in accordance with auditing standards generally accepted in the United States.

Management Development and Compensation Committee Charter

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(Effective May 12, 2014)

Purpose and Authority

The Management Development and Compensation Committee (the “Committee”) is established by the Board of Directors (the “Board”) for the purposes of:

  1. Assisting the Board in discharging its responsibilities relating to compensation of the Company's Chief Executive Officer (“CEO”) and other Executive Officers;
  2. Reviewing and approving the Company's compensation policies, plans and goals and objectives for executive officers and directors;
  3. Overseeing the Company's management development and succession planning processes; and
  4. Performing such other duties and responsibilities as may be assigned to the Committee by the Board or as designated in plan documents.

“Executive Officers” as used in this charter means members of the Company's Executive Committee and any other officers within the meaning of Rule 16a-1(f) issued by the SEC.

The Committee shall report regularly to the Board regarding the execution of its duties and responsibilities.

The Committee shall have the authority, in its sole discretion, to retain, oversee and terminate, and to approve the fees and other retention terms of, such consultants, outside counsel and other experts and advisors as it deems necessary to carry out its duties. The Company shall provide appropriate funding, as determined by the Committee, for payment of reasonable compensation to such consultants, outside counsel and other experts and advisors. The Committee shall also annually assess the independence of any consultants, outside counsel, experts and advisors prior to either (1) their retention or (ii) receipt of advice if not retained by the Committee.

This Charter shall be reviewed annually and updated as necessary. The Committee shall also conduct an annual evaluation of its performance relative to the purpose, duties and responsibilities described herein. The Committee may delegate any of its duties and responsibilities to subcommittees, as the Committee may deem appropriate. The decisions made pursuant to any such delegated authority shall be reported to the full Committee at its next scheduled meeting.

Composition and Meetings

The Committee shall consist of at least three directors, each of whom is determined by the Board to be independent as that term is defined by the New York Stock Exchange and the Company’s independence standards set forth in the Company’s Corporate Governance Guidelines. At least two members of the Committee must qualify as “non-employee directors” for purposes of Rule 16b-3 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). At least two members of the Committee must qualify as “outside directors” for purposes of Section 162(m) of the Internal Revenue Code (the “Code”). In the event that approval by the Committee of any incentive compensation or equity plan, or grants made thereunder, would not satisfy the relevant requirements for either tax deductibility under Section 162(m) of the Code or an otherwise available exclusion from potential short-swing trading profits liability under Section 16(b) of the Exchange Act pursuant to Rule 16b-3, and the Committee determines that such compliance is desirable, then a properly constituted subcommittee shall approve and authorize such plans and grants.

The Board, by majority vote, may remove a member of the Committee without cause or appoint a director to serve on the Committee at any duly noticed meeting of the Board.

The Committee shall meet at least four times per year either in person or by teleconference. One-third of the Committee members shall constitute a quorum.

Duties and Responsibilities

The Committee shall:

