{"id":41415,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/articles-of-incorporation-procter-amp-gamble-co.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"articles-of-incorporation-procter-amp-gamble-co","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/formation\/articles-of-incorporation-procter-amp-gamble-co.html","title":{"rendered":"Articles of Incorporation – Procter & Gamble Co."},"content":{"rendered":"

AMENDED ARTICLES OF INCORPORATION<\/strong><\/p>\n<\/p>\n

\n

OF<\/strong><\/p>\n<\/p>\n

\n

THE PROCTER & GAMBLE COMPANY<\/strong><\/p>\n<\/p>\n

The Procter & Gamble Company, a corporation under the laws of the State
\nof Ohio, adopts these Amended Articles of Incorporation to supersede and take
\nthe place of its existing Amended Articles of Incorporation, and all amendments
\nthereof, that are in force at this time, and for such purpose certifies as
\nfollows:<\/p>\n<\/p>\n<\/p>\n

First:<\/em> The name of the corporation is The Procter & Gamble
\nCompany.<\/p>\n<\/p>\n<\/p>\n

Second:<\/em> The place in the State of Ohio where its principal office is
\nlocated is in the City of Cincinnati, in Hamilton County.<\/p>\n<\/p>\n<\/p>\n

Third:<\/em> The purposes for which it is formed are to produce,
\nmanufacture, buy, sell merchandise and generally deal in the following:<\/p>\n<\/p>\n<\/p>\n

1. Soap, soap products, cleansers, detergents and cleaning products of any
\nand all kinds, for any and all uses and purposes.<\/p>\n<\/p>\n<\/p>\n

2. Cosmetics, perfumes, toilet powders, toilet waters, and all other toilet
\npreparations and articles.<\/p>\n<\/p>\n

3. Fats and oils, hydrogenated fats and oils, and derivatives of fats and
\noils for any and all uses and purposes.<\/p>\n<\/p>\n<\/p>\n

4. Cottonseed, soybeans, other oilseeds, oilseed meals, linters, cotton,
\nhulls and any products and any by-products resulting from the processing of any
\nof these or any products made therefrom.<\/p>\n<\/p>\n<\/p>\n

5. Cellulose, cellulose products, purified cellulose, forest products,
\nfibrous products, paper and paper products of any and all kinds, and any
\nproducts and any by-products resulting from the processing of any of these or
\nany products made therefrom.<\/p>\n<\/p>\n<\/p>\n

6. Food products of any and all kinds.<\/p>\n<\/p>\n<\/p>\n

7. Candles, stearine, stearic acid, glycerine, silicate of soda, caustic soda
\nand any similar or related products.<\/p>\n<\/p>\n<\/p>\n

8. Organic and inorganic chemicals, chemical compounds, drugs and
\npharmaceuticals.<\/p>\n<\/p>\n<\/p>\n

9. All substances and products, kindred to or competitive with any or all of
\nthe foregoing and all that may result from or be convenient to the production,
\nmanufacture, sale and dealing in any or all of the foregoing substances and
\nproducts.<\/p>\n<\/p>\n<\/p>\n

10. All substances, materials, and articles made from or containing any or
\nall of the foregoing products or entering into or convenient for the manufacture
\nand sale of any or all of the foregoing products.<\/p>\n<\/p>\n<\/p>\n

The purpose for which it is formed also include the power to do all other
\nthings necessary or incident to any or all of the foregoing purposes, including
\nprovision for insurance, financial and other services and of means for the
\ndevelopment, promotion, advertising, marketing and transportation of raw
\nmaterials, intermediate or finished products and the power to purchase, acquire,
\nhold, convey, lease, mortgage or dispose of stock, securities and property, real
\nor personal, tangible or intangible, in connection therewith or in furtherance
\nthereof.<\/p>\n<\/p>\n<\/p>\n

In addition to the foregoing specified purposes and not limited in any manner
\nthereby, the purpose for which it is formed is to engage in any lawful act or
\nactivity for which corporations may be formed under Sections 1701.01 to 1701.98,
\ninclusive, of the Ohio Revised Code.<\/p>\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n<\/p>\n

Fourth:<\/em> The authorized number of shares without par value is ten
\nbillion eight hundred million (10,800,000,000) of which six hundred million
\n(600,000,000) are classified and designated as Class A Preferred Stock, two
\nhundred million (200,000,000) are classified and designated as Class B Preferred
\nStock and ten billion (10,000,000,000) are classified and designated as Common
\nStock.<\/p>\n<\/p>\n<\/p>\n

1. The express terms and provisions of the shares classified and designated
\nas Class A Preferred Stock and Class B Preferred Stock are as follows:<\/p>\n<\/p>\n<\/p>\n

(a) The holders of the shares classified and designated as Class A Preferred
\nStock shall be entitled to one (1) vote per share at all meetings of the
\nshareholders of the Company. The holders of the shares classified and designated
\nas Class B Preferred Stock shall not be entitled to vote at meetings of
\nshareholders of the Company, other than as provided by law.<\/p>\n<\/p>\n<\/p>\n

(b) The Board of Directors is authorized, subject to any limitations
\nprescribed by law and to the provisions of this Article Fourth<\/em>, to
\nadopt amendments to these Amended Articles of Incorporation in respect of any
\nunissued or treasury shares of the Class A Preferred Stock and Class B Preferred
\nStock and thereby to fix or change: the division of such shares into series and
\nthe designation and authorized number of shares of each series; the dividend
\nrate; the dates of payment of dividends and the dates from which they are
\ncumulative; liquidation price; redemption rights and price; sinking fund
\nrequirements; conversion rights; and restrictions on the issuance of such shares
\nor any series thereof. In addition the Board of Directors is hereby authorized
\nto similarly fix or change any or all other express terms in respect of the
\nClass A Preferred Stock and Class B Preferred Stock as may be permitted or
\nrequired by law.<\/p>\n<\/p>\n<\/p>\n

(c) Upon the conversion of any share of Class A Preferred Stock and Class B
\nPreferred Stock, the stated capital of the Company shall be reduced or increased
\nin such a manner and at such a rate so that the stated capital attributable to
\nany share issued upon the exercise of such conversion rights shall be the same
\nas any other share of its class and not the stated capital of the share so
\nconverted.<\/p>\n<\/p>\n<\/p>\n

(d) The holders of the shares of Class A Preferred Stock and Class B
\nPreferred Stock shall receive dividends, when and as declared by the Board of
\nDirectors, out of funds available for the payment of dividends, before any
\ndividend shall be paid on the shares of Common Stock. Such dividends shall be
\npayable at the rate per share per annum, and no more, and pursuant to the other
\nterms as shall have been fixed by the Board of Directors, and no dividends shall
\nbe paid on the shares of Common Stock unless the current dividend, and all the
\narrears of dividends, if any, on the outstanding shares of the Class A Preferred
\nStock and Class B Preferred Stock shall have been paid or provision shall have
\nbeen made for the payment thereof.<\/p>\n<\/p>\n<\/p>\n

(e) In case of the dissolution or liquidation of the Company, before any
\npayment shall be made to the holders of the Common Stock, the holders of the
\nClass A Preferred Stock and Class B Preferred Stock shall be entitled to be paid
\nfrom the assets available therefor the liquidation price fixed by the Board of
\nDirectors, and all accrued and unpaid dividends thereon, but shall not be
\nentitled to participate any further in the distribution of the assets of the
\nCompany.<\/p>\n<\/p>\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/tr>\n
\n

(f)<\/p>\n<\/td>\n

\n

Pursuant to subsection (b) of this Section 1, there is hereby established a
\nseries of the Class A Preferred Stock with nine million ninety thousand nine
\nhundred nine (9,090,909) shares authorized which is designated as “Series A ESOP
\nConvertible Class A Preferred Stock” with express terms as set forth in Appendix
\nA attached hereto and herein as if fully set forth herein. As a result of four
\ntwo-for-one stock splits on the Common Stock effective October 20, 1989, May 15,
\n1992, August 22, 1997 and May 21, 2004, the number of shares of Series A ESOP
\nConvertible Class A Preferred Stock authorized as incorporated automatically
\nincreased to 145,454,544 in accordance with the terms of paragraph 9(A)(1) of
\nAppendix A. (This footnote is not a part of the Company’s Amended Articles of
\nIncorporation, but is included to provide up-to-date information on the status
\nof Series A ESOP Convertible Class A Preferred Stock.)<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/tr>\n
\n

(g)<\/p>\n<\/td>\n

\n

Pursuant to subsection (b) of this Section 1, there is hereby established a
\nseries of the Class A Preferred Stock<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n

with nineteen million, one hundred forty-two thousand, four hundred eighteen
\n(19,142,418) shares authorized which is designated as “Series B ESOP Convertible
\nClass A Preferred Stock” with express terms as set forth in Appendix B attached
\nhereto and incorporated herein as if fully set forth herein. As a result of two
\ntwo-for-one stock splits effective August 22, 1997 and May 21, 2004, the number
\nof shares of Series B ESOP Convertible Class A Preferred Stock authorized was
\nautomatically increased to 76,569,672 in accordance with the terms of paragraph
\n9(A)(1) of Appendix B. (This footnote is not a part of the Company’s Amended
\nArticles of Incorporation, but is included to provide up-to-date information on
\nthe status of Series B ESOP Convertible Class A Preferred Stock.)<\/p>\n<\/p>\n<\/p>\n<\/p>\n

2. The express terms and provisions of the shares classified and designated
\nas Common Stock are as follows:<\/p>\n<\/p>\n<\/p>\n

(a) The holders of said shares shall be entitled to one (1) vote per share at
\nall meetings of the shareholders of the Company.<\/p>\n<\/p>\n<\/p>\n

(b) After the payment to the holders of all Class A Preferred Stock and Class
\nB Preferred Stock of the preferential amounts to which they shall be entitled in
\nthe event of the dissolution or liquidation of the Company, the holders of the
\nshares of Common Stock shall be entitled to all of the residue of the assets and
\nshall receive payment thereof in proportion to the shares held by them
\nrespectively.<\/p>\n<\/p>\n<\/p>\n

(c) Subject to the express terms and provisions of the shares designated as
\nClass A Preferred Stock and Class B Preferred Stock, the holders of the shares
\nof Common Stock shall have all, and all other rights, interests, powers and
\nprivileges of shareholders of corporations for profit as provided by law,
\nwithout any restrictions, qualifications or limitations thereof.<\/p>\n<\/p>\n<\/p>\n

Fifth:<\/em> The stated capital of the Company shall be the aggregate
\nstated capital of all classes of outstanding shares:<\/p>\n<\/p>\n<\/p>\n

(a) The stated capital of shares with par value shall be the par value of
\nsuch shares.<\/p>\n<\/p>\n<\/p>\n

(b) The stated capital of shares without par value shall be One Dollar
\n($1.00) per share or such other amount required by law.<\/p>\n<\/p>\n<\/p>\n

Sixth:<\/em> The following provisions are hereby agreed to for the purpose
\nof defining, limiting and regulating the exercise of the authority of the
\nCompany, or of its shareholders, or of any class of shareholders, or of its
\ndirectors, or for the purpose of creating and defining rights and privileges of
\nthe shareholders among themselves:<\/p>\n<\/p>\n<\/p>\n

1. The Company may purchase, hold, sell and reissue any of its shares and to
\nthe extent that the authority to do the same may be granted under these
\nArticles, the Board of Directors shall have power to do all said acts, without
\nany action by shareholders, except as otherwise provided below in this Article
\nSixth<\/em>.<\/p>\n<\/p>\n<\/p>\n

2. No holder of shares of any class shall have any right, pre-emptive or
\nother, to subscribe for or to purchase from the Company any of the shares of any
\nclass of the Company hereafter issued or sold.<\/p>\n<\/p>\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/tr>\n
\n

3.<\/p>\n<\/td>\n

\n

(a) Except as otherwise provided in Subsection (b) of this Section 3 the
\nfollowing transactions shall require the affirmative vote of the holders of at
\nleast eighty percent (80%) of the outstanding shares of capital stock of the
\nCompany entitled to vote thereon, considered for the purposes of this Section 3
\nas one class:<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n

(i) the purchase by the Company of any of its shares of any class from any
\nRelated Person, if any such shares have been beneficially owned by the Related
\nPerson less than two years prior to the date of such purchase or any agreement
\nin respect thereof;<\/p>\n<\/p>\n<\/p>\n

(ii) any merger or consolidation of the Company or a subsidiary of the
\nCompany with or into any Related Person, in each case without regard to which
\nentity is the surviving entity;<\/p>\n<\/p>\n<\/p>\n

(iii) any sale, lease, exchange, transfer or other disposition of all or any
\nsubstantial part of the<\/p>\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n

assets of the Company or a subsidiary of the Company to or with any Related
\nPerson;<\/p>\n<\/p>\n<\/p>\n

(iv) the purchase by the Company from any Related Person of any assets or
\nsecurities, or a combination thereof, except assets or securities or a
\ncombination thereof so acquired in a single transaction or a series of related
\ntransactions having an aggregate fair market value of less than Fifty Million
\nDollars ($50,000,000);<\/p>\n<\/p>\n<\/p>\n

(v) the issuance or transfer of any securities of the Company to any Related
\nPerson for cash;<\/p>\n<\/p>\n<\/p>\n

(vi) the adoption of any plan or proposal for the voluntary dissolution,
\nliquidation, spin-off, or split-up of any kind of the Company or a subsidiary of
\nthe Company, or a recapitalization or reclassification of any securities of the
\nCompany, proposed by or on behalf of any Related Person; or<\/p>\n<\/p>\n<\/p>\n

(vii) any other material transaction involving the Company or a subsidiary of
\nthe Company with, or proposed by or on behalf of, any Related Person.<\/p>\n<\/p>\n<\/p>\n

Such affirmative vote shall be required notwithstanding the fact that no vote
\nmay be required, or that some lesser percentage may be specified, by law or in
\nany agreement with any national securities exchange.<\/p>\n<\/p>\n<\/p>\n

(b) The provisions of this Section 3 shall not apply to any purchase
\ndescribed in Subsection (a)(i) of this Section 3 if the purchase would be made
\nas part of any purchase by the Company of its shares made on the same terms to
\nall holders of the shares to be purchased and complying with the applicable
\nrequirements of the Securities Exchange Act of 1934. The provisions of this
\nSection 3 shall also not apply to any transaction described in Subsection
\n(a)(ii) through (vii) of this Section 3 if the Board of Directors of the Company
\nshall by resolution have approved a memorandum of understanding with such
\nRelated Person with respect to and substantially consistent with such
\ntransaction prior to the time the Related Person became such, or if the
\ntransaction is approved by a resolution adopted by the affirmative vote of at
\nleast two-thirds (2\/3) of the members of the whole Board of Directors of the
\nCompany at any time prior to the consummation thereof.<\/p>\n<\/p>\n<\/p>\n

(c) For the purposes of this Section 3, and as guidance to the Board of
\nDirectors for the purpose of Subsection (d) hereof, the term “Related Person”
\nshall mean (1) any individual, firm, corporation or other entity, or group
\nthereof acting or agreeing to act in the manner set forth in Rule 13d-5 under
\nthe Securities Exchange Act of 1934 (the “Act”) as in effect on October 8, 1985,
\nwho is the beneficial owner, directly or indirectly, of five percent (5%) or
\nmore of the outstanding shares of capital stock of the Company entitled to vote
\ngenerally in the election of directors and (2) any “Affiliate” or “Associate” of
\nany of the above or of any entity or group (or any member thereof) described in
\nClause (1) above, whether or not acting as a Director of the Company. The terms
\n“Affiliate” and “Associate” as used herein shall have the respective meanings
\nascribed to such terms in The General Rules and Regulations under the Act as in
\neffect on October 8, 1985, and shall include any person otherwise acting in the
\ncapacity of an “Associate” or “Affiliate”. The Term “Related Person” shall not
\ninclude the Company, any subsidiary of the Company, any employee benefit plan of
\nthe Company or of a subsidiary of the Company, or any trustee of or fiduciary
\nwith respect to any such plan acting in such capacity. In addition to all shares
\nbeneficially owned, directly or indirectly, a Related Person shall also be
\ndeemed to be the beneficial owner of any shares of capital stock of the Company
\n(1) which it has the right to acquire pursuant to any agreement, or upon
\nexercise of conversion rights, warrants or options, or otherwise; or (2) which
\nare beneficially owned, directly or indirectly (including shares deemed owned
\nthrough application of Clause (1) above), (A) by its “Affiliate” or “Associate”
\nor (B) by any other individual, firm corporation, or other entity (or any
\n“Affiliate” or “Associate” thereof) with which it or its “Affiliate” or
\n“Associate” of (B) by any other individual, firm, corporation, or other entity
\n(or any “Affiliate” or “Associate” thereof) with which it or its “Affiliate” or
\n“Associate” has any agreement, arrangement or understanding for the purpose of
\nacquiring, holding, voting or disposing of capital stock of the Company. For the
\npurposes of this Section 3, (A) the outstanding shares of any class of capital
\nstock of the Company shall include shares deemed owned through the<\/p>\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n

application of Clauses (1) and (2) of the preceding sentence but shall not
\ninclude any other shares which may be issuable pursuant to any agreement, or
\nupon exercise of conversion rights, warrants or options, or otherwise, and (B)
\nsubsidiary shall mean any corporation of which the Company owns, directly or
\nindirectly, fifty percent (50%) or more of the voting stock.<\/p>\n<\/p>\n<\/p>\n

