Filed by The Procter & Gamble Company
Pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-6(j)
of the Securities and Exchange Act of 1934
Subject Company: The Gillette Company
Commission File No.: 001-00922
Registration No.: 333-123309
SPECIAL MEETING OF SHAREHOLDERS OF
THE PROCTER & GAMBLE COMPANY
JULY 12, 2005
Voice Over Good morning ladies and gentlemen. Welcome to the
special shareholders meeting to approve the Gillette
acquisition. Please stand for the National Anthem, sung by
our fellow shareholder, and P&G employee, Scott Bennett.
Chair Thank you, Scott.
Chair 1. Good morning, ladies and gentlemen. I'm AG Lafley, the
Chairman, President and Chief Executive of Procter &
Gamble. I would like to welcome everyone to this
special meeting of shareholders. I would also like to
welcome all of our shareholders who are listening to
this meeting via audiocast.
This meeting is now called to order. Notice of the
meeting was mailed to each shareholder of record and a
quorum is present in person or by proxy.
Chair 2. Let me get started by introducing the people here on
stage. Jim Johnson is our Chief Legal Officer and Clayt
Daley is our Chief Financial Officer.
Chair 3. The Inspector of Election for this meeting is Peter
Descovich of Automatic Data Processing. He will
supervise the voting at this meeting.
Chair 4. In order to handle our business expeditiously today and
provide time for shareholder questions, we've
established a few simple rules about the conduct of the
meeting.
Each of you should have a copy of the agenda. On the
left-hand side of the agenda booklet are the guidelines
for the conduct of the meeting.
I ask that you cooperate in following these guidelines.
In fairness to all shareholders, I intend to enforce
the rules. The digital clock appearing below the screen
behind me will countdown the time remaining for each
speaker.
Please go to the nearest microphone if you wish to
speak and identify yourself to the attendant. Please
state your name and affiliation clearly and speak
directly into the microphone so that everyone can hear
what you have to say and so that we have a clear
recording of the meeting to assist in preparing the
record of the meeting.
Chair 5. Turning to our agenda, I'll ask Jim to address some
preliminary matters.
JJJ 6. First, let me remind everyone that the discussions
today may contain references to some non-GAAP financial
measures. In accordance with the SEC's Regulation G,
the required reconciliations to GAAP numbers can be
found on the Company's website at www.pg.com. Our
discussions will also contain certain ----------
forward-looking statements. For a discussion of factors
that could affect these forward-looking statements,
please see the Company's website.
Chair 7. We have two items to cover on the agenda today related
to the Gillette deal. We will not entertain questions
related to other topics because we want to focus on the
most-important matter before us today.
Chair 8. We'll now proceed with the first Board proposal to
adopt the agreement and plan of merger and to approve
the issuance of P&G common stock in the merger. As a
reminder, each proposal will be automatically seconded
as it is introduced.
CHAIR 9. Let me start by making a few opening comments about the
proposed deal. As we explained in the joint proxy
statement, P&G's Board of Directors and Company
management strongly support the Gillette acquisition.
We have the opportunity to combine two of the world's
leading consumer products companies at a time when both
companies' performance is strong.
It's a combination that leverages the structural
characteristics of the consumer products industry.
Consumer products is an industry that rewards
leadership and scale. Leadership scale, properly
leveraged, provides the opportunity to lower cost
structures. Lower cost structures make it possible to
reinvest in building brands and commercializing
innovation, which drive consumer value. The more we can
invest in branding and innovation that delights
consumers and delivers superior value, the more
consistently we grow - which drives shareholder value.
The more we grow, the greater our scale and the lower
our costs. It's a virtuous circle that both P&G and
Gillette can leverage better together than either
company can alone.
The full impact of how our companies get better
together is most evident when all the pieces come
together.
Add Gillette brands, product design, and core
technologies to P&G's broad-based innovation
commercialization capability...
Add Gillette synergies to P&G's cash and cost
discipline...
Add Gillette's developing market opportunity and trade
up capability to P&G's unique global go-to-market
strength...
Add P&G's and Gillette's combined marketing
capabilities to the marketing ROI work we're both doing
to get more value from category-leading brands...
And what we get - what YOU get, as shareholders - is
more consumers... delighted with more P&G and Gillette
brands... in more markets around the world... and that
leads to greater returns for shareholders.
All of these benefits should lead to more consistent
and stronger shareholder and consumer value creation
over the mid- and long term.