  1. With respect to executive compensation:
    • Review and approve the performance goals and objectives for the CEO and other Executive Officers, including the performance goals and objectives for purposes of payments and awards under the short-term incentive compensation plans and the long-term incentive compensation plans.
    • Annually determine the extent to which such performance goals and objectives have been met.
    • Evaluate the CEO’s performance using a multi-step process including setting the goals and objectives at the beginning of the fiscal year, a mid-year review and a year-end evaluation review.
    • Determine and approve the CEO’s salary and other compensation based on the performance evaluation conducted by the Committee and the other independent directors, as well as input from the Company’s compensation consultant and recommendations from the independent directors.
    • Review periodically with the CEO the performance of each of the other Executive Officers in light of their goals and objectives and approve the salary and other compensation of each such Executive Officer based on that evaluation.
    • Determine the amount and other material terms of individual awards to be made to Executive Officers under the Company’s short-term incentive compensation plans and long-term incentive compensation plans.
    • Review and approve, as appropriate, recommendations regarding retirement income and other deferred benefit plans applicable to Executive Officers.
    • Review and approve, as appropriate, recommendations of the CEO regarding new Executive Committee positions before the job is filled and, unless appointed by the Board, appoint any officer required to be appointed by the Board under the Company’s bylaws.
    • Review and approve any employment agreements, change-in-control arrangements, severance arrangements or special or supplemental employee benefits, and any amendments to any of the foregoing, applicable to Executive Officers.
    • Evaluate the outcome of the advisory vote of the stockholders regarding “say on pay” and make recommendations or take appropriate actions in response to such advisory vote.
  2. With respect to incentive compensation and equity plans:
    • Make recommendations to the Board with respect to the structure of overall incentive and equity-based plans and adopt, amend or terminate plans consistent with the approved structure.
    • Review and approve performance goals and objectives, threshold and maximum awards and maximum aggregate funding for participants in the short-term incentive compensation plans who are not Executive Officers.
    • Administer and interpret the equity compensation plan and other long-term compensation plans and programs.
    • Review, approve and oversee all equity award granting practices under the long-term incentive compensation plans.
    • Initiate studies of new executive compensation plans and of existing plans, as appropriate.
    • Review and approve the Executive Stock Ownership Guidelines and Non-Management Director Stock Ownership Guidelines and monitor compliance with such Stock Ownership Guidelines.
    • Consider the risks arising from the Company's compensation plans, policies and practices in the course of performing its duties and responsibilities, and periodically evaluate, or oversee the evaluation of, the risks arising from the Company's compensation practices and policies.
  3. With respect to benefit, health and welfare, and retirement plans:
    • Review and approve benefit, health and welfare, and retirement plans and any amendments thereto, except to the extent that the Employee Benefits Committee has been delegated authority. The administration of the Company’s tax-qualified retirement plans such as pension and 401(k) plans, along with health and welfare plans, is the responsibility of the Employee Benefits Committee.
  4. With respect to director compensation:
    • Annually review the compensation of non-management directors and the principles upon which such compensation is determined and make any recommendations to the Board regarding such compensation.
  5. With respect to succession:
    • In conjunction with the Board, oversee the management development and succession planning process (including succession planning for emergencies) for the CEO and the CEO’s executive direct reports.
    • Periodically review the Company’s diversity programs and key metrics.
  6. With respect to executive compensation and related disclosures:
    • Review and discuss with management the Company's Compensation Discussion and Analysis and compensation-related disclosures required to be included in the Company's annual report and proxy statement in accordance with applicable rules and regulations.
    • Review the Company’s compensation policies and programs to ensure that such policies and programs do not encourage excessive risk taking by Company employees and executive officers.
    • Recommend to the Board based on the review and discussions whether the Compensation Discussion and Analysis should be included in the annual report and proxy statement.
    • Prepare the compensation committee report required to be included in the Company's annual report and proxy statement in accordance with applicable rules and regulations.
    • Determine annually if any conflicts of interest exist on the part of any executive compensation consultants retained by the Committee, and if so, ensure disclosure of such conflicts, including the nature of the conflict and how it was addressed, in the Company’s proxy statement.

Other Responsibilities

The Committee shall perform other activities consistent with this charter, the Company’s by-laws and governing law, as the Committee or the Board deems necessary or appropriate.

Nominating and Governance Committee Charter

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(Effective November 19, 2014)

Purpose and Authority

The Nominating and Governance Committee (the “Committee”) is established by the Board of Directors (the “Board”) of The Clorox Company (the “Company”) for the purposes of:

  1. Identifying individuals qualified to become Board members, consistent with criteria approved by the Board, and recruiting them for membership on the Board.
  2. Recommending to the Board individuals to be selected as the Company’s Director candidates for election at annual meetings of stockholders and any individuals to be elected by a majority of the Board between annual meetings.
  3. Reviewing and recommending to the Board changes in the Company’s Corporate Governance Guidelines and the Code of Conduct.
  4. Assisting the Board in overseeing the Company’s ethics and compliance program, including the Company’s compliance with legal and regulatory requirements other than those related to accounting or financial reporting (which are the responsibility of the Audit Committee).
  5. Performing a leadership role in shaping the Company’s corporate governance and overseeing the evaluation of the Board.