(d) The Board of Directors of the Company shall have the power and duty to
\ndetermine for the purposes of this Section 3, on the basis of information then
\nknown to it, whether (1) any individual, firm, corporation, or other entity is a
\nRelated Person or is an “Affiliate” or an “Associate”, or a group thereof; (2)
\nany proposed sale, lease, exchange or other disposition of part of the assets of
\nthe Company or a subsidiary of the Company involves all or any substantial part
\nof the assets of the Company or a subsidiary of the Company; (3) any assets or
\nsecurities, or a combination thereof, to be acquired by the Company, have an
\naggregate fair market value of less than Fifty Million Dollars ($50,000,000) and
\nwhether the same are proposed to be acquired in a single transaction or a series
\nof related transactions; (4) any plan or proposal is for the voluntary
\ndissolution, liquidation, spin-off or split-up of any kind of the Company or a
\nsubsidiary of the Company, or is a recapitalization or reclassification of any
\nsecurities of the Company, and whether any plan or proposal is proposed by or on
\nbehalf of any Related Person; (5) any transaction involving the Company or a
\nsubsidiary of the Company with, or proposed by or on behalf of any Related
\nPerson is material, and whether any such transaction is proposed by or on behalf
\nof any Related Person; and (6) the memorandum of understanding referred to above
\nis substantially consistent with the transaction to which it relates.<\/p>\n<\/p>\n<\/p>\n

(e) The Board of Directors of the Company, when evaluating any material,
\nunsolicited offer of another party to (1) merge or consolidate the Company or a
\nsubsidiary of the Company with or into another corporation; (2) purchase or
\notherwise acquire all or any substantial part of the assets of the Company or a
\nsubsidiary of the Company; (3) sell any assets or securities to the Company; (4)
\npurchase any securities from the Company or from the holders thereof in a tender
\noffer; (5) dissolve, liquidate, spin off or split up the Company or a subsidiary
\nof the Company, or to recapitalize or reclassify any securities of the Company;
\nor (6) involve the Company or a subsidiary of the Company in any other material
\ntransaction, shall, in connection with the exercise of its judgment in
\ndetermining what is in the best interests of the Company and its shareholders,
\ngive due consideration to (A) all relevant factors, including without limitation
\nthe financial and managerial resources and future prospects of the other party
\nand the social, legal, environmental and economic effects on the employees,
\ncustomers, suppliers and other affected persons, firms and corporations and on
\nthe communities and geographical areas in which the Company and its subsidiaries
\noperate or are located and on any of the business and properties of the Company
\nor any of its subsidiaries, as well as such other factors as the Directors deem
\nrelevant; and (B) the amount and form of the consideration being offered in
\nrelation to the then current market price for the Company’s outstanding shares
\nof capital stock, in relation to the then current value of the Company in a
\nfreely negotiated transaction or transactions and in relation to the Board of
\nDirectors’ estimate of the future value of the Company (including the unrealized
\nvalue of its properties and assets) as in independent concern. In evaluating any
\nsuch offer, the Board of Directors shall be deemed to be performing their duly
\nauthorized duties and acting in good faith and in the best interests of the
\nCompany within the meaning of Section 1701.13 of the Ohio Revised Code, as it
\nmay be amended from time to time, and the Company’s Regulations.<\/p>\n<\/p>\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/tr>\n
\n

4.<\/p>\n<\/td>\n

\n

The statutes of Ohio require that action on certain specified matters at a
\nshareholders’ meeting shall be taken by the affirmative vote of the holders of
\nmore than a majority of shares entitled to vote thereon, unless other provision
\nis made in the Articles of Incorporation. On all these specified matters action
\nmay be taken by the affirmative vote of a majority of shares entitled to vote
\nthereon or, if the vote is required to be by classes, by the affirmative vote of
\na majority of each class of shares entitled to vote thereon as a class, except
\nthat any amendment, alteration, addition to or repeal of this Article
\nSixth<\/em> and of any of the matters specified above in Section 3 of this
\nArticle Sixth<\/em> as requiring a vote other than the affirmative vote of
\nthe holders of a majority of the shares entitled to vote thereon, may only be
\ntaken, (1) prior to the date of the annual meeting in 1990, by the affirmative
\nvote of the holders of at least eighty percent (80%) of the outstanding shares
\nof capital stock of the Company entitled to vote thereon, considered for the
\npurposes of this Section 4 as one class; (2) from the date of the annual meeting
\nin 1990 to, and including the date of the annual meeting in 2000, by the
\naffirmative vote of the holders of at least a majority of the outstanding shares
\nof<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n

capital stock of the Company entitled to vote thereon, considered for the
\npurposes of this Section 4 as one class, provided that during such period said
\nvote may be increased at any time to the affirmative vote of the holders of at
\nleast eighty percent (80%) of the outstanding shares of capital stock of the
\nCompany by a resolution adopted by at least two-thirds (2\/3) of the members of
\nthe whole Board of Directors On October 9, 1990, in accordance with this
\nprovision, the vote required was increased to 80% of the outstanding<\/sup>
\nshares of capital stock of the Company. (This footnote is not a part of the
\nCompany’s Amended Articles of Incorporation, but is included to provide
\nup-to-date information.)<\/p>\n<\/p>\n

; (3) after the date of the annual meeting in 2000, by the affirmative vote
\nof the holders of at least a majority of the outstanding shares of capital stock
\nof the Company entitled to vote thereon, considered for the purposes of this
\nSection 4 as one class.<\/p>\n<\/p>\n<\/p>\n

Seventh:<\/em> No holder of shares of any class shall have the right to
\nvote cumulatively in the election of Directors.<\/p>\n<\/p>\n<\/p>\n

Eighth:<\/em> Each nominee for director shall be elected to the Board of
\nDirectors by a vote of the majority of the votes cast with respect to such
\nnominee at any meeting of shareholders for the election of directors at which a
\nquorum is present; provided, however, that if the number of nominees for
\ndirectors exceeds the number of directors to be elected, the nominees receiving
\nthe greatest number of votes (up to the number of directors to be elected) shall
\nbe elected. For purposes of this provision, a majority of the votes cast means
\nthat the number of shares voted “for” a nominee must exceed the number of votes
\ncast “against” that nominee.<\/p>\n<\/p>\n<\/p>\n<\/p>\n<\/p>\n

A-14<\/p>\n

\n<\/p>\n

\n\n\n\n\n
<\/td>\n<\/td>\n<\/tr>\n
\n

APPENDIX A<\/strong><\/p>\n<\/td>\n

\n

As a result of four two-for-one stock splits on the Common Stock effective
\nOctober 20, 1989, May 15, 1992, August 22, 1997 and May 21, 2004, and the
\nSmucker transaction effective June 1, 2002, the Conversion Price, Liquidation
\nPrice and Preferred Dividend Rate were all adjusted in accordance with the terms
\nof paragraph 9(A)(1) of this Appendix A to be as follows: Conversion Price —
\n$6.82; Liquidation Price — $6.82; Preferred Dividend Rate — $.5036075 per
\nshare per annum, with a corresponding change in the quarterly dividend payment.
\n(This footnote is not a part of the Company’s Amended Articles of Incorporation
\nbut is included to provide up-to-date information on the status of Series A ESOP
\nConvertible Class A Preferred Stock.)<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n<\/p>\n

\n

SERIES A ESOP CONVERTIBLE CLASS A PREFERRED
\nSTOCK<\/strong><\/p>\n

\n

(hereinafter referred to as Series A Preferred
\nStock)<\/strong><\/p>\n

\n<\/p>\n

\n

1.<\/strong> Issuance and Cancellation.<\/strong><\/p>\n<\/p>\n<\/p>\n

(A) All shares of Series A Preferred Stock redeemed or purchased by the
\nCompany shall be retired and shall be restored to the status of authorized but
\nunissued shares of Class A Preferred Stock.<\/p>\n<\/p>\n<\/p>\n

(B) Shares of Series A Preferred Stock shall be issued only to a trustee or
\ntrustees acting on behalf of an employee stock ownership trust or plan or other
\nemployee benefit plan of the Company. In the event of any transfer of shares of
\nSeries A Preferred Stock to any person other than any such plan trustee or
\ntrustees, the shares of Series A Preferred Stock so transferred, upon such
\ntransfer and without any further action by the Company or the holder, shall be
\nautomatically converted into shares of Common Stock on the terms otherwise
\nprovided for the conversion of shares of Series A Preferred Stock into shares of
\nCommon Stock pursuant to Section 5 hereof and no such transferee shall have any
\nof the voting powers, preferences and relative, participating, optional or
\nspecial rights ascribed to shares of Series A Preferred Stock hereunder but,
\nrather, only the powers and rights pertaining to the Common Stock into which
\nsuch shares of Series A Preferred Stock shall be so converted. Certificates
\nrepresenting shares of Series A Preferred Stock shall be legended to reflect
\nsuch restrictions on transfer. Notwithstanding the foregoing provisions of this
\nSection 1, shares of Series A Preferred Stock (i) may be converted into shares
\nof Common Stock as provided by Section 5 hereof and the shares of Common Stock
\nissued upon such conversion may be transferred by the holder thereof as
\npermitted by law and (ii) shall be redeemable by the Company upon the terms and
\nconditions provided by Sections 6, 7 and 8 hereof.<\/p>\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n<\/p>\n

2.<\/strong> Dividends and Distributions.<\/strong><\/p>\n<\/p>\n<\/p>\n

(A) Subject to the provisions for adjustment hereinafter set forth, the
\nholders of shares of Series A Preferred Stock shall be entitled to receive, when
\nand as declared by the Board of Directors out of funds legally available
\ntherefor, cash dividends (“Preferred Dividends”) in an amount per share
\ninitially equal to $8.124<\/sup> per share per annum, subject to adjustment
\nfrom time to time as hereinafter provided, (such amount, as adjusted from time
\nto time, being hereinafter referred to as the “Preferred Dividend Rate”),
\npayable quarterly, one-fourth on the third day of March, one-fourth on the third
\nday of June, one-fourth on the third day of September, and one-fourth on the
\nthird day of December of each year (each a “Dividend Payment Date”) commencing
\non June 3, 1989, to holders of record at the start of business on such Dividend
\nPayment Date, provided that if the Board of Directors has declared since the
\nprior Dividend Payment Date a quarterly dividend on the Common Stock at a rate
\nthat exceeds one-fourth of the Preferred Dividend Rate in effect on such day,
\nthe holders of record on the start of business on the record date for such
\ndividend on the Common Stock shall be entitled to receive a cash dividend in an
\namount per share equal to the quarterly dividend declared on a share of Common
\nStock, payable on the same date as such dividend on the Common Stock, and
\nprovided further that the Dividend Payment Date for the Series A Preferred Stock
\nshall thereafter be the same date as the record date for the dividend on the
\nCommon Stock or if no dividend is declared on the Common Stock in any quarter,
\nthe Dividend Payment Date shall be, as appropriate, the fifteenth day of
\nFebruary, May, August or November or if such days are not a day on which the New
\nYork Stock Exchange is open for business, then the next preceding day when the
\nNew York Stock Exchange is open for business. Preferred Dividends shall begin to
\naccrue on outstanding shares of Series A Preferred Stock from the date of
\nissuance of such shares of Series A Preferred Stock. Preferred Dividends shall
\naccrue on a daily basis, based on the Preferred Dividend Rate in effect on such
\nday, whether or not the Company shall have earnings or surplus at the time, but
\nPreferred Dividends accrued after March 3, 1989 on the shares of Series A
\nPreferred Stock for any period less than a full quarterly period between
\nDividend Payment Dates shall be computed on the basis of a 360-day year of
\n30-day months. A full quarterly dividend payment of $2.034<\/sup> per share
\nshall accrue for the period from the date of issuance until June 3, 1989.
\nAccumulated but unpaid Preferred Dividends shall cumulate as of the Dividend
\nPayment Date on which they first become payable, but no interest shall accrue on
\naccumulated but unpaid Preferred Dividends.<\/p>\n<\/p>\n<\/p>\n

(B)(1) No full dividends shall be declared or paid or set apart for payment
\non any shares ranking, as to dividends, on a parity with or junior to the Series
\nA Preferred Stock, for any period unless full cumulative dividends have been or
\ncontemporaneously are declared and paid or declared and a sum sufficient for the
\npayment thereof set apart for such payment on the Series A Preferred Stock for
\nall Dividend Payment Dates occurring on or prior to the date of payment of such
\nfull dividends. When dividends are not paid in full, as aforesaid, upon the
\nshares of Series A Preferred Stock shall be declared pro rata so that the amount
\nof dividends declared per share on Series A Preferred Stock and such other
\nparity shares shall in all cases bear to each other the same ratio that
\naccumulated dividends per share on the shares of Series A Preferred Stock and
\nsuch other parity shares bear to each other. Except as otherwise provided in
\nthese Articles, holders of shares of Series A Preferred Stock shall not be
\nentitled to any dividends, whether payable in cash, property or shares, in
\nexcess of full cumulative dividends, as herein provided, on Series A Preferred
\nStock.<\/p>\n<\/p>\n<\/p>\n

(2) So long as any shares of Series A Preferred Stock are outstanding, no
\ndividend (other than dividends or distributions paid in shares of, or options,
\nwarrants or rights to subscribe for or purchase shares of, Common Stock or other
\nshares ranking junior to Series A Preferred Stock as to dividends and other than
\nas provided in paragraph (B)(1) of this Section 2) shall be declared or paid or
\nset aside for payment or other distribution declared or made upon the Common
\nStock or upon any other shares ranking junior to or on a parity with Series A
\nPreferred Stock as to dividends, nor shall any Common Stock or any other shares
\nof the Company ranking junior to or on a parity with Series A Preferred Stock as
\nto dividends be redeemed, purchased or otherwise acquired for any consideration
\n(or any moneys be paid to or made available for a sinking fund for the
\nredemption of any such shares) by the Company (except by conversion into or
\nexchange for shares of the Company ranking junior to Series A Preferred Stock as
\nto dividends) unless, in each case, the full cumulative dividends on all
\noutstanding shares of Series A Preferred Stock shall have been paid.<\/p>\n<\/p>\n<\/p>\n

(3) Any dividend payment made on shares of Series A Preferred Stock shall
\nfirst be credited against the earliest accumulated but unpaid dividend due with
\nrespect to shares of Series A Preferred Stock.<\/p>\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n<\/p>\n

3.<\/strong> Liquidation Preference.<\/strong><\/p>\n<\/p>\n<\/p>\n

(A) In the event of any dissolution or liquidation of the Company, whether
\nvoluntary or involuntary, before any payment or distribution of the assets of
\nthe Company (whether capital or surplus) shall be made to or set apart for the
\nholders of any series or class or classes of stock of the Company ranking junior
\nto Series A Preferred Stock upon dissolution or liquidation, the holders of
\nSeries A Preferred Stock shall be entitled to receive the Liquidation Price (as
\nhereinafter defined) per share in effect at the time of dissolution or
\nliquidation plus an amount equal to all dividends accrued (whether or not
\naccumulated) and unpaid thereon to the date of final distribution to such
\nholders; but such holders shall not be entitled to any further payments. The
\nLiquidation Price per share which holders of Series A Preferred Stock shall
\nreceive upon dissolution or liquidation shall be $110.004<\/sup>, subject to
\nadjustment as hereinafter provided. If, upon any dissolution or liquidation of
\nthe Company, the assets of the Company, or proceeds thereof, distributable among
\nthe holders of Series A Preferred Stock shall be insufficient to pay in full the
\npreferential amount aforesaid and liquidating payments on any other shares
\nranking as to dissolution or liquidation, on a parity with Series A Preferred
\nStock, then such assets, or the proceeds thereof, shall be distributed among the
\nholders of Series A Preferred Stock and any such other shares ratably in
\naccordance with the respective amounts which would be payable on such shares of
\nSeries A Preferred Stock and any such other shares if all amounts payable
\nthereon were paid in full. For the purposes of this Section 3, a consolidation
\nor merger of the Company with one or more corporations shall not be deemed to be
\na dissolution or liquidation, voluntary or involuntary.<\/p>\n<\/p>\n<\/p>\n

