North American Transition Communication Update for Associates
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M-AK3R(SQ[?IBA_
      

Discussion Agenda
Successful Acquisition Planning and Implementation
Transition Objectives
Merger Timeline
The Transition Teams
Corporate
North American
Communication
Transition Programs and Associate Support

2

      

Managing a Successful Acquisition
Successful acquisitions depend on;*
A clear strategic vision that articulates the acquisition goals and an operating
strategy that translates the vision into reality A disciplined integration
process that implements the operating strategy in a focused, resource -efficient
manner.
A change management process that leaders use to win the hearts and minds of the
employees and shape new behaviors that lead to success.

* Comments provided by RHR, "Managing Being Acquired: The Human Side of the Integration Process
"

3

      

Gillette and P&G
Strength + Strength =
Success!!

4

      

21 "Billion Dollar Brands"
Baby and Family Care Beauty Care Fabric and Home Care Oral Care Snacks and Beverages Blades and
Razors Batteries Small Appliances Pet Food Health Care
1 Umbrella Brand; excludes Mach3 sales

5

      

An Unparalleled Portfolio and Consumer Proposition
# of $1+ Billion Brands
Source: Company filings and UBS estimates

6

      

Despite Our Accomplishments and Record Performance ... Very heavy reliance on
single category -Blades & Razors ... Representing nearly two-thirds earnings
Limited scale ... Compared with customers and other competitors Environment of
rapid consolidation in all segments of consumer products -big customers are
getting bigger

7

      

Our Best Course
Join with powerful global company that has shared values Accelerate the growth
of our brands Realize significant added-value for our key constituents our
shareholders our employees our customers

8

      

Why Will It Be The Best Consumer Products Company in the World?
Two great organizations:
complementary strengths similar in cultures shared vision great potential for
superior sustainable growth H:IV\@6GD1_I_2IV\K%C3Q
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M@*'?VY^Q>/\`F._%KC_J(ZH.O_`Z?+FW3V'W0_R#V7$*_P"7.&5O[J%_MS]C
M#MKOQ9_\&&J#_P!GH4,V6WL%\H?Y"]EQ`O\`ESAE_P!NH7^V_P!C'_H._%G_
M`,&&J#_V>FH9NO\`GPOE!?H'LN(/^?.&_P#`4*-;_8Q[:Y\6/_!AJ@_]GI\N
M(/^?.&_\``4*-;_8S
M[:W\6!_W$-4&/_'Z.3.5LL.OE#_(/9<0+_ESAE_VZD+_`&U^QJ/^8W\6./\`
MI_U3O_P.CDSGMA_NA_D'LN(/^?&&_P#`4+_;7[&O_0;^+'_@?JO_`,75V'SCW%*VZL/I_RTI*&'^Z(?VQ^R%_P!!7XI?^!VK?_'*.3.N
MV'^Z'^0>SSO_`)]X?[HA_;'[(7_05^*?_@=JW_QRCigh performance operations High growth potential
for our brands and our people Real value creation

9

      

Shared Values and Culture
Driven by Excellence of Execution
Focused on Innovation, Quality and Cost Reduction
Committed to Developing People and Upgrading Capabilities
Adheres to Highest Ethical Standards

10

      

Benefits of a Union with P&G
Assures ample resources and highly-developed infrastructure to accelerate brand
growth Strengthens our excellent R&D capability Delivers great shareholder value
Enhances the growth and development prospects for Gillette Associates
Perpetuates our Core Values and Culture

11

      

Managing a Successful Acquisition
Successful acquisitions depend on;*
A clear strategic vision that articulates the acquisition goals and an operating
strategy that translates the vision into reality A disciplined integration
process that implements the operating strategy in a focused, resource -efficient
manner.
A change management process that leaders use to win the hearts and minds of the
employees and shape new behaviors that lead to success.

* Comments provided by RHR, "Managing Being Acquired: The Human Side of the Integration Process
"

12

      

Managing a Successful Acquisition
The North America Commercial Ops Organization will lead from an Integrated
Change Plan Plans to be linked with the Corporate Transition Team and plans.
Transition team and plans complement current organization structure - not a
replacement for or a new organization structure.
Transition teams and processes will utilize existing meeting and planning
processes.