More specifically, we remain comfortable with the
revenue and cost synergies we've outlined in our
previous communications.
On the top line, we've increased P&G's sales growth
goal through 2010 by a point, to 5% to 7%, which we
remain confident is realistic and sustainable.
We also believe that combining our companies will
create upside for our 10%-plus earnings goal.
In terms of costs, we've identified more than a billion
dollars in synergies that we're confident we can
achieve by year three. We will eliminate administrative
overlap by integrating Gillette brands with minimal
additions to P&G's corporate staff. We can deliver key
support functions through P&G's Global Business
Services group; GBS delivers best-in-class costs that
are not available to Gillette on its own today. We also
see synergy opportunities in purchasing, manufacturing,
and logistics; we'll reduce costs in these areas
through increased scale, improved asset utilization,
and coordinated purchasing. And we will generate
efficiencies in marketing and retail selling.
We are also encouraged by the progress we are already
making toward planning the integration of our two
companies. The spirit of collaboration and teamwork
among the integration teams has been truly outstanding.
All our integration teams are up and running, jointly
led by P&G's Chief Financial Officer Clayt Daley and
Gillette CEO Jim Kilts. Regional and country
go-to-market organizations are collaborating on
transition plans; our Global Business Services and IT
teams are doing the same; we're working closely on
integration planning for manufacturing and supply chain
matters.
We've made several key decisions about how the combined
company will do business. We'll operate within P&G's
organization structure of Global Business Units, Market
Development Organizations, Global Business Services,
and lean Corporate Functions.
We will create a new GBU - the Global Gillette business
unit - that will consist of Razors and Blades, Braun
and Duracell. Razors and Blades will continue to be
based in Boston; Braun in Kronberg, Germany; and
Duracell in Bethel, Connecticut, for the foreseeable
future.
Gillette's oral care and personal care businesses will
be combined with P&G's oral care and personal
care/deodorant businesses.
And, we have retained key Gillette leaders who will
continue to run Gillette businesses: the technical and
manufacturing leader of the razor and blades business
will continue in that role, as will the president of
that business; the presidents of Gillette's North
America and International commercial operations will
continue; the head of the Duracell and Braun businesses
will remain in place. These and other key leaders have
been critical to Gillette's success, and we are
delighted that they have agreed to stay once the
acquisition is complete.
Beyond these senior leadership roles, our intention is
to transfer Gillette people into P&G's organization and
to place a small number of P&G people into the Gillette
organization. Our principle is to field the best team
with the best talent from both companies.
Finally, regulatory reviews are proceeding as expected,
and we are still on track to close the deal in Fall
2005.
To summarize, the case for combining our two companies
is strong; the progress we're making toward integration
and capturing important synergies is well underway; and
the talent we will bring to the leadership of our
combined company is best-in-class.
This is a great deal for P&G and Gillette shareholders
alike. We are pleased with the shareholder response we
have received to date, and we strongly encourage you to
vote in support of this unique combination.
Chair 10. Is there any discussion on this proposal? Just as a
reminder, each speaker will be allowed one turn at the
microphone for a maximum of two minutes.
(following discussion)
Chair 11. We'll now proceed with the next Board proposal to
adjourn this meeting to a later date to permit further
solicitation of proxies if there are not sufficient
votes at the time of this meeting. This was simply a
housekeeping proposal that we put in place in case we
didn't get enough votes to pass the first proposal at
the meeting today. We now know that the required number
of votes have been received and that we will not have
to adjourn this meeting.
Chair 12. We'll now proceed with the voting. Will those voting at
this meeting raise your hand and an usher will give you
a ballot. When you've marked your ballot, please hold
it up so the ushers can collect it.
(Ushers distribute and collect ballots.)
Chair 13. While the votes are being counted, we'll view this
video.
(6 minute video)
Chair 14. We now have the results of the voting. I'm advised by
the Inspector of Election
a. that the Board proposal to adopt the merger
agreement and approve the issuance of common stock
in the merger has been adopted with at least
1,849,328,165 votes cast in favor (or a favorable
vote of approximately 70.3% of the issued and
outstanding shares) and has therefore been
adopted. This represents approximately 96.5% of
the shares voted; and
b. that the Board proposal to adjourn the meeting has
been adopted with at least _______________ votes
cast in favor (or a favorable vote of
approximately ______% of the shares voted) and has
therefore been adopted [if necessary].
Chair 15. Certified totals and percentages will be available
later from the Secretary.