(B) Subject to the rights of the holders of shares of any series or class or
\nclasses of stock ranking on a parity with or prior to Series A Preferred Stock
\nupon dissolution or liquidation, upon any dissolution or liquidation of the
\nCompany, after payment shall have been made in full to the holders of Series A
\nPreferred Stock as provided in this Section 3, but not prior thereto, any other
\nseries or class or classes of stock ranking junior to Series A Preferred Stock
\nupon dissolution or liquidation shall, subject to the respective terms and
\nprovisions (if any) applying thereto, be entitled to receive any and all assets
\nremaining to be paid or distributed, and the holders of Series A Preferred Stock
\nshall not be entitled to share therein.<\/p>\n<\/p>\n<\/p>\n

4.<\/strong> Ranking of Shares.<\/strong><\/p>\n<\/p>\n<\/p>\n

Any shares of the Company shall be deemed to rank:<\/p>\n<\/p>\n<\/p>\n

(A) prior to Series A Preferred Stock as to dividends or as to distribution
\nof assets upon dissolution or liquidation, if the holders of such class shall be
\nentitled to the receipt of dividends or of amounts distributable upon
\ndissolution or liquidation, as the case may be, in preference or priority to the
\nholders of Series A Preferred Stock;<\/p>\n<\/p>\n<\/p>\n

(B) on a parity with Series A Preferred Stock as to dividends or as to
\ndistribution of assets upon dissolution or liquidation, whether or not the
\ndividend rates, dividend payment dates, or redemption or liquidation prices per
\nshare thereof be different from those of Series A Preferred Stock, if the
\nholders of such class of stock and Series A Preferred Stock shall be entitled to
\nthe receipt of dividends or of amounts distributable upon dissolution or
\nliquidation, as the case may be, in proportion to their respective dividend or
\nliquidation amounts, as the case may be, without preference or priority one over
\nthe other; and<\/p>\n<\/p>\n<\/p>\n

(C) junior to Series A Preferred Stock as to dividends or as to the
\ndistribution of assets upon dissolution or liquidation, if such shares shall be
\nCommon Stock or if the holders of Series A Preferred Stock shall be entitled to
\nreceipt of dividends or of amounts distributable upon dissolution or
\nliquidation, as the case may be, in preference or priority to the holders of
\nsuch shares.<\/p>\n<\/p>\n<\/p>\n

5.<\/strong> Conversion into Common Stock.<\/strong><\/p>\n<\/p>\n<\/p>\n

(A) A holder of shares of Series A Preferred Stock shall be entitled to cause
\nany or all of such shares to be converted into shares of Common Stock. The
\nnumber of shares of Common Stock into which each share of the Series A Preferred
\nStock may be converted shall be determined by dividing the Liquidation Price in
\neffect at the time of conversion by the Conversion Price (as hereinafter
\ndefined) in effect at the time of conversion. The Conversion<\/p>\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n

Price per share at which shares of Common Stock shall be initially issuable
\nupon conversion of any shares of Series A Preferred Stock shall be
\n$110.004<\/sup>, subject to adjustment as hereinafter provided.<\/p>\n<\/p>\n<\/p>\n

(B) Any holder of shares of Series A Preferred Stock desiring to convert such
\nshares into shares of Common Stock shall surrender, if certificated, the
\ncertificate or certificates representing the shares of Series A Preferred Stock
\nbeing converted, duly assigned or endorsed for transfer to the Company (or
\naccompanied by duly executed stock powers relating thereto), or if
\nuncertificated, a duly executed stock power relating thereto, at the principal
\nexecutive office of the Company or the offices of the transfer agent for the
\nSeries A Preferred Stock or such office or offices in the continental United
\nStates or an agent for conversion as may from time to time be designated by
\nnotice to the holders of the Series A Preferred Stock by the Company or the
\ntransfer agent for the Series A Preferred Stock, accompanied by written notice
\nof conversion. Such notice of conversion shall specify (i) the number of shares
\nof Series A Preferred Stock to be converted and the name or names in which such
\nholder wishes the Common Stock and any shares of Series A Preferred Stock not to
\nbe so converted to be issued, and (ii) the address to which such holder wishes
\ndelivery to be made of a confirmation of such conversion, if uncertificated, or
\nany new certificates which may be issued upon such conversion if certificated.\n<\/p>\n<\/p>\n<\/p>\n

(C) Upon surrender, if certificated, of a certificate representing a share or
\nshares of Series A Preferred Stock for conversion, or if uncertificated, of a
\nduly executed stock power relating thereto, the Company shall issue and send by
\nhand delivery (with receipt to be acknowledged) or by first class mail, postage
\nprepaid, to the holder thereof or to such holder’s designee, at the address
\ndesignated by such holder, if certificated, a certificate or certificates for,
\nor if uncertificated, confirmation of, the number of shares of Common Stock to
\nwhich such holder shall be entitled upon conversion. In the event that there
\nshall have been surrendered shares of Series A Preferred Stock, only part of
\nwhich are to be converted, the Company shall issue and deliver to such holder or
\nsuch holder’s designee, if certificated, a new certificate or certificates
\nrepresenting the number of shares of Series A Preferred Stock which shall not
\nhave been converted, or if uncertificated, confirmation of the number of shares
\nof Series A Preferred Stock which shall not have been converted.<\/p>\n<\/p>\n<\/p>\n

(D) The issuance by the Company of shares of Common Stock upon a conversion
\nof shares of Series A Preferred Stock into shares of Common Stock made at the
\noption of the holder thereof shall be effective as of the earlier of (i) the
\ndelivery to such holder or such holder’s designee of the certificates
\nrepresenting the shares of Common Stock issued upon conversion thereof if
\ncertificated or confirmation if uncertificated or (ii) the commencement of
\nbusiness on the second business day after the surrender of the certificate or
\ncertificates, if certificated, or a duly executed stock power, if
\nuncertificated, for the shares of Series A Preferred Stock to be converted. On
\nand after the effective date of conversion, the person or persons entitled to
\nreceive Common Stock issuable upon such conversion shall be treated for all
\npurposes as the record holder or holders of such shares of Common Stock, but no
\nallowance or adjustment shall be made in respect of dividends payable to holders
\nof Common Stock of record on any date prior to such effective date. The Company
\nshall not be obligated to pay any dividends which shall have been declared and
\nshall be payable to holders of shares of Series A Preferred Stock on a Dividend
\nPayment Date if such Dividend Payment Date for such dividend shall be on or
\nsubsequent to the effective date of conversion of such shares.<\/p>\n<\/p>\n<\/p>\n

(E) The Company shall not be obligated to deliver to holders of Series A
\nPreferred Stock any fractional share or shares of Common Stock issuable upon any
\nconversion of such shares of Series A Preferred Stock, but in lieu thereof may
\nmake cash payment in respect thereof in any manner permitted by law.<\/p>\n<\/p>\n<\/p>\n

(F) The Company shall at all times reserve and keep available out of its
\nauthorized and unissued Common Stock or treasury Common Stock, solely for
\nissuance upon the conversion of shares of Series A Preferred Stock as herein
\nprovided, such number of shares of Common Stock as shall from time to time be
\nissuable upon the conversion of all the shares of Series A Preferred Stock then
\noutstanding.<\/p>\n<\/p>\n<\/p>\n

6.<\/strong> Redemption at the Option of the Company.<\/strong>\n<\/p>\n<\/p>\n<\/p>\n

(A) The Series A Preferred Stock shall be redeemable, in whole or in part, at
\nthe option of the Company at any time after March 3, 1994 (or on or before March
\n3, 1994 if permitted by, and at the redemption price provided in, paragraph (C)
\nof this Section 6) at the following redemption prices per share:<\/p>\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

During the Twelve Month Period<\/strong><\/p>\n

Beginning March 4,<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Price Per<\/strong><\/p>\n

Share<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

1989<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

107.375%<\/strong><\/p>\n<\/td>\n

\n

of Liquidation Price in effect on date fixed for redemption<\/strong>\n<\/p>\n<\/td>\n<\/tr>\n

\n

1990<\/p>\n<\/td>\n

<\/td>\n\n

106.6375%<\/p>\n<\/td>\n

\n

“<\/p>\n<\/td>\n<\/tr>\n

\n

1991<\/p>\n<\/td>\n

<\/td>\n\n

105.9%<\/p>\n<\/td>\n

\n

“<\/p>\n<\/td>\n<\/tr>\n

\n

1992<\/p>\n<\/td>\n

<\/td>\n\n

105.1625%<\/p>\n<\/td>\n

\n

“<\/p>\n<\/td>\n<\/tr>\n

\n

1993<\/p>\n<\/td>\n

<\/td>\n\n

104.425%<\/p>\n<\/td>\n

\n

“<\/p>\n<\/td>\n<\/tr>\n

\n

1994<\/p>\n<\/td>\n

<\/td>\n\n

103.6875%<\/p>\n<\/td>\n

\n

“<\/p>\n<\/td>\n<\/tr>\n

\n

1995<\/p>\n<\/td>\n

<\/td>\n\n

102.9%<\/p>\n<\/td>\n

\n

“<\/p>\n<\/td>\n<\/tr>\n

\n

1996<\/p>\n<\/td>\n

<\/td>\n\n

102.2125%<\/p>\n<\/td>\n

\n

“<\/p>\n<\/td>\n<\/tr>\n

\n

1997<\/p>\n<\/td>\n

<\/td>\n\n

101.475%<\/p>\n<\/td>\n

\n

“<\/p>\n<\/td>\n<\/tr>\n

\n

1998<\/p>\n<\/td>\n

<\/td>\n\n

100.7375%<\/p>\n<\/td>\n

\n

“<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

and thereafter at 100% of the Liquidation Price per share in effect on the
\ndate fixed for redemption, plus, in each case (including in the case of
\nredemptions pursuant to paragraph (C) of this Section 6), an amount equal to all
\naccrued (whether or not accumulated) and unpaid dividends thereon to the date
\nfixed for redemption. Payment of the redemption price shall be made by the
\nCompany in cash or shares of Common Stock, or a combination thereof, as
\npermitted by paragraph (D) of this Section 6. From and after the date fixed for
\nredemption, dividends on shares of Series A Preferred Stock called for
\nredemption will cease to accrue, such shares will no longer be deemed to be
\noutstanding and all rights in respect of such shares of the Company shall cease,
\nexcept the right to receive the redemption price. If less than all of the
\noutstanding shares of Series A Preferred Stock are to be redeemed, the Company
\nshall either redeem a portion of the shares of each holder determined pro rata
\nbased on the number of shares held by each holder or shall select the shares to
\nbe redeemed by lot, as may be determined by the Board of Directors of the
\nCompany.<\/p>\n<\/p>\n<\/p>\n

(B) Unless otherwise required by law, notice of redemption will be sent to
\nthe holders of Series A Preferred Stock at the address shown on the books of the
\nCompany or any transfer agent for Series A Preferred Stock by first class mail,
\npostage prepaid, mailed not less than twenty (20) days nor more than sixty (60)
\ndays prior to the redemption date. Each notice shall state: (i) the redemption
\ndate; (ii) the total number of shares of the Series A Preferred Stock to be
\nredeemed and, if fewer than all the shares held by such holder are to be
\nredeemed, the number of such shares to be redeemed from such holder; (iii) the
\nredemption price; (iv) the place or places where certificates, if certificated,
\nfor such shares are to be surrendered for payment of the redemption price; (v)
\nthat dividends on the shares to be redeemed will cease to accrue on such
\nredemption date; (vi) the conversion rights of the shares to be redeemed, the
\nperiod within which conversion rights may be exercised, and the Conversion Price
\nand number of shares of Common Stock issuable upon conversion of a share of
\nSeries A Preferred Stock at the time. Upon surrender of the certificates, if
\ncertificated, for any shares so called for redemption and not previously
\nconverted, or upon the date fixed for redemption if uncertificated, such shares
\nshall be redeemed by the Company at the date fixed for redemption and at the
\nredemption price set forth in this Section 6.<\/p>\n<\/p>\n<\/p>\n

(C) In the event of (i) a change in the federal tax law of the United States
\nof America which has the effect of precluding the Company from claiming any of
\nthe tax deductions for dividends paid on the Series A Preferred Stock when such
\ndividends are used as provided under Section 404(k)(2) of the Internal Revenue
\nCode of 1986, as amended and in effect on the date shares of Series A Preferred
\nStock are initially issued, or (ii) The Procter & Gamble Profit Sharing
\nTrust and Employee Stock Ownership Plan, as authorized by the Board of Directors
\nof the Company on January 10, 1989, and as amended from time to time thereafter
\nfailing to receive a determination from the Internal Revenue Service that it is
\na qualified plan within the meaning of Section 401(a) or is an employee stock
\nownership plan as described in Section 4975(e)(7) of the Internal Revenue Code
\nof 1986, as amended, and in effect on the date shares of Series A Preferred
\nStock are initially issued, then, in either such event, the Company may, in its
\nsole discretion and notwithstanding anything to the contrary in paragraph (A) of
\nthis Section 6, elect to redeem such shares for the Liquidation Price in effect
\non the date fixed for redemption, plus, in each case, an amount equal to all
\naccrued (whether<\/p>\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n

or not accumulated) and unpaid dividends thereon to the date fixed for
\nredemption. In the event the Company terminates the employee stock ownership
\nplan of The Procter & Gamble Profit Sharing Trust and Employee Stock
\nOwnership Plan, the Company may, in its sole discretion and notwithstanding
\nanything to the contrary in paragraph (A) of this Section 6, elect to redeem
\nsuch shares at the redemption prices per share provided in paragraph (A) of this
\nSection 6.<\/p>\n<\/p>\n<\/p>\n

(D) The Company, at its option, may make payment of the redemption price
\nrequired upon redemption of shares of Series A Preferred Stock in cash or in
\nshares of Common Stock, or in a combination of such shares and cash, any such
\nshares of Common Stock to be valued for such purpose at the average of the high
\nand low reported sales price, or, in case no sale takes place on such day, the
\naverage reported closing bid and asked price, in either case as reported on the
\nNew York Stock Exchange Tape on the date of redemption, or if not listed or
\nadmitted to trading on the New York Stock Exchange, in accordance with the
\nvaluation methods provided in paragraph 9(F)(2).<\/p>\n<\/p>\n<\/p>\n<\/p>\n<\/p>\n

7.<\/strong> Redemption at the Option of the Holder.<\/strong>\n<\/p>\n<\/p>\n<\/p>\n

Unless otherwise provided by law, shares of Series A Preferred Stock shall be
\nredeemed by the Company for cash or, if the Company so elects, in shares of
\nCommon Stock, or a combination of such shares and cash, any such shares of
\nCommon Stock to be valued for such purpose as provided by paragraph (D) of
\nSection 6, at the Liquidation Price per share in effect on the date fixed for
\nredemption plus all accrued (whether or not accumulated) and unpaid dividends
\nthereon to the date fixed for redemption, at the option of the holder, at any
\ntime and from time to time upon notice to the Company given not less than five
\n(5) business days prior to the date fixed by the holder in such notice for
\nredemption, when and to the extent necessary for such holder to provide for
\ndistributions required to be made under, or to satisfy an investment election
\nprovided to participants in accordance with, The Procter & Gamble Profit
\nSharing Trust and Employee Stock Ownership Plan, as the same may be amended, or
\nany successor plan (the “Plan”).<\/p>\n<\/p>\n<\/p>\n

