SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 11-K
\X\ ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 FOR THE FISCAL YEAR ENDED JUNE 30, 2002, OR
\ \ FOR TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM ____________ TO
_______________
Commission file number 001-00434
A. Full title of the plan and the address of the plan, if different from that
of the issuer named below: Employee Stock Purchase Plan (Japan),
17, Koyo-cho Naka 1-chome, Higashinada-ku, Kobe, Hyogo 658-0032, Japan
B. Name of issuer of the securities held pursuant to the plan and the address
of its principal executive office: The Procter & Gamble Company, One
Procter & Gamble Plaza, Cincinnati, Ohio 45202.
REQUIRED INFORMATION
Item 1. Audited statements of financial condition as of the end of the latest
two fiscal years of the plan (or such lesser period as the plan has
been in existence).
Item 2. Audited statements of income and changes in plan equity for each of the
latest three fiscal years of the plan (or such lesser period as the plan
has been in existence).
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EMPLOYEE STOCK PURCHASE PLAN (JAPAN)
FINANCIAL STATEMENTS FOR THE YEARS ENDED
JUNE 30, 2002, 2001, AND 2000 AND
INDEPENDENT AUDITORS' REPORT
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EMPLOYEE STOCK PURCHASE PLAN (JAPAN)
TABLE OF CONTENTS
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INDEPENDENT AUDITORS' REPORT 1
FINANCIAL STATEMENTS:
Statements of Net Assets Available for Benefits as of
June 30, 2002 and 2001 2
Statements of Changes in Net Assets Available for Benefits
for the Years Ended June 30, 2002, 2001, and 2000 3
Notes to Financial Statements for the Years Ended
June 30, 2002, 2001, and 2000 4
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of
the Employee Stock Purchase Plan (Japan):
We have audited the accompanying statements of net assets available for
benefits of the Employee Stock Purchase Plan (Japan) (the "Plan") as of June 30,
2002 and 2001, and the related statements of changes in net assets available for
benefits for the years ended June 30, 2002, 2001, and 2000. These financial
statements are the responsibility of the Plan's management. Our responsibility
is to express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, such financial statements present fairly, in all material
respects, the net assets available for benefits of the Plan as of June 30, 2002
and 2001 and the changes in net assets available for benefits for the years
ended June 30, 2002, 2001, and 2000 in conformity with accounting principles
generally accepted in the United States of America.
Our audits also comprehended the translation of Japanese yen amounts into U.S.
dollar amounts and, in our opinion, such translation has been made in conformity
with the basis stated in Note 6. The translation of the financial statement
amounts into U.S. dollars has been made solely for convenience.
/S/ DELOITTE TOUCHE TOHMATSU
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DELOITTE TOUCHE TOHMATSU
September 13, 2002
EMPLOYEE STOCK PURCHASE PLAN (JAPAN)
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
JUNE 30, 2002 AND 2001
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Japanese Yen (Y) U.S. Dollars (Y)
------------------------------------------- -----------------
2002 2001 2002
---- ---- ----
ASSETS, At fair value:
Cash (Y) 580,706 (Y) 15,923 $ 4,900
The Procter & Gamble Company common stock
(2002: 811,749 shares, cost(Y)5.9
billion ($50 million); 2001: 911,689
shares, cost(Y)6.2 billion) 8,929,239,000 7,202,343,100 75,352,228
The J.M. Smucker Company
common stock (2002: 15,979 shares,
cost(Y)68 million ($551 thousand)) 64,627,812 545,382
------------------- ------------------- ---------------
Total assets 8,994,447,518 7,202,359,023 75,902,510
------------------- ------------------- ---------------
NET ASSETS AVAILABLE FOR BENEFITS (Y) 8,994,447,518 (Y) 7,202,359,023 $ 75,902,510
=================== =================== ===============
See notes to financial statements.