Chair 16. This completes today's business. I again want to
express my appreciation for your confidence and
support. I want to thank so many of you who have been
long-term owners of stock.
Chair 17. Now, will someone make a motion to adjourn.
Ms.Hogan 18. Motion to adjourn.
Chair 19. Thank you very much. This meeting is adjourned.
FORWARD-LOOKING STATEMENTS
--------------------------
All statements, other than statements of historical fact included in this
release, are forward-looking statements, as that term is defined in the Private
Securities Litigation Reform Act of 1995. In addition to the risks and
uncertainties noted in this release, there are certain factors that could cause
actual results to differ materially from those anticipated by some of the
statements made. These include: (1) the ability to achieve business plans,
including with respect to lower income consumers and growing existing sales and
volume profitably despite high levels of competitive activity, especially with
respect to the product categories and geographical markets (including developing
markets) in which the Company has chosen to focus; (2) the ability to
successfully execute, manage and integrate key acquisitions and mergers,
including (i) the Domination and Profit Transfer Agreement with Wella, and (ii)
the Company's agreement to merge with The Gillette Company, including obtaining
the related required regulatory approvals; (3) the ability to manage and
maintain key customer relationships; (4) the ability to maintain key
manufacturing and supply sources (including sole supplier and plant
manufacturing sources); (5) the ability to successfully manage regulatory, tax
and legal matters (including product liability, patent, and other intellectual
property matters), and to resolve pending matters within current estimates; (6)
the ability to successfully implement, achieve and sustain cost improvement
plans in manufacturing and overhead areas, including the Company's outsourcing
projects; (7) the ability to successfully manage currency (including currency
issues in volatile countries), debt (including debt related to the Company's
announced plan to repurchase shares of the Company's stock), interest rate and
certain commodity cost exposures; (8) the ability to manage the continued global
political and/or economic uncertainty and disruptions, especially in the
Company's significant geographical markets, as well as any political and/or
economic uncertainty and disruptions due to terrorist activities; (9) the
ability to successfully manage the pattern of sales, including the variation in
sales volume within periods; (10) the ability to successfully manage competitive
factors, including prices, promotional incentives and trade terms for products;
(11) the ability to obtain patents and respond to technological advances
attained by competitors and patents granted to competitors; (12) the ability to
successfully manage increases in the prices of raw materials used to make the
Company's products; (13) the ability to stay close to consumers in an era of
increased media fragmentation; and (14) the ability to stay on the leading edge
of innovation. For additional information concerning factors that could cause
actual results to materially differ from those projected herein, please refer to
our most recent 10-K, 10-Q and 8-K reports.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
-------------------------------------------
In connection with the proposed merger, The Procter & Gamble Company
("P&G") has filed a registration statement on Form S-4 on May 26, 2005 with the
Securities and Exchange Commission (Registration No. 333-123309), containing a
definitive joint proxy statement/prospectus. INVESTORS AND SECURITY HOLDERS ARE
ADVISED TO READ THE DEFINITIVE JOINT PROXY STATEMENT/PROSPECTUS BECAUSE IT
CONTAINS IMPORTANT INFORMATION. Investors and security holders may obtain a free
copy of the definitive joint proxy statement/prospectus and other documents
filed by P&G and The Gillette Company ("Gillette") with the Commission at the
Commission's web site at http://www.sec.gov. Free copies of the definitive joint
proxy statement/prospectus and each company's other filings with the Commission
may also be obtained from the respective companies. Free copies of P&G's filings
may be obtained by directing a request to P&G Investor Relations at
513-983-2415. Free copies of Gillette's filings may be obtained by directing a
request to Gillette Investor Relations at 617-421-8127.
This communication shall not constitute an offer to sell or the
solicitation of an offer to buy securities, nor shall there be any sale of
securities in any jurisdiction in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws of
such jurisdiction.
PARTICIPANTS IN THE SOLICITATION
--------------------------------
P&G, Gillette and their respective directors, executive officers and other
members of their management and employees may be soliciting proxies from their
respective stockholders in favor of the merger. Information concerning persons
who may be considered participants in the solicitation of P&G's stockholders
under the rules of the Commission is set forth in the Proxy Statement filed by
P&G with the Commission on August 27, 2004, and information concerning persons
who may be considered participants in the solicitation of Gillette's
stockholders under the rules of the Commission is set forth in the Proxy
Statement filed by Gillette with the Commission on March 30, 2005.