8.<\/strong> Consolidation, Merger, etc.<\/strong><\/p>\n<\/p>\n<\/p>\n

(A) In the event that the Company shall consummate any consolidation or
\nmerger or similar transaction, however named, pursuant to which the outstanding
\nshares of Common Stock are by operation of law exchanged solely for or changed,
\nreclassified or converted solely into shares of any successor or resulting
\ncompany (including the Company) that constitutes “qualifying employer
\nsecurities” with respect to a holder of Series A Preferred Stock within the
\nmeanings of Section 4975(e)(8) of the Internal Revenue Code of 1986, as amended,
\nand Section 407(d)(5) of the Employee Retirement Income Security Act of 1974, as
\namended, or any successor provision of law, and, if applicable, for a cash
\npayment in lieu of fractional shares, if any, then, in such event, the terms of
\nsuch consolidation or merger or similar transaction shall provide that the
\nshares of Series A Preferred Stock of such holder shall be submitted for and
\nshall become preferred shares of such successor or resulting company, having in
\nrespect of such company insofar as possible the same powers, preferences and
\nrelative, participating, optional or other special rights (including the
\nredemption rights provided by Sections 6, 7, and 8 hereof), and the
\nqualifications, limitations or restrictions thereon, that the Series A Preferred
\nStock had immediately prior to such transaction; provided, however, that after
\nsuch transaction each share of the Series A Preferred Stock shall be
\nconvertible, pursuant to the terms and conditions provided by Section 5 hereof,
\ninto the qualifying employer securities so receivable by a holder of the number
\nof shares of Common Stock into which such shares of Series A Preferred Stock
\ncould have been converted immediately prior to such transaction (provided that,
\nif the kind or amount of qualifying employer securities receivable upon such
\ntransaction is not the same for each non-electing share, then the kind and
\namount of qualifying employer securities receivable upon such transaction for
\neach non-electing share shall be the kind and amount so receivable per share by
\na plurality of the non-electing shares). The rights of the Series A Preferred
\nStock as preferred shares of such successor or resulting company shall
\nsuccessively be subject to adjustments pursuant to Section 9 hereof after any
\nsuch transaction as nearly equivalent to the adjustments provided for by such
\nsection prior to such transaction. The Company shall not consummate any such
\nmerger, consolidation or similar transaction unless all the terms of this
\nparagraph 8(A) are complied with.<\/p>\n<\/p>\n<\/p>\n

(B) In the event that the Company shall consummate any consolidation or
\nmerger or similar transaction, however named, pursuant to which the outstanding
\nshares of Common Stock are by operation of law exchanged for or changed,
\nreclassified or converted into other shares or securities or cash or any other
\nproperty, or any combination<\/p>\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n

thereof, other than any such consideration which is constituted solely of
\nqualifying employer securities (as referred to in paragraph (A) of this Section
\n8) and cash payments, if applicable, in lieu of fractional shares, outstanding
\nshares of Series A Preferred Stock shall, without any action on the part of the
\nCompany or any holder thereof (but subject to paragraph (C) of this Section 8),
\nbe deemed converted by virtue of such merger, consolidation or similar
\ntransaction immediately prior to such consummation into the number of shares of
\nCommon Stock into which such shares of Series A Preferred Stock could have been
\nconverted at such time and each share of Series A Preferred Stock shall, by
\nvirtue of such transaction and on the same terms as apply to the holders of
\nCommon Stock, be converted into or exchanged for the aggregate amount of shares,
\nsecurities, cash or other property (payable in like kind) receivable by a holder
\nof the number of shares of Common Stock into which such shares of Series A
\nPreferred Stock could have been converted immediately prior to such transaction
\nif such holder of Common Stock failed to exercise any rights of election as to
\nthe kind or amount of shares, securities, cash or other property receivable upon
\nsuch transaction (provided that, if the kind or amount of shares, securities,
\ncash or other property receivable upon such transaction is not the same for each
\nnon-electing share, then the kind and amount of shares, securities, cash or
\nother property receivable upon such transaction for each non-electing share
\nshall be the kind and amount so receivable per share by a plurality of
\nnon-electing shares).<\/p>\n<\/p>\n<\/p>\n

(C) In the event the Company shall enter into any agreement providing for any
\nconsolidation or merger or similar transaction described in paragraph (B) of
\nthis Section 8, then the Company shall as soon as practicable thereafter (and in
\nany event at least ten (10) business days before consummation of such
\ntransaction) give notice of such agreement and the material terms thereof to
\neach holder of Series A Preferred Stock and each such holder shall have the
\nright to elect, by written notice to the Company, to receive, upon consummation
\nof such transaction (if and when such transaction is consummated), from the
\nCompany or the successor of the Company, in redemption and retirement of such
\nSeries A Preferred Stock, a cash payment equal to the Liquidation Price in
\neffect on the date set for redemption plus all accrued (whether or not
\naccumulated) and unpaid dividends. No such notice of redemption shall be
\neffective unless given to the Company prior to the close of business on the
\nfifth business day prior to consummation of such transaction, unless the Company
\nor the successor of the Company shall waive such prior notice, but any notice of
\nredemption so given prior to such time may be withdrawn by notice of withdrawal
\ngiven to the Company prior to the close of business on the fifth business day
\nprior to consummation of such transaction.<\/p>\n<\/p>\n<\/p>\n

9.<\/strong> Anti-dilution Adjustments.<\/strong><\/p>\n<\/p>\n<\/p>\n

(A)(1) Subject to the provisions of paragraph 9(D), in the event the Company
\nshall, at any time or from time to time while any of the shares of the Series A
\nPreferred Stock are outstanding, (i) pay a dividend or make a distribution in
\nrespect of the Common Stock in shares of Common Stock or (ii) subdivide or
\ncombine the outstanding shares of Common Stock into a greater or lesser number
\nof shares, in each case whether by reclassification of shares, recapitalization
\nof the Company (excluding a recapitalization or reclassification effected by a
\nmerger or consolidation to which Section 8 hereof applies) or otherwise, then,
\nin such event, each share of Series A Preferred Stock will automatically,
\nwithout any action on the part of the holder thereof or the Company, become that
\nnumber of shares of Series A Preferred Stock (the “Non-dilutive Share Amount”)
\nequal to an amount which is a fraction the numerator of which is the number of
\nshares of Common Stock outstanding immediately after such event and the
\ndenominator of which is the number of shares of Common Stock outstanding
\nimmediately before such event. An adjustment pursuant to this paragraph 9(A)(1)
\nshall be effective upon payment of such dividend or distribution in respect of
\nthe Common Stock and in the case of a subdivision or combination shall become
\neffective immediately as of the effective date thereof. Concurrently with the
\nautomatic adjustment pursuant to this paragraph 9(A)(1), the Conversion Price,
\nthe Liquidation Price and the Preferred Dividend Rate of all shares of Series A
\nPreferred Stock shall be adjusted by dividing the Conversion Price, the
\nLiquidation Price and the Preferred Dividend Rate, respectively, in effect
\nimmediately before the event by the Non-dilutive Share Amount determined
\npursuant to this paragraph 9(A)(1).<\/p>\n<\/p>\n<\/p>\n

(2) The Company and the Board of Directors shall each use its best efforts to
\ntake all necessary steps or to take all actions as are necessary or appropriate
\nfor implementation of the automatic adjustment provided in paragraph 9(A)(1). In
\nthe event for any reason the Company is precluded from giving full effect to the
\nautomatic adjustment provided in paragraph 9(A)(1), then no such automatic
\nadjustment shall occur, but instead the Conversion Price shall automatically be
\nadjusted by dividing the Conversion Price in effect immediately before the event
\nby the Non-dilutive Share Amount determined pursuant to paragraph 9(A)(1), and
\nthe Liquidation Price and the Preferred Dividend Rate<\/p>\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n

will not be adjusted. An adjustment to the Conversion Price made pursuant to
\nthis paragraph 9(A)(2) shall be given effect, upon payment of such a dividend or
\ndistribution, as of the record date for the determination of shareholders
\nentitled to receive such dividend or distribution (on a retroactive basis) and
\nin the case of a subdivision or combination shall become effective immediately
\nas of the effective date thereof. If subsequently the Company is able to give
\nfull effect to the automatic adjustment as provided in paragraph 9(A)(1), then
\nsuch automatic adjustment will proceed in accordance with the provisions of
\nparagraph 9(A)(1) and the adjustment in the Conversion Price as provided in this
\nparagraph 9(A)(2) will automatically be reversed and nullified prospectively.\n<\/p>\n<\/p>\n<\/p>\n

(B)(1) Subject to the provisions of paragraph 9(D), in the event the Company
\nshall, at any time or from time to time while any of the shares of Series A
\nPreferred Stock are outstanding, issue to holders of shares of Common Stock as a
\ndividend or distribution, including by way of a reclassification of shares or a
\nrecapitalization of the Company, any right or warrant to purchase shares of
\nCommon Stock (but not including as such a right or warrant any security
\nconvertible into or exchangeable for shares of Common Stock) at a purchase price
\nper share less than the Fair Market Value (as hereinafter defined) of a share of
\nCommon Stock on the date of issuance of such right or warrant, then, in such
\nevent, each share of Series A Preferred Stock will automatically, without any
\naction on the part of the holder thereof or the Company, become that number of
\nshares of Series A Preferred Stock (the “Non-dilutive Share Amount”) equal to an
\namount which is a fraction the numerator of which is the number of shares of
\nCommon Stock outstanding immediately before such issuance of rights or warrants
\nplus the maximum number of shares of Common Stock that could be acquired upon
\nexercise in full of all such rights and warrants and the denominator of which is
\nthe number of shares of Common Stock outstanding immediately before such
\nissuance of rights or warrants plus the number of shares of Common Stock which
\ncould be purchased at the Fair Market Value of a share of Common Stock at the
\ntime of such issuance for the maximum aggregate consideration payable upon
\nexercise in full of all such rights or warrants. Concurrently with the automatic
\nadjustment pursuant to this paragraph 9(B)(1), the Conversion Price, the
\nLiquidation Price and the Preferred Dividend Rate of all shares of Series A
\nPreferred Stock shall be adjusted by dividing the Conversion Price, the
\nLiquidation Price and the Preferred Dividend Rate, respectively, in effect
\nimmediately before such issuance of rights or warrants by the Non-dilutive Share
\nAmount determined pursuant to this paragraph 9(B)(1).<\/p>\n<\/p>\n<\/p>\n

(2) The Company and the Board of Directors shall each use its best efforts to
\ntake all necessary steps or to take all actions as are necessary or appropriate
\nfor implementation of the automatic adjustment provided in paragraph 9(B)(1). In
\nthe event for any reason the Company is precluded from giving full effect to the
\nautomatic adjustment provided in paragraph 9(B)(1), then no such automatic
\nadjustment shall occur, but instead the Conversion Price shall automatically be
\nadjusted by dividing the Conversion Price in effect immediately before such
\nissuance of rights or warrants by the Non-Dilutive Share Amount determined
\npursuant to paragraph 9(B)(1), and the Liquidation Price and Preferred Dividend
\nRate will not be adjusted. If subsequently the Company is able to give full
\neffect to the automatic adjustment as provided in paragraph 9(B)(1), then such
\nautomatic adjustment will proceed in accordance with the provisions of paragraph
\n9(B)(1) and the adjustment in the Conversion Price as provided in this paragraph
\n9(B)(2) will automatically be reversed and nullified prospectively.<\/p>\n<\/p>\n<\/p>\n

(C)(1) Subject to the provisions of paragraph 9(D), in the event the Company
\nshall, at any time or from time to time while any of the shares of Series A
\nPreferred Stock are outstanding, make an Extraordinary Distribution (as
\nhereinafter defined) in respect of the Common Stock, whether by dividend,
\ndistribution, reclassification of shares or recapitalization of the Company
\n(including recapitalization or reclassification effected by a merger or
\nconsolidation to which Section 8 hereof does not apply) or effect a Pro Rata
\nRepurchase (as hereinafter defined) of Common Stock, then, in such event, each
\nshare of Series A Preferred Stock will automatically, without any action on the
\npart of the holder thereof or the Company, become that number of shares of
\nSeries A Preferred Stock (the “Non-dilutive Share Amount”) equal to an amount
\nwhich is a fraction the numerator of which is the product of (a) the number of
\nshares of Common Stock outstanding immediately before such Extraordinary
\nDistribution or Pro Rata Repurchase minus, in the case of a Pro Rata Repurchase,
\nthe number of shares of Common Stock repurchased by the Company multiplied by
\n(b) the Fair Market Value of a share of Common Stock on the record date with
\nrespect to an Extraordinary Distribution or on the applicable expiration date
\n(including all extensions thereof) of any tender offer which is a Pro Rata
\nRepurchase or on the date of purchase with respect to any Pro Rata Repurchase
\nwhich is not a tender offer, as the case may be, and the denominator of which is
\n(i) the Fair Market Value of a share of Common Stock on the record date with
\nrespect to an Extraordinary Distribution, or on the applicable expiration date
\n(including all extensions thereof) of any tender offer which is a Pro Rata
\nRepurchase, or on the date of purchase with respect to any Pro Rata Repurchase
\nwhich is<\/p>\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n

not a tender offer, as the case may be, minus (ii) the Fair Market Value of
\nthe Extraordinary Distribution or the aggregate purchase price of the Pro Rata
\nRepurchase, as the case may be. The Company shall send each holder of Series A
\nPreferred Stock (i) notice of its intent to make any dividend or distribution
\nand (ii) notice of any offer by the Company to make a Pro Rata Repurchase, in
\neach case at the same time as, or as soon as practicable after, such offer is
\nfirst communicated (including by announcement of a record date in accordance
\nwith the rules of any stock exchange on which the Common Stock is listed or
\nadmitted to trading) to holders of Common Stock. Such notice shall indicate the
\nintended record date and the amount and nature of such dividend or distribution,
\nor the number of shares subject to such offer for a Pro Rata Repurchase and the
\npurchase price payable by the Company pursuant to such offer, as well as the
\nConversion Price and the number of shares of Common Stock into which a share of
\nSeries A Preferred Stock may be converted at such time. Concurrently with the
\nautomatic adjustment pursuant to this paragraph 9(C)(1), the Conversion Price,
\nthe Liquidation Price and the Preferred Dividend Rate of all shares of Series A
\nPreferred Stock shall be adjusted by dividing the Conversion Price, the
\nLiquidation Price and the Preferred Dividend Rate, respectively, in effect
\nimmediately before such Extraordinary Distribution or Pro Rata Repurchase by the
\nNon-dilutive Share Amount determined pursuant to this paragraph 9(C)(1).<\/p>\n<\/p>\n<\/p>\n

(2) The Company and the Board of Directors shall each use its best efforts to
\ntake all necessary steps or to take all actions as are necessary or appropriate
\nfor implementation of the automatic adjustment provided in paragraph 9(C)(1). In
\nthe event for any reason the Company is precluded from giving full effect to the
\nautomatic adjustment provided in paragraph 9(C)(1), then no such automatic
\nadjustment shall occur, but instead the Conversion Price shall automatically be
\nadjusted by dividing the Conversion Price in effect immediately before such
\nExtraordinary Distribution or Pro Rata Repurchase by the Non-dilutive Share
\nAmount, and the Liquidation Price and the Preferred Dividend Rate will not be
\nadjusted. If subsequently the Company is able to give full effect to the
\nautomatic adjustment as provided in paragraph 9(C)(1), then such automatic
\nadjustment will proceed in accordance with the provisions of paragraph 9(C)(1)
\nand the adjustment in the Conversion Price as provided in this paragraph 9(C)(2)
\nwill automatically be reversed and nullified prospectively.<\/p>\n<\/p>\n<\/p>\n

(D) Notwithstanding any other provisions of this Section 9, the Company shall
\nnot be required to make (i) any adjustment of the number of issued shares of
\nSeries A Preferred Stock, the Conversion Price, the Liquidation Price or the
\nPreferred Dividend Rate unless such adjustment would require an increase or
\ndecrease of at least one percent (1%) in the number of shares of Series A
\nPreferred Stock outstanding, or, (ii) if no additional shares of Series A
\nPreferred Stock are issued, any adjustment of the Conversion Price unless such
\nadjustment would require an increase or decrease of at least one percent (1%) in
\nthe Conversion Price. Any lesser adjustment shall be carried forward and shall
\nbe made no later than the time of, and together with, the next subsequent
\nadjustment which, together with any adjustment or adjustments so carried
\nforward, shall amount to an increase or decrease of at least one percent (1%) of
\nthe number of Series A Preferred Shares outstanding or, if no additional shares
\nof Series A Preferred Stock are being issued, an increase or decrease of at
\nleast one percent (1%) of the Conversion Price, whichever the case may be.<\/p>\n<\/p>\n<\/p>\n