EMPLOYEE STOCK PURCHASE PLAN (JAPAN)
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEARS ENDED JUNE 30, 2002, 2001, AND 2000
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Japanese Yen (Y) U.S. Dollars
-------------------------------------------------------- -------------
2002 2001 2000 2002
---- ---- ---- ----
Additions:
Investment income:
Net appreciation (depreciation) in fair value
of investments (Y) 2,701,500,540 (Y) 1,635,182,025 (Y) (3,967,866,298) $ 22,797,473
Dividend income 110,892,117 93,303,871 71,167,814 935,798
Interest income 1,743 5,229 2,006 15
Other 490,983
----------------- ----------------- ----------------- ------------
Total investment income 2,812,394,400 1,728,491,125 (3,896,205,495) 23,733,286
Contributions by Procter & Gamble Far East, Inc.
and Max Factor K.K. 215,777,142 224,782,400 221,599,300 1,820,904
Distributions of the J.M. Smucker
Company common stock 67,860,461 572,662
Participant contributions 1,090,969,000 1,307,728,658 1,372,202,572 9,206,489
----------------- ----------------- ----------------- -----------
Total additions 4,187,001,003 3,261,002,183 (2,302,403,623) 35,333,341
----------------- ----------------- ----------------- ------------
Deductions:
Distributions and withdrawals to participants (2,394,912,508) (1,048,475,216) (729,401,640) (20,210,232)
Bank charges (2,940) (8,330)
Other (1,792,776)
----------------- ----------------- ----------------- ------------
Total deductions (2,394,912,508) (1,050,270,932) (729,409,970) (20,210,232)
----------------- ----------------- ----------------- ------------
NET INCREASE (DECREASE) IN NET ASSETS
AVAILABLE FOR BENEFITS 1,792,088,495 2,210,731,251 (3,031,813,593) 15,123,109
NET ASSETS AVAILABLE FOR BENEFITS:
Beginning of year 7,202,359,023 4,991,627,772 8,023,441,365 60,779,401
----------------- ----------------- ---------------- ------------
End of year (Y) 8,994,447,518 (Y) 7,202,359,023 (Y) 4,991,627,772 $ 75,902,510
================= ================= ================= ============
See notes to financial statements.
EMPLOYEE STOCK PURCHASE PLAN (JAPAN)
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2002, 2001, AND 2000
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1. PLAN DESCRIPTION
The following brief description of the Employee Stock Purchase Plan (Japan)
(the "Plan") is provided for general information purposes only.
Participants should refer to the Plan agreement for more complete
information.
GENERAL - Prior to April 1, 2001, the Plan includes the Employee's
Shareholding Association of Procter & Gamble Far East, Inc., Japan Branch,
established May 1986, and the Employee's Shareholding Association of Max
Factor K.K., established January 1994, for employees and executives of
Procter & Gamble Far East, Inc., Japan Branch and Max Factor K.K.
(collectively the "Companies") as a union under the provisions of Article
667 paragraph 1 of the Japanese Civil Law. Effective April 1, 2001, the
Employee's Shareholding Association of Max Factor K.K. was merged with the
Employee's Shareholding Association of Procter & Gamble Far East, Inc.,
Japan Branch, to create the Employees' Shareholding Association of P&G
Group. The purpose of the Plan is to contribute to the formation of assets
by its participants by facilitating their acquisition of the common stock
of The Procter & Gamble Company (the "Stock"), the Companies' parent
company. Although the Companies have not indicated any intent to do so, the
Companies have the right under the Plan to terminate the Plan.
CONTRIBUTIONS - Participants may contribute a portion of their base pay in
units of 1,000 yen, up to 100 units monthly, and three times the monthly
base pay contributions limit from bonus pay. The Companies matched 10% of
participants' contributions up to 30 units monthly (90 units of bonus pay
contributions) until August 31, 1999. Effective September 1, 1999, the
Companies' contribution was increased from 10% of participants'
contributions to 20%. All contributions are invested in the Stock.
U.S. TAXATION AND ERISA - The Plan is not subject to taxation in the United
States, nor the provisions of the Employee Retirement Income Security Act
of 1974 ("ERISA").
PARTICIPANT ACCOUNTS - Each participant's account is credited with the
participant's contribution and allocations of (a) the Companies'
contributions and (b) earnings of the Plan. The benefit to which a
participant is entitled is the benefit that can be provided from the
participant's vested account.
VESTING - Participants are immediately vested in their contributions, the
Companies' matching contributions and actual earnings.