13

      

Transition Objectives
Establish management as a source of accurate, timely information. Educate people
about the acquisition process and transition timeframes. Keep people informed;
share what we know when we can. Deliver the '05 business objectives.
Engage people in the planning and transition process.
Honor the Gillette heritage; and respectfully transition to the new culture.
Continue to invest in individual and organization capability.

14

      

The Merger Timeline
Announcement of merger
Filed joint proxy statement with the SEC Hold Gillette & P&G Shareholder
meetings Obtain Gillette & P&G Shareholder approvals Obtain antitrust and
regulatory agency clearance Close the transaction

15

      

Transition Planning Timeline
Pre-Acquisition Planning
Transition Planning
Post Acquisition Implementation
-Establish transition goals
-Confirm/modify business objectives
-Create transition teams and roles
-Customer
-Business Performance -People/Organization -Communications -Legal
-Systems/Processes -Begin to develop integrated transition plan -Cooperate with
external review -Establish Joint Planning Teams -Create joint transition goals
-Create integrated transition plans -Cooperate with external review -Develop
organizational structure -Implement transition plans -Customer -Business
Performance -People/Organization -Communications -Systems/Processes -Measure and
provide updates
                                          Each stage has unique work
requirements and conditions.

16

      

Establishing The Transition Team
                          Transition Steering Committee
                          Co-Chair: Jim Kilts Members:
Human Resources: Commercial Operations: GTM:
IT@G: Finance: Legal:
Strategy & Planning:
Ned Guillet
Joe Dooley, Ed Shirley
Ed DeGraan, Mike Cowhig, Joe Scalzo Kathy Lane Chuck Cramb Richard Willard Peter Klein

17

      

Establishing The Transition Team
                     Gillette Transition Steering Committee
                        Jim Kilts Gillette OpCom Members
Set overall integration and transition direction Determine the combined
organization structure Field the best team Ensure alignment and focus with P&G
on what must get done Review and approve implementation plans Monitor progress

18

      

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P&G /Gillette Transition
5 Guiding Principles to the Integration Process Maintain P&G and Gillette
business momentum Field the best team Treat people with dignity/respect
Move quickly, making decisions promptly, objectively and fairly Communicate
openly and proactively

19

      

Fielding The Best Team
We Are Developing A Process With P&G to ...
Staff the organization with the best leaders from each company whenever possible
... starting at the top levels of the organization Involve senior management
from both companies in top-to-top discussions/plans Ensure oversight of the
process by senior HR leaders ... Dick Antoine and Ned Guillet 
      

Fielding The Best Team We Are Developing A Process With P&G to ... Ensure
discussions are fact-based and driven by:
Vision for future organizational structure and product lines Need for strong
talent across the organization Strong succession plan Existing vacancies
Anticipated vacancies

21

      

Fielding The Best Team
We Are Developing A Process With P&G to ...
Maintain a focus on diversity ... gender, race, cultural, geographic, business
acumen and experience, etc. Move as quickly as possible after the merger is
approved

22

      

North American Transition Team
                       Joseph F. Dooley Transition Sponsor
Linkage to Corporate Transition Planning Team
(Monthly Review)
Integration Plan Steering Committee
   Rob DeMartini, Gary Raymond, Fred Howard, James White, Rick Lees (Brad Patrick, Transition
                  Process Facilitator) Mike Duffy, Mark Dawson, Manish Shanbhag
(Bi-Weekly Planning)
Transition Plan Solution Groups
Customer

James White
Business Performance

Rick Lees
People/ Organization

Nancy Vitale
                                 Communications

                                 Trish Moriarty
                                      Legal

                                 Manish Shanbhag
                                                                                          Systems

                                                                                      Mark Dawson

23

      