(E) If the Company shall make any dividend or distribution on the Common
\nStock or issue any Common Stock, other capital stock or other security of the
\nCompany or any rights or warrants to purchase or acquire any such security,
\nwhich transaction does not result in an appropriate adjustment to the number of
\nshares of Series A Preferred Stock outstanding or the Conversion Price pursuant
\nto the foregoing provisions of this Section 9, the Board of Directors of the
\nCompany may, in its sole discretion, consider whether such action is of such a
\nnature that some type of equitable adjustment should be made in respect of such
\ntransaction. If in such case the Board of Directors of the Company determines
\nthat some type of adjustment should be made, an equitable adjustment not
\nrepugnant to law and for the protection of the conversion rights of the Series A
\nPreferred Stock shall be made effective as of such date, as determined by the
\nBoard of Directors of the Company. The determination of the Board of Directors
\nof the Company as to whether some type of adjustment should be made pursuant to
\nthe foregoing provisions of this paragraph 9(E), and, if so, as to what
\nadjustment should be made and when, shall be final and binding on the Company
\nand all shareholders of the Company. The Company shall be entitled to make such
\nadditional adjustments, in addition to those required by the foregoing
\nprovisions of this Section 9, as shall be necessary in order that any dividend
\nor distribution in shares of capital stock of the Company, subdivision,
\nreclassification or combination of shares of the Company or any recapitalization
\nof the Company shall not be taxable to holders of the Common Stock.<\/p>\n<\/p>\n<\/p>\n

(F) For purposes of this Appendix A, the following definitions shall apply:\n<\/p>\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n<\/p>\n

(1) “Extraordinary Distribution” shall mean any dividend or other
\ndistribution (effected while any of the shares of Series A Preferred Stock are
\noutstanding) of (i) cash, where the aggregate amount of such cash dividend or
\ndistribution together with the amount of all cash dividends and distributions
\nmade during the preceding period of twelve (12) months, when combined with the
\naggregate amount of all Pro Rata Repurchases [for this purpose, including only
\nthat portion of the aggregate purchase price of such Pro Rata Repurchase which
\nis in excess of the Fair Market Value of the Common Stock repurchased as
\ndetermined on the applicable expiration date (including all extensions thereof)
\nof any tender offer or exchange offer which is a Pro Rata Repurchase, or the
\ndate of purchase with respect to any other Pro Rata Repurchase which is not a
\ntender offer or exchange offer] made during such period, exceeds twelve and
\none-half percent (12 1\/2%) of the aggregate Fair Market Value of all shares of
\nCommon Stock outstanding on the record date for determining the shareholders
\nentitled to receive such Extraordinary Distribution and (ii) any shares of
\ncapital stock of the Company (other than shares of Common Stock), other
\nsecurities of the Company (other than securities of the type referred to in
\nparagraph (B) of this Section 9), evidences of indebtedness of the Company or
\nany other person or any other property (including shares of any subsidiary of
\nthe Company), or any combination thereof. The Fair Market Value of an
\nExtraordinary Distribution for purposes of paragraph (C) of this Section 9 shall
\nbe the sum of the Fair Market Value of such Extraordinary Distribution plus the
\naggregate amount of any cash dividends or distributions which are not
\nExtraordinary Distributions made during such twelve month period and not
\nincluded in the calculation of any previous adjustment pursuant to paragraph (C)
\nof this Section 9.<\/p>\n<\/p>\n<\/p>\n

(2) “Fair Market Value” shall mean, as to shares of Common Stock or any other
\nclass of capital stock or securities of the Company or any other issuer which
\nare publicly traded, the average of the Current Market Prices (as hereinafter
\ndefined) of such shares or securities for each day of the Adjustment Period (as
\nhereinafter defined). “Current Market Price” of publicly traded shares of Common
\nStock or any other class of capital stock or other security of the Company or
\nany other issuer for a day shall mean the last reported sales price, regular
\nway, or, in case no sale takes place on such day, the average reported closing
\nbid and asked prices, regular way, in either case as reported on the New York
\nStock Exchange Composite Tape or, if such security is not listed or admitted to
\ntrading on the New York Stock Exchange, on the principal national securities
\nexchange on which such security is listed or admitted to trading or, if not
\nlisted or admitted to trading on any national securities exchange, on the NASDAQ
\nNational Market System or, if such security is not quoted on such National
\nMarket System, the average of the closing bid and asked prices on each such day
\nin the over-the-counter market as reported by NASDAQ or, if bid and asked prices
\nfor such security on each such day shall not have been reported through NASDAQ,
\nthe average of the bid and asked prices for such day as furnished by any New
\nYork Stock Exchange member firm regularly making a market in such security
\nselected for such purpose by the Board of Directors of the Company on each
\ntrading day during the Adjustment Period. “Adjustment Period” shall mean the
\nperiod of five (5) consecutive trading days, selected by the Board of Directors
\nof the Company, during the twenty (20) trading days preceding, and including,
\nthe date as of which the Fair Market Value of a security is to be determined.
\nThe “Fair Market Value” of any security which is not publicly traded or of any
\nother property shall mean the fair value thereof as determined by an independent
\ninvestment banking or appraisal firm experienced in the valuation of such
\nsecurities or property selected in good faith by the Board of Directors of the
\nCompany, or, if no such investment banking or appraisal firm is in the good
\nfaith judgment of the Board of Directors of the Company available to make such
\ndetermination, as determined in good faith by the Board of Directors of the
\nCompany.<\/p>\n<\/p>\n<\/p>\n

(3) “Pro Rata Repurchase” shall mean any purchase of shares of Common Stock
\nby the Company or any subsidiary thereof, whether for cash, shares of capital
\nstock of the Company, other securities of the Company, evidences of indebtedness
\nof the Company or any other person or any other property (including shares of a
\nsubsidiary of the Company), or any combination thereof, effected while any of
\nthe shares of Series A Preferred Stock are outstanding, pursuant to any tender
\noffer or exchange offer subject to Section 13(e) of the Securities Exchange Act
\nof 1934, as amended (the “Exchange Act”), or any successor provision of law, or
\npursuant to any other offer available to substantially all holders of Common
\nStock; provided, however, that no purchase of shares by the Company or any
\nsubsidiary thereof made in open market transactions shall be deemed a Pro Rata
\nRepurchase. For purposes of this paragraph 9(F), shares shall be deemed to have
\nbeen purchased by the Company or any subsidiary thereof “in open market
\ntransactions” if they have been purchased substantially in accordance with the
\nrequirements of Rule 10b-18 as in effect under the Exchange Act on the date
\nshares of Series A Preferred Stock are initially issued by the Company or on
\nsuch other terms and conditions as the Board of Directors of the Company shall
\nhave determined are reasonably designed to prevent such purchases from having a
\nmaterial effect on the trading market for the Common Stock.<\/p>\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n<\/p>\n

(G) Whenever an adjustment increasing the number of shares of Series A
\nPreferred Stock outstanding is required pursuant to this Appendix A, the Board
\nof Directors shall take such action as is necessary so that a sufficient number
\nof shares of Series A Preferred Stock are designated with respect to such
\nincrease resulting from such adjustment. Whenever an adjustment to the
\nConversion Price, the Liquidation Price or the Preferred Dividend Rate of the
\nSeries A Preferred Stock is required pursuant to this Appendix A, the Company
\nshall forthwith place on file with the transfer agent for the Common Stock and
\nthe Series A Preferred Stock if there be one, and with the Treasurer of the
\nCompany, a statement signed by the Treasurer or Assistant Treasurer of the
\nCompany stating the adjusted Conversion Price, Liquidation Price and Preferred
\nDividend Rate determined as provided herein. Such statement shall set forth in
\nreasonable detail such facts as shall be necessary to show the reason and the
\nmanner of computing such adjustment, including any determination of Fair Market
\nValue involved in such computation. Promptly after each adjustment to the number
\nof shares of Series A Preferred Stock outstanding, the Conversion Price, the
\nLiquidation Price or the Preferred Dividend Rate, the Company shall mail a
\nnotice thereof and of the then prevailing number of shares of Series A Preferred
\nStock outstanding, the Conversion Price, the Liquidation Price and the Preferred
\nDividend Rate to each holder of shares of Series A Preferred Stock.<\/p>\n<\/p>\n<\/p>\n

10.<\/strong> Miscellaneous.<\/strong><\/p>\n<\/p>\n<\/p>\n

(A) All notices referred to herein shall be in writing, and all notices
\nhereunder shall be deemed to have been given upon the earlier of receipt thereof
\nor three (3) business days after the mailing thereof if sent by registered mail
\n(unless first-class mail shall be specifically permitted for such notice under
\nthe terms of this Appendix A) with postage prepaid, addressed: (i) if to the
\nCompany, to its office at One Procter & Gamble Plaza, Cincinnati, Ohio 45202
\n(Attention: Treasurer) or to the transfer agent for the Series A Preferred
\nStock, or other agent of the Company designated as permitted by this Appendix A
\nor (ii) if to any holder of the Series A Preferred Stock or Common Stock, as the
\ncase may be, to such holder at the address of such holder as listed in the stock
\nrecord books of the Company (which may include the records of any transfer agent
\nfor the Series A Preferred Stock or Common Stock, as the case may be) or (iii)
\nto such other address as the Company or any such holder, as the case may be,
\nshall have designated by notice similarly given.<\/p>\n<\/p>\n<\/p>\n

(B) The term “Common Stock” as used in this Appendix A means the Company’s
\nCommon Stock without par value, as the same exists at the date of filing of the
\nAmendment to the Company’s Amended Articles of Incorporation first designating
\nSeries A Preferred Stock, or any other class of stock resulting from successive
\nchanges or reclassifications of such Common Stock consisting solely of changes
\nin par value, or from par value to without par value, or from without par value
\nto par value. In the event that, at any time as a result of an adjustment made
\npursuant to Section 9 of this Appendix A, the holder of any share of the Series
\nA Preferred Stock upon thereafter surrendering such shares for conversion shall
\nbecome entitled to receive any shares or other securities of the Company other
\nthan shares of Common Stock, the anti-dilution provisions contained in Section 9
\nhereof shall apply in a manner and on terms as nearly equivalent as practicable
\nto the provisions with respect to Common Stock, and the provisions of Sections 1
\nthrough 8 and 10 of this Appendix A with respect to the Common Stock shall apply
\non like or similar terms to any such other shares or securities.<\/p>\n<\/p>\n<\/p>\n

(C) The Company shall pay any and all stock transfer and documentary stamp
\ntaxes that may be payable in respect of any issuance or delivery of shares of
\nSeries A Preferred Stock or shares of Common Stock or other securities issued on
\naccount of Series A Preferred Stock pursuant hereto or certificates representing
\nsuch shares or securities. The Company shall not, however, be required to pay
\nany such tax which may be payable in respect of any transfer involved in the
\nissuance or delivery of shares of Series A Preferred Stock or Common Stock or
\nother securities in a name other than that in which the shares of Series A
\nPreferred Stock with respect to which such shares or other securities are issued
\nor delivered were registered, or in respect of any payment to any person with
\nrespect to any such shares or securities other than a payment to the registered
\nholder thereof, and shall not be required to make any such issuance, delivery or
\npayment unless and until the person otherwise entitled to such issuance,
\ndelivery or payment has paid to the Company the amount of any such tax or has
\nestablished, to the satisfaction of the Company, that such tax has been paid or
\nis not payable.<\/p>\n<\/p>\n<\/p>\n

(D) In the event that a holder of shares of Series A Preferred Stock shall
\nnot by written notice designate<\/p>\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n

the name in which shares of Common Stock to be issued upon conversion of such
\nshares should be registered or to whom payment upon redemption of shares of
\nSeries A Preferred Stock should be made or the address to which the certificate
\nor certificates representing such shares, or such payment, should be sent, the
\nCompany shall be entitled to register such shares, and make such payment, in the
\nname of the holder of such Series a Preferred Stock as shown on the records of
\nthe Company and to send the certificate or certificates or other documentation
\nrepresenting such shares, or such payment, to the address of such holder shown
\non the records of the Company.<\/p>\n<\/p>\n<\/p>\n

(E) The Company may appoint, and from time to time discharge and change, a
\ntransfer agent for the Series A Preferred Stock. Upon any such appointment or
\ndischarge of a transfer agent, the Company shall send notice thereof by
\nfirst-class mail, postage prepaid, to each holder of record of Series A
\nPreferred Stock.<\/p>\n<\/p>\n

B-14<\/p>\n

\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/tr>\n
\n

APPENDIX B<\/strong><\/p>\n<\/td>\n

\n

As a result of two two-for-one stock splits on the Common Stock effective
\nAugust 22, 1997 and May 21, 2004 and the Smucker transaction effective June 1,
\n2002, the Conversion Price, Liquidation Price and Preferred Dividend Rate were
\nall adjusted in accordance with the terms of paragraph 9(A)(1) of this Appendix
\nB to be as follows: Conversion Price — $12.96; Liquidation Price — $12.96;
\nPreferred Dividend Rate — $1.022 per share per annum, with a corresponding
\nchange in the quarterly dividend payment. (This footnote is not a part of the
\nCompany’s Amended Articles of Incorporation but is included to provide
\nup-to-date information on the status of Series B ESOP Convertible Class A
\nPreferred Stock.)<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

\n<\/p>\n

\n

SERIES B ESOP CONVERTIBLE CLASS A PREFERRED
\nSTOCK<\/strong><\/p>\n

\n

(hereinafter referred to as Series B Preferred
\nStock)<\/strong><\/p>\n

\n<\/p>\n

\n

1.<\/strong> Cancellation.<\/strong><\/p>\n<\/p>\n<\/p>\n

All shares of Series B Preferred Stock redeemed or purchased by the Company
\nshall be retired and shall be restored to the status of authorized but unissued
\nshares of Class A Preferred Stock.<\/p>\n<\/p>\n<\/p>\n

2.<\/strong> Dividends and Distributions.<\/strong><\/p>\n<\/p>\n<\/p>\n

(A) Subject to the provisions for adjustment hereinafter set forth, the
\nholders of shares of Series B Preferred Stock shall be entitled to receive, when
\nand as declared by the Board of Directors out of funds legally available
\ntherefor, cash dividends (“Series B Preferred Dividends”) in an amount per share
\ninitially equal to $4.125<\/sup> per share per annum, subject to adjustment
\nfrom time to time as hereinafter provided, (such amount, as adjusted from time
\nto time, being hereinafter referred to as the “Series B Preferred Dividend
\nRate”), payable quarterly, one-fourth on the twenty-seventh day of November,
\none-fourth on the twenty-seventh day of February, one-fourth on the
\ntwenty-seventh day of May, and one-fourth on the twenty-seventh day of August of
\neach year (each a “Series B Dividend Payment Date”) commencing on August 27,
\n1993, to holders of record at the close of business on the second Friday of the
\nrelevant Series B Dividend Payment Date month, provided that if the Board of
\nDirectors has declared since the prior Dividend Payment Date a quarterly
\ndividend on the Common Stock at a rate that exceeds one-fourth of the Preferred
\nDividend Rate in effect on such day, the holders of record on the start of
\nbusiness on the record date for such dividend on the Common Stock shall be
\nentitled to receive a cash dividend in an amount per share equal to the
\nquarterly dividend declared on a share of Common Stock, payable on the same date
\nas such dividend on the Common Stock, and provided further that the Dividend
\nPayment Date for the Series B Preferred Stock shall thereafter be the same date
\nas the record date for the dividend on the Common Stock or if no dividend is
\ndeclared on the Common Stock in any quarter, the Dividend Payment Date shall be,
\nas appropriate, the fifteenth day of February, May, August or November or if
\nsuch days are not a day on which the New York Stock Exchange is open for
\nbusiness, then the next preceding day when the New York Stock Exchange is open
\nfor business. Series B Preferred Dividends shall begin to accrue on outstanding
\nshares of Series B Preferred Stock from the date of issuance of such shares of
\nSeries B Preferred Stock. Series B Preferred Dividends shall accrue on a daily
\nbasis, based on the Series B Preferred Dividend Rate in effect on such day,
\nwhether or not the Company shall have earnings or surplus at the time, but
\nSeries B Preferred Dividends accrued after June 30, 1993 on the shares of Series
\nB Preferred Stock for any period less than a full quarterly period between
\nSeries B Dividend Payment Dates shall be computed on the basis of a 360-day year
\nof 30-day months. A partial dividend payment of $.649355<\/sup> per share
\nshall accrue for the period from the date of issuance until August 27, 1993.
\nAccumulated but unpaid Series B Preferred Dividends shall cumulate as of the
\nSeries B Dividend Payment Date on which they first<\/p>\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n

become payable, but no interest shall accrue on accumulated but unpaid Series
\nB Preferred Dividends.<\/p>\n<\/p>\n<\/p>\n