The Committee will report regularly to the Board regarding its execution of its duties and responsibilities.

The Committee shall have the authority to retain and terminate, and to approve the fees and other retention terms of, such outside counsel, search firms and other advisors that it deems necessary to carry out its duties.

This Charter shall be reviewed annually and updated as necessary. The Committee shall also perform an annual evaluation of its performance relative to the purpose, duties and responsibilities described herein. The Committee may delegate any of its duties and responsibilities to subcommittees composed of its members.

Composition and Meetings

The Committee shall consist of at least three directors who are determined by the Board to be independent as that term is defined by the New York Stock Exchange and the Company’s independence standards set forth in the Company’s Corporate Governance Guidelines.

The Board, by majority vote of those directors present, may remove a member of the Committee without cause or appoint a Director to serve on the Committee at any duly noticed meeting of the Board.

The Committee shall meet at least three times annually, and at such additional times as it deems necessary to carry out its duties. One third of the Committee members shall constitute a quorum, and all matters shall be determined by a majority vote of the members present.

Duties and Responsibilities

The Committee shall:

  1. Oversee the Company’s Corporate Governance Guidelines, and annually review the guidelines and recommend changes to the Board as necessary.
  2. Oversee the evaluation of the overall performance of the Board and its committees.
  3. Develop and recommend to the Board criteria for membership on the Board and review these criteria periodically.
  4. Identify, review and evaluate the qualifications of candidates for membership on the Board and recommend annually to the Board the Company’s slate of candidates to be proposed for election to the Board.
  5. Recommend to the Board policies regarding the composition, size and structure of the Board.
  6. Recommend to the Board policies related to tenure as a Director, such as the retirement policy for Directors, and review any offers of resignation made by non-management directors.
  7. Oversee Director orientation and continuing education.
  8. Make recommendations to the Board with respect to Director independence and qualification determinations and evaluate Director notices of possible additional outside board or audit committee service.
  9. Recommend to the Board the general policies regarding the structure, function and composition of Board committees and, each year, recommend specific assignments of individual Directors to these committees, including the selection of committee chairs
  10. Consider stockholder recommendations of candidates for Board membership.
  11. Nominate individuals for election to the Board as necessary between annual stockholders’ meetings.
  12. Review and make recommendations to the Board regarding stockholder proposals.
  13. Oversee the Company’s compliance and ethics program, including compliance with legal and regulatory requirements other than those related to accounting or financial reporting (which are the responsibility of the Audit Committee), and discuss with management (including the individual responsible for day-to-day operational responsibilities for the Company’s compliance and ethics program) the Company’s compliance and ethics program, as well as the status of pending litigation, environmental issues and other areas of oversight as may be appropriate.
  14. Oversee the Company’s compliance with the Code of Conduct, including periodically reviewing and updating the Code of Conduct, and evaluating any actual or potential conflicts of interest of directors, and management’s activities to monitor compliance with the Code of Conduct.
  15. Review related party transactions and oversee the Company’s compliance with the Related Party Transaction Policies and Procedures.
  16. Oversee the Company’s crisis management program.
  17. Recommend whether to accept or reject the resignation of any incumbent director-nominee who submitted his or her resignation as a director to the full Board in the event of receiving a greater number of votes cast “against” such nominee than votes “for” such nominee in any non-contested election.
  18. Review the Company’s Director and Officer insurance program and other key insurance policy coverage.

Other Responsibilities

The Committee shall perform other activities consistent with this Charter, the Company’s bylaws and governing law, as the Committee or the Board deems necessary or appropriate