WITHDRAWAL - Participants may withdraw the allotted shares of the Stock in
multiples of 100 shares at any time. In the event that participants
withdraw from the Plan on termination of service or by their request, the
allotted shares of the Stock in multiples of one share plus cash at the
amount of the residual share at fair value shall be returned to them.
ADMINISTRATION - The Plan is administered by the Human Resources Department
of Procter & Gamble Far East, Inc., Japan Branch. A portion of the
administrative work of the Plan is entrusted to Daiwa Securities SMBC
Co., Ltd.
2. SIGNIFICANT ACCOUNTING POLICIES
BASIS OF ACCOUNTING - The accompanying financial statements have been
prepared on the accrual basis of accounting and the Plan's net assets and
transactions are recorded at fair value. The Plan's investment in the Stock
is valued at the closing price on an established security exchange. Income
from investments is recognized when earned and is allocated to each
participant's account by the Plan's recordkeeper.
EXPENSES OF THE PLAN - Investment management expenses are paid by the
Companies.
USE OF ESTIMATES - The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of
America requires management to make estimates and assumptions that affect
the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.
RISKS AND UNCERTAINTIES - The Plan invests in the Stock. Investment
securities, in general, are exposed to various risks, such as interest
rate, credit, and overall market volatility. Due to the level of risk
associated with the Stock, it is reasonably possible that changes in the
value of the Stock will occur in the near term and that such changes could
materially affect the amount reported in the statements of net assets
available for plan benefits.
3. THE J.M. SMUCKER COMPANY COMMON STOCK
In May of 2002, the Jif peanut butter and Crisco shortening brands were
spun-off to the Company's shareholders and subsequently merged into The
J.M. Smucker Company ("Smuckers"). As a result of the spin-off,
participants holding common stock received one share of Smuckers stock for
each fifty shares of Company common stock. The cost basis of the Company
common stock prior to the Smuckers spin-off was allocated between the
Company common stock held and the Smuckers common stock received. For
participant accounts with Company preferred stock, a preferred stock
dividend was awarded based on a predetermined calculation in sufficient
amounts to approximate the fifty-to-one common stock ratio. All grants
related to common stock were made in Smuckers common stock; however, vested
participants have the option of selling the Smuckers common stock and
reinvesting the funds into other investment options. Participants are not
permitted to purchase additional shares of Smuckers.
4. DISTRIBUTIONS PAYABLE
Distributions payable to participants who have elected to withdraw from the
Plan was (Y)3,768,430 ($31,801) at June 30, 2002. There were no
distributions payable at June 30, 2001.
5. CLASS ACTION LAWSUIT
During March of 2000, a class action lawsuit was filed against The Procter
& Gamble Company ("P&G"), the Companies' parent company, by shareholders of
the Stock. The class was certified on October 29, 2001 by the United States
District Court for the Southern District of Ohio, Western Division (the
"Court"), and a settlement of $49,000,000 has been approved. The Plan
joined the class of plaintiffs on March 29, 2002. Once the allocation of
the settlement is determined and approved by the Court, the Plan will
receive its portion of the settlement amount to allocate to participant
accounts.
6. U.S. DOLLAR AMOUNTS
U.S. dollar amounts presented in the financial statements are included
solely for the convenience of the reader. These translations should not be
construed as representations that the yen amounts have been, could have
been or could in the future be, converted into U.S. dollars. As the
amounts shown in U.S. dollars are for convenience only, the rate
of(Y)118.5 =U.S.$1, the approximate current rate at June 30, 2002, has
been used for the purpose of presentation of the U.S. dollar amounts in
the accompanying financial statements.
* * * * * *
THE PLAN. Pursuant to the requirements of the Securities Act of 1933, the
trustees (or other persons who administer the employee benefit plan) have duly
caused the Annual Report to be signed on its behalf by the undersigned,
thereunder duly authorized, on October 3, 2002.
EMPLOYEE STOCK PURCHASE PLAN (JAPAN)
By: EMPLOYEES' SHAREHOLDING ASSOCIATION OF P&G GROUP
By: /S/TAKANAO MASUTANI
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Takanao Masutani
Chairman
EXHIBIT INDEX
Exhibit No. Page No.
23 Consent of Deloitte & Touche Tohmatsu