(B)(1) No full dividends shall be declared or paid or set apart for payment
\non any shares ranking, as to dividends, on a parity with or junior to the Series
\nB Preferred Stock, for any period unless full cumulative dividends have been or
\ncontemporaneously are declared and paid or declared and a sum sufficient for the
\npayment thereof set apart for such payment on the Series B Preferred Stock for
\nall Series B Dividend Payment Dates occurring on or prior to the date of payment
\nof such full dividends. When dividends are not paid in full, as aforesaid, upon
\nthe shares of Series B Preferred Stock and any other shares ranking, as to
\ndividends, on a parity with Series B Preferred Stock, all dividends declared
\nupon shares of Series B Preferred Stock shall be declared pro rata so that the
\namount of dividends declared per share on Series B Preferred Stock and such
\nother parity shares shall in all cases bear to each other the same ratio that
\naccumulated dividends per share on the shares of Series B Preferred Stock and
\nsuch other parity shares bear to each other. Except as otherwise provided in
\nthese Articles, holders of shares of Series B Preferred Stock shall not be
\nentitled to any dividends, whether payable in cash, property or shares, in
\nexcess of full cumulative dividends, as herein provided, on Series B Preferred
\nStock.<\/p>\n<\/p>\n<\/p>\n

(2) So long as any shares of Series B Preferred Stock are outstanding, no
\ndividend (other than dividends or distributions paid in shares of, or options,
\nwarrants or rights to subscribe for or purchase shares of, Common Stock or other
\nshares ranking junior to Series B Preferred Stock as to dividends and other than
\nas provided in paragraph (B)(1) of this Section 2) shall be declared or paid or
\nset aside for payment or other distribution declared or made upon the Common
\nStock or upon any other shares ranking junior to or on a parity with Series B
\nPreferred Stock as to dividends, nor shall any Common Stock or any other shares
\nof the Company ranking junior to or on a parity with Series B Preferred Stock as
\nto dividends be redeemed, purchased or otherwise acquired for any consideration
\n(or any moneys be paid to or made available for a sinking fund for the
\nredemption of any such shares) by the Company (except by conversion into or
\nexchange for shares of the Company ranking junior to Series B Preferred Stock as
\nto dividends) unless, in each case, the full cumulative dividends on all
\noutstanding shares of Series B Preferred Stock shall have been paid.<\/p>\n<\/p>\n<\/p>\n

(3) Any dividend payment made on shares of Series B Preferred Stock shall
\nfirst be credited against the earliest accumulated but unpaid dividend due with
\nrespect to shares of Series B Preferred Stock.<\/p>\n<\/p>\n<\/p>\n

3.<\/strong> Liquidation Preference.<\/strong><\/p>\n<\/p>\n<\/p>\n

(A) In the event of any dissolution or liquidation of the Company, whether
\nvoluntary or involuntary, before any payment or distribution of the assets of
\nthe Company (whether capital or surplus) shall be made to or set apart for the
\nholders of any series or class or classes of stock of the Company ranking junior
\nto Series B Preferred Stock upon dissolution or liquidation, the holders of
\nSeries B Preferred Stock shall be entitled to receive the Series B Liquidation
\nPrice (as hereinafter defined) per share in effect at the time of dissolution or
\nliquidation plus an amount equal to all dividends accrued (whether or not
\naccumulated) and unpaid thereon to the date of final distribution to such
\nholders; but such holders shall not be entitled to any further payments. The
\nSeries B Liquidation Price per share which holders of Series B Preferred Stock
\nshall receive upon dissolution or liquidation shall be $52.245<\/sup>,
\nsubject to adjustment as hereinafter provided. If, upon any dissolution or
\nliquidation of the Company, the assets of the Company, or proceeds thereof,
\ndistributable among the holders of Series B Preferred Stock shall be
\ninsufficient to pay in full the preferential amount aforesaid and liquidating
\npayments on any other shares ranking as to dissolution or liquidation, on a
\nparity with Series B Preferred Stock, then such assets, or the proceeds thereof,
\nshall be distributed among the holders of Series B Preferred Stock and any such
\nother shares ratably in accordance with the respective amounts which would be
\npayable on such shares of Series B Preferred Stock and any such other shares if
\nall amounts payable thereon were paid in full. For the purposes of this Section
\n3, a consolidation or merger of the Company with one or more corporations shall
\nnot be deemed to be a dissolution or liquidation, voluntary or involuntary.<\/p>\n<\/p>\n<\/p>\n

(B) Subject to the rights of the holders of shares of any series or class or
\nclasses of stock ranking on a parity with or prior to Series B Preferred Stock
\nupon dissolution or liquidation, upon any dissolution or liquidation of the
\nCompany, after payment shall have been made in full to the holders of Series B
\nPreferred Stock as provided in this Section 3, but not prior thereto, any other
\nseries or class or classes of stock ranking junior to Series B Preferred Stock
\nupon dissolution or liquidation shall, subject to the respective terms and
\nprovisions (if any) applying thereto, be entitled to receive any and all assets
\nremaining to be paid or distributed, and the holders of Series B Preferred Stock
\nshall not<\/p>\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n

be entitled to share therein.<\/p>\n<\/p>\n<\/p>\n

4.<\/strong> Ranking of Shares.<\/strong><\/p>\n<\/p>\n<\/p>\n

Any shares of the Company shall be deemed to rank:<\/p>\n<\/p>\n<\/p>\n

(A) prior to Series B Preferred Stock as to dividends or as to distribution
\nof assets upon dissolution or liquidation, if the holders of such class shall be
\nentitled to the receipt of dividends or of amounts distributable upon
\ndissolution or liquidation, as the case may be, in preference or priority to the
\nholders of Series B Preferred Stock;<\/p>\n<\/p>\n<\/p>\n

(B) on a parity with Series B Preferred Stock as to dividends or as to
\ndistribution of assets upon dissolution or liquidation, whether or not the
\ndividend rates, dividend payment dates, or redemption or liquidation prices per
\nshare thereof be different from those of Series B Preferred Stock, if the
\nholders of such class of stock and Series B Preferred Stock shall be entitled to
\nthe receipt of dividends or of amounts distributable upon dissolution or
\nliquidation, as the case may be, in proportion to their respective dividend or
\nliquidation amounts, as the case may be, without preference or priority one over
\nthe other; and<\/p>\n<\/p>\n<\/p>\n

(C) junior to Series B Preferred Stock as to dividends or as to the
\ndistribution of assets upon dissolution or liquidation, if such shares shall be
\nCommon Stock or if the holders of Series B Preferred Stock shall be entitled to
\nreceipt of dividends or of amounts distributable upon dissolution or
\nliquidation, as the case may be, in preference or priority to the holders of
\nsuch shares.<\/p>\n<\/p>\n<\/p>\n

5.<\/strong> Conversion into Common Stock.<\/strong><\/p>\n<\/p>\n<\/p>\n

(A) A holder of shares of Series B Preferred Stock shall be entitled to cause
\nany or all of such shares to be converted into shares of Common Stock. The
\nnumber of shares of Common Stock into which each share of the Series B Preferred
\nStock may be converted shall be determined by dividing the Series B Liquidation
\nPrice in effect at the time of conversion by the Series B Conversion Price (as
\nhereinafter defined) in effect at the time of conversion. The Series B
\nConversion Price per share at which shares of Common Stock shall be initially
\nissuable upon conversion of any shares of Series B Preferred Stock shall be
\n$52.245<\/sup>, subject to adjustment as hereinafter provided.<\/p>\n<\/p>\n<\/p>\n

(B) Any holder of shares of Series B Preferred Stock desiring to convert such
\nshares into shares of Common Stock shall surrender, if certificated, the
\ncertificate or certificates representing the shares of Series B Preferred Stock
\nbeing converted, duly assigned or endorsed for transfer to the Company (or
\naccompanied by duly executed stock powers relating thereto), or if
\nuncertificated, a duly executed stock power relating thereto, at the principal
\nexecutive office of the Company or the offices of the transfer agent for the
\nSeries B Preferred Stock or such office or offices in the continental United
\nStates or an agent for conversion as may from time to time be designated by
\nnotice to the holders of the Series B Preferred Stock by the Company or the
\ntransfer agent for the Series B Preferred Stock, accompanied by written notice
\nof conversion. Such notice of conversion shall specify (i) the number of shares
\nof Series B Preferred Stock to be converted and the name or names in which such
\nholder wishes the Common Stock and any shares of Series B Preferred Stock not to
\nbe so converted to be issued, and (ii) the address to which such holder wishes
\ndelivery to be made of a confirmation of such conversion, if uncertificated, or
\nany new certificates which may be issued upon such conversion if certificated.\n<\/p>\n<\/p>\n<\/p>\n

(C) Upon surrender, if certificated, of a certificate representing a share or
\nshares of Series B Preferred Stock for conversion, or if uncertificated, of a
\nduly executed stock power relating thereto, the Company shall issue and send by
\nhand delivery (with receipt to be acknowledged) or by first class mail, postage
\nprepaid, to the holder thereof or to such holder’s designee, at the address
\ndesignated by such holder, if certificated, a certificate or certificates for,
\nor if uncertificated, confirmation of, the number of shares of Common Stock to
\nwhich such holder shall be entitled upon conversion. In the event that there
\nshall have been surrendered shares of Series B Preferred Stock, only part of
\nwhich are to be converted, the Company shall issue and deliver to such holder or
\nsuch holder’s designee, if certificated, a new certificate or certificates
\nrepresenting the number of shares of Series B Preferred Stock which shall not
\nhave been converted, or if uncertificated, confirmation of the number of shares
\nof Series B Preferred Stock which shall not have been converted.<\/p>\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n<\/p>\n

(D) The issuance by the Company of shares of Common Stock upon a conversion
\nof shares of Series B Preferred Stock into shares of Common Stock made at the
\noption of the holder thereof shall be effective as of the earlier of (i) the
\ndelivery to such holder or such holder’s designee of the certificates
\nrepresenting the shares of Common Stock issued upon conversion thereof if
\ncertificated or confirmation if uncertificated or (ii) the commencement of
\nbusiness on the second business day after the surrender of the certificate or
\ncertificates, if certificated, or a duly executed stock power, if
\nuncertificated, for the shares of Series B Preferred Stock to be converted. On
\nand after the effective date of conversion, the person or persons entitled to
\nreceive Common Stock issuable upon such conversion shall be treated for all
\npurposes as the record holder or holders of such shares of Common Stock, but no
\nallowance or adjustment shall be made in respect of dividends payable to holders
\nof Common Stock of record on any date prior to such effective date. The Company
\nshall not be obligated to pay any dividends which shall have been declared and
\nshall be payable to holders of shares of Series B Preferred Stock on a Series B
\nDividend Payment Date if such Series B Dividend Payment Date for such dividend
\nshall be on or subsequent to the effective date of conversion of such shares.\n<\/p>\n<\/p>\n<\/p>\n

(E) The Company shall not be obligated to deliver to holders of Series B
\nPreferred Stock any fractional share or shares of Common Stock issuable upon any
\nconversion of such shares of Series B Preferred Stock, but in lieu thereof may
\nmake cash payment in respect thereof in any manner permitted by law.<\/p>\n<\/p>\n<\/p>\n

(F) The Company shall at all times reserve and keep available out of its
\nauthorized and unissued Common Stock or treasury Common Stock, solely for
\nissuance upon the conversion of shares of Series B Preferred Stock as herein
\nprovided, such number of shares of Common Stock as shall from time to time be
\nissuable upon the conversion of all the shares of Series B Preferred Stock then
\noutstanding.<\/p>\n<\/p>\n<\/p>\n

6.<\/strong> Redemption at the Option of the Company.<\/strong>\n<\/p>\n<\/p>\n<\/p>\n

(A) The Series B Preferred Stock shall be redeemable, in whole or in part, at
\nthe option of the Company at any time after November 27, 1995 (or on or before
\nNovember 27, 1995 if permitted by, and at the redemption price provided in,
\nparagraph (C) of this Section 6) at the following redemption prices per share:\n<\/p>\n<\/p>\n<\/p>\n\n\n\n\n\n\n\n\n\n\n\n\n
<\/td>\n<\/tr>\n
<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/td>\n<\/tr>\n
\n

During the Twelve Month Period<\/strong><\/p>\n

Beginning November 28,<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

Price Per<\/strong><\/p>\n

Share<\/strong><\/p>\n<\/td>\n

<\/td>\n<\/tr>\n
\n

1993<\/strong><\/p>\n<\/td>\n

<\/td>\n\n

105.5125<\/strong><\/p>\n<\/td>\n

\n

%<\/strong><\/p>\n<\/td>\n

\n

of Series B Liquidation Price in effect on date fixed for
\nredemption<\/strong><\/p>\n<\/td>\n<\/tr>\n

\n

1994<\/p>\n<\/td>\n

<\/td>\n\n

104.725<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

\n

“<\/p>\n<\/td>\n<\/tr>\n

\n

1995<\/p>\n<\/td>\n

<\/td>\n\n

103.9375<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

\n

“<\/p>\n<\/td>\n<\/tr>\n

\n

1996<\/p>\n<\/td>\n

<\/td>\n\n

103.15<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

\n

“<\/p>\n<\/td>\n<\/tr>\n

\n

1997<\/p>\n<\/td>\n

<\/td>\n\n

102.3625<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

\n

“<\/p>\n<\/td>\n<\/tr>\n

\n

1998<\/p>\n<\/td>\n

<\/td>\n\n

101.575<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

\n

“<\/p>\n<\/td>\n<\/tr>\n

\n

1999<\/p>\n<\/td>\n

<\/td>\n\n

100.7875<\/p>\n<\/td>\n

\n

%<\/p>\n<\/td>\n

\n

“<\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n

and thereafter at 100% of the Series B Liquidation Price per share in effect
\non the date fixed for redemption, plus, in each case (including in the case of
\nredemptions pursuant to paragraph (C) of this Section 6), an amount equal to all
\naccrued (whether or not accumulated) and unpaid dividends thereon to the date
\nfixed for redemption. Payment of the redemption price shall be made by the
\nCompany in cash or shares of Common Stock, or a combination thereof, as
\npermitted by paragraph (D) of this Section 6. From and after the date fixed for
\nredemption, dividends on shares of Series B Preferred Stock called for
\nredemption will cease to accrue, such shares will no longer be deemed to be
\noutstanding and all rights in respect of such shares of the Company shall cease,
\nexcept the right to receive the redemption price. If less than all of the
\noutstanding shares of Series B Preferred Stock are to be redeemed, the Company
\nshall either redeem a portion of the shares of each holder determined pro rata
\nbased on the number of shares held by each holder or shall select the shares to
\nbe redeemed by lot, as may be determined by the Board of Directors of the
\nCompany.<\/p>\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n<\/p>\n

(B) Unless otherwise required by law, notice of redemption will be sent to
\nthe holders of Series B Preferred Stock at the address shown on the books of the
\nCompany or any transfer agent for Series B Preferred Stock by first class mail,
\npostage prepaid, mailed not less than twenty (20) days nor more than sixty (60)
\ndays prior to the redemption date. Each notice shall state: (i) the redemption
\ndate; (ii) the total number of shares of the Series B Preferred Stock to be
\nredeemed and, if fewer than all the shares held by such holder are to be
\nredeemed, the number of such shares to be redeemed from such holder; (iii) the
\nredemption price; (iv) the place or places where certificates, if certificated,
\nfor such shares are to be surrendered for payment of the redemption price; (v)
\nthat dividends on the shares to be redeemed will cease to accrue on such
\nredemption date; (vi) the conversion rights of the shares to be redeemed, the
\nperiod within which conversion rights may be exercised, and the Series B
\nConversion Price and number of shares of Common Stock issuable upon conversion
\nof a share of Series B Preferred Stock at the time. Upon surrender of the
\ncertificates, if certificated, for any shares so called for redemption and not
\npreviously converted, or upon the date fixed for redemption if uncertificated,
\nsuch shares shall be redeemed by the Company at the date fixed for redemption
\nand at the redemption price set forth in this Section 6.<\/p>\n<\/p>\n<\/p>\n

(C) In the event of (i) a change in the federal tax law of the United States
\nof America which has the effect of precluding the Company from claiming any of
\nthe tax deductions for dividends paid on the Series B Preferred Stock when such
\ndividends are used as provided under Section 404(k)(2) of the Internal Revenue
\nCode of 1986, as amended and in effect on the date shares of Series B Preferred
\nStock are initially issued, or (ii) The Procter & Gamble Profit Sharing
\nTrust and Employee Stock Ownership Plan, as authorized by the Board of Directors
\nof the Company on May 7, 1990, and as amended from time to time thereafter
\nfailing to receive a determination from the Internal Revenue Service that it is
\na qualified plan within the meaning of Section 401(a) or is an employee stock
\nownership plan as described in Section 4975(e)(7) of the Internal Revenue Code
\nof 1986, as amended, and in effect on the date shares of Series B Preferred
\nStock are initially issued, then, in either such event, the Company may, in its
\nsole discretion and notwithstanding anything to the contrary in paragraph (A) of
\nthis Section 6, elect to redeem such shares for the Series B Liquidation Price
\nin effect on the date fixed for redemption, plus, in each case, an amount equal
\nto all accrued (whether or not accumulated) and unpaid dividends thereon to the
\ndate fixed for redemption. In the event the Company terminates the employee
\nstock ownership plan of The Procter & Gamble Profit Sharing Trust and
\nEmployee Stock Ownership Plan or the portion thereof associated with retiree
\nmedical benefits, the Company may, in its sole discretion and notwithstanding
\nanything to the contrary in paragraph (A) of this Section 6, elect to redeem
\nsuch shares at the redemption prices per share provided in paragraph (A) of this
\nSection 6.<\/p>\n<\/p>\n<\/p>\n

(D) The Company, at its option, may make payment of the redemption price
\nrequired upon redemption of shares of Series B Preferred Stock in cash or in
\nshares of Common Stock, or in a combination of such shares and cash, any such
\nshares of Common Stock to be valued for such purpose at the average of the high
\nand low reported sales price, or, in case no sale takes place on such day, the
\naverage reported closing bid and asked price, in either case as reported on the
\nNew York Stock Exchange Tape on the date of redemption, or if not listed or
\nadmitted to trading on the New York Stock Exchange, in accordance with the
\nvaluation methods provided in paragraph 9(F)(2).<\/p>\n<\/p>\n<\/p>\n\n\n\n\n
<\/td>\n<\/td>\n<\/tr>\n
\n

7.<\/strong><\/p>\n<\/td>\n

\n

Redemption to Satisfy Obligations of The Procter & Gamble Profit
\nSharing Trust and Employee Stock Ownership Plan.<\/strong><\/p>\n<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n<\/p>\n

Unless otherwise provided by law, shares of Series B Preferred Stock shall be
\nredeemed by the Company for cash or, if the Company so elects, in shares of
\nCommon Stock, or a combination of such shares and cash, any such shares of
\nCommon Stock to be valued for such purpose as provided by paragraph (D) of
\nSection 6, at the Series B Liquidation Price per share in effect on the date
\nfixed for redemption plus all accrued (whether or not accumulated) and unpaid
\ndividends thereon to the date fixed for redemption, at the option of the holder,
\nat any time and from time to time upon notice to the Company given not less than
\nfive (5) business days prior to the date fixed by the holder in such notice for
\nredemption, when and to the extent necessary for such holder to provide for
\ndistributions required to be made under, or to satisfy an investment election
\nprovided to participants in accordance with, The Procter & Gamble Profit
\nSharing Trust and Employee Stock Ownership Plan, as the same may be amended, or
\nany successor plan (the “Plan”).<\/p>\n<\/p>\n<\/p>\n

8.<\/strong> Consolidation, Merger, etc.<\/strong><\/p>\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n<\/p>\n

(A) In the event that the Company shall consummate any consolidation or
\nmerger or similar transaction, however named, pursuant to which the outstanding
\nshares of Common Stock are by operation of law exchanged solely for or changed,
\nreclassified or converted solely into shares of any successor or resulting
\ncompany (including the Company) that constitutes “qualifying employer
\nsecurities” with respect to a holder of Series B Preferred Stock within the
\nmeanings of Section 4975(e)(8) of the Internal Revenue Code of 1986, as amended,
\nand Section 407(d)(5) of the Employee Retirement Income Security Act of 1974, as
\namended, or any successor provision of law, and, if applicable, for a cash
\npayment in lieu of fractional shares, if any, then, in such event, the terms of
\nsuch consolidation or merger or similar transaction shall provide that the
\nshares of Series B Preferred Stock of such holder shall be submitted for and
\nshall become preferred shares of such successor or resulting company, having in
\nrespect of such company insofar as possible the same powers, preferences and
\nrelative, participating, optional or other special rights (including the
\nredemption rights provided by Sections 6, 7, and 8 hereof), and the
\nqualifications, limitations or restrictions thereon, that the Series B Preferred
\nStock had immediately prior to such transaction; provided, however, that after
\nsuch transaction each share of the Series B Preferred Stock shall be
\nconvertible, pursuant to the terms and conditions provided by Section 5 hereof,
\ninto the qualifying employer securities so receivable by a holder of the number
\nof shares of Common Stock into which such shares of Series B Preferred Stock
\ncould have been converted immediately prior to such transaction (provided that,
\nif the kind or amount of qualifying employer securities receivable upon such
\ntransaction is not the same for each non-electing share, then the kind and
\namount of qualifying employer securities receivable upon such transaction for
\neach non-electing share shall be the kind and amount so receivable per share by
\na plurality of the non-electing shares). The rights of the Series B Preferred
\nStock as preferred shares of such successor or resulting company shall
\nsuccessively be subject to adjustments pursuant to Section 9 hereof after any
\nsuch transaction as nearly equivalent to the adjustments provided for by such
\nsection prior to such transaction. The Company shall not consummate any such
\nmerger, consolidation or similar transaction unless all the terms of this
\nparagraph 8(A) are complied with.<\/p>\n<\/p>\n<\/p>\n

(B) In the event that the Company shall consummate any consolidation or
\nmerger or similar transaction, however named, pursuant to which the outstanding
\nshares of Common Stock are by operation of law exchanged for or changed,
\nreclassified or converted into other shares or securities or cash or any other
\nproperty, or any combination thereof, other than any such consideration which is
\nconstituted solely of qualifying employer securities (as referred to in
\nparagraph (A) of this Section 8) and cash payments, if applicable, in lieu of
\nfractional shares, outstanding shares of Series B Preferred Stock shall, without
\nany action on the part of the Company or any holder thereof (but subject to
\nparagraph (C) of this Section 8, be deemed converted by virtue of such merger,
\nconsolidation or similar transaction immediately prior to such consummation into
\nthe number of shares of Common Stock into which such shares of Series B
\nPreferred Stock could have been converted at such time and each share of Series
\nB Preferred Stock shall, by virtue of such transaction and on the same terms as
\napply to the holders of Common Stock, be converted into or exchanged for the
\naggregate amount of shares, securities, cash or other property (payable in like
\nkind) receivable by a holder of the number of shares of Common Stock into which
\nsuch shares of Series B Preferred Stock could have been converted immediately
\nprior to such transaction if such holder of Common Stock failed to exercise any
\nrights of election as to the kind or amount of shares, securities, cash or other
\nproperty receivable upon such transaction (provided that, if the kind or amount
\nof shares, securities, cash or other property receivable upon such transaction
\nis not the same for each non-electing share, then the kind and amount of shares,
\nsecurities, cash or other property receivable upon such transaction for each
\nnon-electing share shall be the kind and amount so receivable per share by a
\nplurality of non-electing shares).<\/p>\n<\/p>\n<\/p>\n

(C) In the event the Company shall enter into any agreement providing for any
\nconsolidation or merger or similar transaction described in paragraph (B) of
\nthis Section 8, then the Company shall as soon as practicable thereafter (and in
\nany event at least ten (10) business days before consummation of such
\ntransaction) give notice of such agreement and the material terms thereof to
\neach holder of Series B Preferred Stock and each such holder shall have the
\nright to elect, by written notice to the Company, to receive, upon consummation
\nof such transaction (if and when such transaction is consummated), from the
\nCompany or the successor of the Company, in redemption and retirement of such
\nSeries B Preferred Stock, a cash payment equal to the Series B Liquidation Price
\nin effect on the date set for redemption plus all accrued (whether or not
\naccumulated) and unpaid dividends. No such notice of redemption shall be
\neffective unless given to the Company prior to the close of business on the
\nfifth business day prior to consummation of such transaction, unless the Company
\nor the successor of the Company shall waive such prior notice, but any notice of
\nredemption so given prior to such time may be withdrawn by notice of withdrawal
\ngiven to<\/p>\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n

the Company prior to the close of business on the fifth business day prior to
\nconsummation of such transaction.<\/p>\n<\/p>\n<\/p>\n

9.<\/strong> Anti-dilution Adjustments.<\/strong><\/p>\n<\/p>\n<\/p>\n

(A)(1) Subject to the provisions of paragraph 9(D), in the event the Company
\nshall, at any time or from time to time while any of the shares of the Series B
\nPreferred Stock are outstanding, (i) pay a dividend or make a distribution in
\nrespect of the Common Stock in shares of Common Stock or (ii) subdivide or
\ncombine the outstanding shares of Common Stock into a greater or lesser number
\nof shares, in each case whether by reclassification of shares, recapitalization
\nof the Company (excluding a recapitalization or reclassification effected by a
\nmerger or consolidation to which Section 8 hereof applies) or otherwise, then,
\nin such event, each share of Series B Preferred Stock will automatically,
\nwithout any action on the part of the holder thereof or the Company, become that
\nnumber of shares of Series B Preferred Stock (the “Non-dilutive Share Amount”)
\nequal to an amount which is a fraction the numerator of which is the number of
\nshares of Common Stock outstanding immediately after such event and the
\ndenominator of which is the number of shares of Common Stock outstanding
\nimmediately before such event. An adjustment pursuant to this paragraph 9(A)(1)
\nshall be effective upon payment of such dividend or distribution in respect of
\nthe Common Stock and in the case of a subdivision or combination shall become
\neffective immediately as of the effective date thereof. Concurrently with the
\nautomatic adjustment pursuant to this paragraph 9(A)(1), the Series B Conversion
\nPrice, the Series B Liquidation Price and the Series B Preferred Dividend Rate
\nof all shares of Series B Preferred Stock shall be adjusted by dividing the
\nSeries B Conversion Price, the Series B Liquidation Price and the Series B
\nPreferred Dividend Rate, respectively, in effect immediately before the event by
\nthe Non-dilutive Share Amount determined pursuant to this paragraph 9(A)(1).<\/p>\n<\/p>\n<\/p>\n

(2) The Company and the Board of Directors shall each use its best efforts to
\ntake all necessary steps or to take all actions as are necessary or appropriate
\nfor implementation of the automatic adjustment provided in paragraph 9(A)(1). In
\nthe event for any reason the Company is precluded from giving full effect to the
\nautomatic adjustment provided in paragraph 9(A)(1), then no such automatic
\nadjustment shall occur, but instead the Series B Conversion Price shall
\nautomatically be adjusted by dividing the Series B Conversion Price in effect
\nimmediately before the event by the Non-dilutive Share Amount determined
\npursuant to paragraph 9(A)(1), and the Series B Liquidation Price and the Series
\nB Preferred Dividend Rate will not be adjusted. An adjustment to the Series B
\nConversion Price made pursuant to this paragraph 9(A)(2) shall be given effect,
\nupon payment of such a dividend or distribution, as of the record date for the
\ndetermination of shareholders entitled to receive such dividend or distribution
\n(on a retroactive basis) and in the case of a subdivision or combination shall
\nbecome effective immediately as of the effective date thereof. If subsequently
\nthe Company is able to give full effect to the automatic adjustment as provided
\nin paragraph 9(A)(1), then such automatic adjustment will proceed in accordance
\nwith the provisions of paragraph 9(A)(1) and the adjustment in the Series B
\nConversion Price as provided in this paragraph 9(A)(2) will automatically be
\nreversed and nullified prospectively.<\/p>\n<\/p>\n<\/p>\n

(B)(1) Subject to the provisions of paragraph 9(D), in the event the Company
\nshall, at any time or from time to time while any of the shares of Series B
\nPreferred Stock are outstanding, issue to holders of shares of Common Stock as a
\ndividend or distribution, including by way of a reclassification of shares or a
\nrecapitalization of the Company, any right or warrant to purchase shares of
\nCommon Stock (but not including as such a right or warrant any security
\nconvertible into or exchangeable for shares of Common Stock) at a purchase price
\nper share less than the Fair Market Value (as hereinafter defined) of a share of
\nCommon Stock on the date of issuance of such right or warrant, then, in such
\nevent, each share of Series B Preferred Stock will automatically, without any
\naction on the part of the holder thereof or the Company, become that number of
\nshares of Series B Preferred Stock (the “Non-dilutive Share Amount”) equal to an
\namount which is a fraction the numerator of which is the number of shares of
\nCommon Stock outstanding immediately before such issuance of rights or warrants
\nplus the maximum number of shares of Common Stock that could be acquired upon
\nexercise in full of all such rights and warrants and the denominator of which is
\nthe number of shares of Common Stock outstanding immediately before such
\nissuance of rights or warrants plus the number of shares of Common Stock which
\ncould be purchased at the Fair Market Value of a share of Common Stock at the
\ntime of such issuance for the maximum aggregate consideration payable upon
\nexercise in full of all such rights or warrants. Concurrently with the automatic
\nadjustment pursuant to this paragraph 9(B)(1), the Series B Conversion Price,
\nthe Series B Liquidation Price and the Series B Preferred Dividend Rate of all
\nshares of Series B Preferred Stock shall be adjusted by dividing the Series B
\nConversion Price, the Series B Liquidation Price and the Series B Preferred
\nDividend<\/p>\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n

Rate, respectively, in effect immediately before such issuance of rights or
\nwarrants by the Non-dilutive Share Amount determined pursuant to this paragraph
\n9(B)(1).<\/p>\n<\/p>\n<\/p>\n

(2) The Company and the Board of Directors shall each use its best efforts to
\ntake all necessary steps or to take all actions as are necessary or appropriate
\nfor implementation of the automatic adjustment provided in paragraph 9(B)(1). In
\nthe event for any reason the Company is precluded from giving full effect to the
\nautomatic adjustment provided in paragraph 9(B)(1), then no such automatic
\nadjustment shall occur, but instead the Series B Conversion Price shall
\nautomatically be adjusted by dividing the Series B Conversion Price in effect
\nimmediately before such issuance of rights or warrants by the Non-Dilutive Share
\nAmount determined pursuant to paragraph 9(B)(1), and the Series B Liquidation
\nPrice and Series B Preferred Dividend Rate will not be adjusted. If subsequently
\nthe Company is able to give full effect to the automatic adjustment as provided
\nin paragraph 9(B)(1), then such automatic adjustment will proceed in accordance
\nwith the provisions of paragraph 9(B)(1) and the adjustment in the Series B
\nConversion Price as provided in this paragraph 9(B)(2) will automatically be
\nreversed and nullified prospectively.<\/p>\n<\/p>\n<\/p>\n

(C)(1) Subject to the provisions of paragraph 9(D), in the event the Company
\nshall, at any time or from time to time while any of the shares of Series B
\nPreferred Stock are outstanding, make an Extraordinary Distribution (as
\nhereinafter defined) in respect of the Common Stock, whether by dividend,
\ndistribution, reclassification of shares or recapitalization of the Company
\n(including recapitalization or reclassification effected by a merger or
\nconsolidation to which Section 8 hereof does not apply) or effect a Pro Rata
\nRepurchase (as hereinafter defined) of Common Stock, then, in such event, each
\nshare of Series B Preferred Stock will automatically, without any action on the
\npart of the holder thereof or the Company, become that number of shares of
\nSeries B Preferred Stock (the “Non-dilutive Share Amount”) equal to an amount
\nwhich is a fraction the numerator of which is the product of (a) the number of
\nshares of Common Stock outstanding immediately before such Extraordinary
\nDistribution or Pro Rata Repurchase minus, in the case of a Pro Rata Repurchase,
\nthe number of shares of Common Stock repurchased by the Company multiplied by
\n(b) the Fair Market Value of a share of Common Stock on the record date with
\nrespect to an Extraordinary Distribution or on the applicable expiration date
\n(including all extensions thereof) of any tender offer which is a Pro Rata
\nRepurchase or on the date of purchase with respect to any Pro Rata Repurchase
\nwhich is not a tender offer, as the case may be, and the denominator of which is
\n(i) the product of (x) the number of shares of Common Stock outstanding
\nimmediately before such Extraordinary Distribution or Pro Rata Repurchase
\nmultiplied by (y) the Fair Market Value of a share of Common Stock on the record
\ndate with respect to an Extraordinary Distribution, or on the applicable
\nexpiration date (including all extensions thereof) of any tender offer which is
\na Pro Rata Repurchase, or on the date of purchase with respect to any Pro Rata
\nRepurchase which is not a tender offer, as the case may be, minus (ii) the Fair
\nMarket Value of the Extraordinary Distribution or the aggregate purchase price
\nof the Pro Rata Repurchase, as the case may be. The Company shall send each
\nholder of Series B Preferred Stock (i) notice of its intent to make any dividend
\nor distribution and (ii) notice of any offer by the Company to make a Pro Rata
\nRepurchase, in each case at the same time as, or as soon as practicable after,
\nsuch offer is first communicated (including by announcement of a record date in
\naccordance with the rules of any stock exchange on which the Common Stock is
\nlisted or admitted to trading) to holders of Common Stock. Such notice shall
\nindicate the intended record date and the amount and nature of such dividend or
\ndistribution, or the number of shares subject to such offer for a Pro Rata
\nRepurchase and the purchase price payable by the Company pursuant to such offer,
\nas well as the Series B Conversion Price and the number of shares of Common
\nStock into which a share of Series B Preferred Stock may be converted at such
\ntime. Concurrently with the automatic adjustment pursuant to this paragraph
\n9(C)(1), the Series B Conversion Price, the Series B Liquidation Price and the
\nSeries B Preferred Dividend Rate of all shares of Series B Preferred Stock shall
\nbe adjusted by dividing the Series B Conversion Price, the Series B Liquidation
\nPrice and the Series B Preferred Dividend Rate, respectively, in effect
\nimmediately before such Extraordinary Distribution or Pro Rata Repurchase by the
\nNon-dilutive Share Amount determined pursuant to this paragraph 9(C)(1).<\/p>\n<\/p>\n<\/p>\n

(2) The Company and the Board of Directors shall each use its best efforts to
\ntake all necessary steps or to take all actions as are necessary or appropriate
\nfor implementation of the automatic adjustment provided in paragraph 9(C)(1). In
\nthe event for any reason the Company is precluded from giving full effect to the
\nautomatic adjustment provided in paragraph 9(C)(1), then no such automatic
\nadjustment shall occur, but instead the Series B Conversion Price shall
\nautomatically be adjusted by dividing the Series B Conversion Price in effect
\nimmediately before such Extraordinary Distribution or Pro Rata Repurchase by the
\nNon-dilutive Share Amount, and the Series B Liquidation Price and the Series B
\nPreferred Dividend Rate will not be adjusted. If subsequently the Company is
\nable to give full<\/p>\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n

effect to the automatic adjustment as provided in paragraph 9(C)(1), then
\nsuch automatic adjustment will proceed in accordance with the provisions of
\nparagraph 9(C)(1) and the adjustment in the Series B Conversion Price as
\nprovided in this paragraph 9(C)(2) will automatically be reversed and nullified
\nprospectively.<\/p>\n<\/p>\n<\/p>\n

(D) Notwithstanding any other provisions of this Section 9, the Company shall
\nnot be required to make (i) any adjustment of the number of issued shares of
\nSeries B Preferred Stock, the Series B Conversion Price, the Series B
\nLiquidation Price or the Series B Preferred Dividend Rate unless such adjustment
\nwould require an increase or decrease of at least one percent (1%) in the number
\nof shares of Series B Preferred Stock outstanding, or, (ii) if no additional
\nshares of Series B Preferred Stock are issued, any adjustment of the Series B
\nConversion Price unless such adjustment would require an increase or decrease of
\nat least one percent (1%) in the Series B Conversion Price. Any lesser
\nadjustment shall be carried forward and shall be made no later than the time of,
\nand together with, the next subsequent adjustment which, together with any
\nadjustment or adjustments so carried forward, shall amount to an increase or
\ndecrease of at least one percent (1%) of the number of Series B Preferred Shares
\noutstanding or, if no additional shares of Series B Preferred Stock are being
\nissued, an increase or decrease of at least one percent (1%) of the Series B
\nConversion Price, whichever the case may be.<\/p>\n<\/p>\n<\/p>\n

(E) If the Company shall make any dividend or distribution on the Common
\nStock or issue any Common Stock, other capital stock or other security of the
\nCompany or any rights or warrants to purchase or acquire any such security,
\nwhich transaction does not result in an appropriate adjustment to the number of
\nshares of Series B Preferred Stock outstanding or the Series B Conversion Price
\npursuant to the foregoing provisions of this Section 9, the Board of Directors
\nof the Company may, in its sole discretion, consider whether such action is of
\nsuch a nature that some type of equitable adjustment should be made in respect
\nof such transaction. If in such case the Board of Directors of the Company
\ndetermines that some type of adjustment should be made, an equitable adjustment
\nnot repugnant to law and for the protection of the conversion rights of the
\nSeries B Preferred Stock shall be made effective as of such date, as determined
\nby the Board of Directors of the Company. The determination of the Board of
\nDirectors of the Company as to whether some type of adjustment should be made
\npursuant to the foregoing provisions of this paragraph 9(E), and, if so, as to
\nwhat adjustment should be made and when, shall be final and binding on the
\nCompany and all shareholders of the Company. The Company shall be entitled to
\nmake such additional adjustments, in addition to those required by the foregoing
\nprovisions of this Section 9, as shall be necessary in order that any dividend
\nor distribution in shares of capital stock of the Company, subdivision,
\nreclassification or combination of shares of the Company or any recapitalization
\nof the Company shall not be taxable to holders of the Common Stock.<\/p>\n<\/p>\n<\/p>\n

(F) For purposes of this Appendix B, the following definitions shall apply:\n<\/p>\n<\/p>\n<\/p>\n

(1) “Extraordinary Distribution” shall mean any dividend or other
\ndistribution (effected while any of the shares of Series B Preferred Stock are
\noutstanding) of (i) cash, where the aggregate amount of such cash dividend or
\ndistribution together with the amount of all cash dividends and distributions
\nmade during the preceding period of twelve (12) months, when combined with the
\naggregate amount of all Pro Rata Repurchases [for this purpose, including only
\nthat portion of the aggregate purchase price of such Pro Rata Repurchase which
\nis in excess of the Fair Market Value of the Common Stock repurchased as
\ndetermined on the applicable expiration date (including all extensions thereof)
\nof any tender offer or exchange offer which is a Pro Rata Repurchase, or the
\ndate of purchase with respect to any other Pro Rata Repurchase which is not a
\ntender offer or exchange offer] made during such period, exceeds twelve and
\none-half percent (12 1\/2%) of the aggregate Fair Market Value of all shares of
\nCommon Stock outstanding on the record date for determining the shareholders
\nentitled to receive such Extraordinary Distribution and (ii) any shares of
\ncapital stock of the Company (other than shares of Common Stock), other
\nsecurities of the Company (other than securities of the type referred to in
\nparagraph (B) of this Section 9), evidences of indebtedness of the Company or
\nany other person or any other property (including shares of any subsidiary of
\nthe Company), or any combination thereof. The Fair Market Value of an
\nExtraordinary Distribution for purposes of paragraph (C) of this Section 9 shall
\nbe the sum of the Fair Market Value of such Extraordinary Distribution plus the
\naggregate amount of any cash dividends or distributions which are not
\nExtraordinary Distributions made during such twelve month period and not
\nincluded in the calculation of any previous adjustment pursuant to paragraph (C)
\nof this Section 9.<\/p>\n<\/p>\n<\/p>\n

(2) “Fair Market Value” shall mean, as to shares of Common Stock or any other
\nclass of capital stock or securities of the Company or any other issuer which
\nare publicly traded, the average of the Current Market Prices (as<\/p>\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n

hereinafter defined) of such shares or securities for each day of the
\nAdjustment Period (as hereinafter defined). “Current Market Price” of publicly
\ntraded shares of Common Stock or any other class of capital stock or other
\nsecurity of the Company or any other issuer for a day shall mean the last
\nreported sales price, regular way, or, in case no sale takes place on such day,
\nthe average reported closing bid and asked prices, regular way, in either case
\nas reported on the New York Stock Exchange Composite Tape or, if such security
\nis not listed or admitted to trading on the New York Stock Exchange, on the
\nprincipal national securities exchange on which such security is listed or
\nadmitted to trading or, if not listed or admitted to trading on any national
\nsecurities exchange, on the NASDAQ National Market System or, if such security
\nis not quoted on such National Market System, the average of the closing bid and
\nasked prices on each such day in the over-the-counter market as reported by
\nNASDAQ or, if bid and asked prices for such security on each such day shall not
\nhave been reported through NASDAQ, the average of the bid and asked prices for
\nsuch day as furnished by any New York Stock Exchange member firm regularly
\nmaking a market in such security selected for such purpose by the Board of
\nDirectors of the Company on each trading day during the Adjustment Period.
\n“Adjustment Period” shall mean the period of five (5) consecutive trading days,
\nselected by the Board of Directors of the Company, during the twenty (20)
\ntrading days preceding, and including, the date as of which the Fair Market
\nValue of a security is to be determined. The “Fair Market Value” of any security
\nwhich is not publicly traded or of any other property shall mean the fair value
\nthereof as determined by an independent investment banking or appraisal firm
\nexperienced in the valuation of such securities or property selected in good
\nfaith by the Board of Directors of the Company, or, if no such investment
\nbanking or appraisal firm is in the good faith judgment of the Board of
\nDirectors of the Company available to make such determination, as determined in
\ngood faith by the Board of Directors of the Company.<\/p>\n<\/p>\n<\/p>\n

(3) “Pro Rata Repurchase” shall mean any purchase of shares of Common Stock
\nby the Company or any subsidiary thereof, whether for cash, shares of capital
\nstock of the Company, other securities of the Company, evidences of indebtedness
\nof the Company or any other person or any other property (including shares of a
\nsubsidiary of the Company), or any combination thereof, effected while any of
\nthe shares of Series B Preferred Stock are outstanding, pursuant to any tender
\noffer or exchange offer subject to Section 13(e) of the Securities Exchange Act
\nof 1934, as amended (the “Exchange Act”), or any successor provision of law, or
\npursuant to any other offer available to substantially all holders of Common
\nStock; provided, however, that no purchase of shares by the Company or any
\nsubsidiary thereof made in open market transactions shall be deemed a Pro Rata
\nRepurchase. For purposes of this paragraph 9(F), shares shall be deemed to have
\nbeen purchased by the Company or any subsidiary thereof “in open market
\ntransactions” if they have been purchased substantially in accordance with the
\nrequirements of Rule 10b-18 as in effect under the Exchange Act on the date
\nshares of Series B Preferred Stock are initially issued by the Company or on
\nsuch other terms and conditions as the Board of Directors of the Company shall
\nhave determined are reasonably designed to prevent such purchases from having a
\nmaterial effect on the trading market for the Common Stock.<\/p>\n<\/p>\n<\/p>\n

(G) Whenever an adjustment increasing the number of shares of Series B
\nPreferred Stock outstanding is required pursuant to this Appendix B, the Board
\nof Directors shall take such action as is necessary so that a sufficient number
\nof shares of Series B Preferred Stock are designated with respect to such
\nincrease resulting from such adjustment. Whenever an adjustment to the Series B
\nConversion Price, the Series B Liquidation Price or the Series B Preferred
\nDividend Rate of the Series B Preferred Stock is required pursuant to this
\nAppendix B, the Company shall forthwith place on file with the transfer agent
\nfor the Common Stock and the Series B Preferred Stock if there be one, and with
\nthe Treasurer of the Company, a statement signed by the Treasurer or Assistant
\nTreasurer of the Company stating the adjusted Series B Conversion Price, Series
\nB Liquidation Price and Series B Preferred Dividend Rate determined as provided
\nherein. Such statement shall set forth in reasonable detail such facts as shall
\nbe necessary to show the reason and the manner of computing such adjustment,
\nincluding any determination of Fair Market Value involved in such computation.
\nPromptly after each adjustment to the number of shares of Series B Preferred
\nStock outstanding, the Series B Conversion Price, the Series B Liquidation Price
\nor the Series B Preferred Dividend Rate, the Company shall mail a notice thereof
\nand of the then prevailing number of shares of Series B Preferred Stock
\noutstanding, the Series B Conversion Price, the Series B Liquidation Price and
\nthe Series B Preferred Dividend Rate to each holder of shares of Series B
\nPreferred Stock.<\/p>\n<\/p>\n<\/p>\n

10.<\/strong> Miscellaneous.<\/strong><\/p>\n<\/p>\n<\/p>\n

(A) All notices referred to herein shall be in writing, and all notices
\nhereunder shall be deemed to have been given upon the earlier of receipt thereof
\nor three (3) business days after the mailing thereof if sent by registered<\/p>\n<\/p>\n<\/p>\n

\n

\n<\/p>\n<\/p>\n

mail (unless first-class mail shall be specifically permitted for such notice
\nunder the terms of this Appendix B) with postage prepaid, addressed: (i) if to
\nthe Company, to its office at One Procter & Gamble Plaza, Cincinnati, Ohio
\n45202 (Attention: Treasurer) or to the transfer agent for the Series B Preferred
\nStock, or other agent of the Company designated as permitted by this Appendix B
\nor (ii) if to any holder of the Series B Preferred Stock or Common Stock, as the
\ncase may be, to such holder at the address of such holder as listed in the stock
\nrecord books of the Company (which may include the records of any transfer agent
\nfor the Series B Preferred Stock or Common Stock, as the case may be) or (iii)
\nto such other address as the Company or any such holder, as the case may be,
\nshall have designated by notice similarly given.<\/p>\n<\/p>\n<\/p>\n

(B) The term “Common Stock” as used in this Appendix B means the Company’s
\nCommon Stock without par value, as the same exists at the date of filing of the
\nAmendment to the Company’s Amended Articles of Incorporation first designating
\nSeries B Preferred Stock, or any other class of stock resulting from successive
\nchanges or reclassifications of such Common Stock consisting solely of changes
\nin par value, or from par value to without par value, or from without par value
\nto par value. In the event that, at any time as a result of an adjustment made
\npursuant to Section 9 of this Appendix B, the holder of any share of the Series
\nB Preferred Stock upon thereafter surrendering such shares for conversion shall
\nbecome entitled to receive any shares or other securities of the Company other
\nthan shares of Common Stock, the anti-dilution provisions contained in Section 9
\nhereof shall apply in a manner and on terms as nearly equivalent as practicable
\nto the provisions with respect to Common Stock, and the provisions of Sections 1
\nthrough 8 and 10 of this Appendix B with respect to the Common Stock shall apply
\non like or similar terms to any such other shares or securities.<\/p>\n<\/p>\n<\/p>\n

(C) The Company shall pay any and all stock transfer and documentary stamp
\ntaxes that may be payable in respect of any issuance or delivery of shares of
\nSeries B Preferred Stock or shares of Common Stock or other securities issued on
\naccount of Series B Preferred Stock pursuant hereto or certificates representing
\nsuch shares or securities. The Company shall not, however, be required to pay
\nany such tax which may be payable in respect of any transfer of the Series B
\nPreferred or Common Stock or other Securities by the holder thereof to a
\nsubsequent holder resulting in the issuance or delivery of shares of Series B
\nPreferred Stock or Common Stock or other securities in a name other than that in
\nwhich the shares of Series B Preferred Stock with respect to which such shares
\nor other securities are issued or delivered were registered, or in respect of
\nany payment to any person with respect to any such shares or securities other
\nthan a payment to the registered holder thereof, and shall not be required to
\nmake any such issuance, delivery or payment unless and until the person
\notherwise entitled to such issuance, delivery or payment has paid to the Company
\nthe amount of any such tax or has established, to the satisfaction of the
\nCompany, that such tax has been paid or is not payable.<\/p>\n<\/p>\n<\/p>\n

(D) In the event that a holder of shares of Series B Preferred Stock shall
\nnot by written notice designate the name in which shares of Common Stock to be
\nissued upon conversion of such shares should be registered or to whom payment
\nupon redemption of shares of Series B Preferred Stock should be made or the
\naddress to which the certificate or certificates representing such shares, or
\nsuch payment, should be sent, the Company shall be entitled to register such
\nshares, and make such payment, in the name of the holder of such Series B
\nPreferred Stock as shown on the records of the Company and to send the
\ncertificate or certificates or other documentation representing such shares, or
\nsuch payment, to the address of such holder shown on the records of the Company.\n<\/p>\n<\/p>\n<\/p>\n

(E) The Company may appoint, and from time to time discharge and change, a
\ntransfer agent for the Series B Preferred Stock. Upon any such appointment or
\ndischarge of a transfer agent, the Company shall send notice thereof by
\nfirst-class mail, postage prepaid, to each holder of record of Series B
\nPreferred Stock.<\/p>\n<\/p>\n<\/p>\n<\/p>\n<\/p>\n

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