Customer
Pre-Acquisition Planning Phase:
Support Gillette Customer Development Teams with effective, coordinated
communication Reinforce that until the deal closes P&G must be treated as a
competitor No communication must occur with P&G without OpComm approval Assist
in regulatory/ FTC documentation requests Transition Planning & Post Acquisition
Phase:
Customer needs such as systems integration and customer agreements will be assessed

24

      

Business Performance
Evaluate Objectives to ensure alignment and focus Confirm, Modify, and Reconfirm
as necessary Reconfirm 2005 Objectives and ensure successful execution Publish
frequent Scorecard updates on business results

25

      

People / Organization
Communications
Staffing/Headcount Planning
Talent Assessment
Workplace Environment/Policy
Q&A/Administration
Recognition
Training/Organization Support
Transition Support

26

      

People / Organization - Role of Diversity
Gillette is committed to driving performance by building an inclusive and
diverse work environment A diverse and inclusive work environment increases
innovation, creativity and productivity - providing a real competitive advantage
We have some through the work of the Corporate and CONA Diversity councils but
much more can and will be done:
Multi-cultural marketing programs Increase use of minority vendors Promote more
diverse, inclusive work environment It is a critical business imperative for
both Gillette and Procter & Gamble

27

      

Legal
Lead the regulatory process and compliance Offer support to organization on
process & guidelines Systems Transition / Post Acquisition Phase:
Lead the integration of systems across the organization

28

      

W`_\`4FB8U_X4OE^:
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P&G / Gillette Transition Announcement
Organization Structure
Operate within the P&G Global Business Unit (GBU)/Market Development
Organization (MDO)/Global Business Services (GBS) structure. GBU's A new GBU
will be created, The Global Gillette Business Unit, consisting of the
Blades/Razors, Braun, and Duracell businesses.
Reports into Jim Kilts
Includes manufacturing, R&D, and engineering functions supporting these
operations Blades/Razors will continue to be based in Boston, Braun in Kronberg
Germany and Duracell in Bethel, Connecticut

29

      

Discussion Agenda
Successful Acquisition Planning and Implementation
Transition Objectives Merger Timeline
The Transition Teams
Corporate North American
Communication
Transition Programs and Associate Support

30

      

Communication Will Be Key During This Transition Period
Committed to direct, open and responsible communication
Information will be provided as soon as it becomes available & we will address
questions as we are able Ensure consistency in messages and frequency across all
BU's in CONA Refer to the combined Gillette/P&G site accessible from both
INSIGHT and the SOURCE for the latest updates and factual information Do not
speculate or allow rumors to distract

31

      

Gillette -P&G Combined Site - Accessible from INSIGHT
                     Merger information can be found in two ways on Insight

32

      

Communication Will Be Key During This Transition Period We Will Give You The
Facts ... There will be job losses ... about 4 percent of the joint workforce We
have created the transition steering team We expect the deal to close this
summer or fall
Gillette shareholders will vote on the merger at a special meeting which is
tentatively scheduled for June 14 Regulatory approval will be the final step in
the transaction

33

      

Trade Communication
Until final regulatory approval, Gillette and P&G remain competitors Trade
Letter was sent from Joe Dooley to customers on 1/31/05 Do not discuss or
speculate what transition or future structure may look like You may discuss any
information which is made public by Gillette (general information about timing,
fact that deal is being reviewed by the FTC, etc.) It is a normal part of the
FTC regulatory review process for the FTC to talk with some retailers directly
Conduct all business and account planning activities as you normally would - do
not let the pending transaction affect your negotiating strategy or approach
Gillette is committed to our business goals and objectives and are committed to
helping our customers to meet their business goals

34

      

Discussion Agenda
Update on Q1 Results
Successful Acquisition Planning and Implementation
Transition Objectives Merger Timeline
The Transition Teams
Corporate North American
Communication
Transition Programs and Associate Support 2005 NA Objectives

35

      

Transition Programs and Associate Support Guidance has been provided to
associates and retirees on: Severance Compensation Benefits We will have benefit
meetings/resources available for consultation:
National Sales Meetings SAMETIME
Contact Gillette HR Service Center 1-888-593-9278

36

      

What to Focus on During the Transition :
Empower (take care of self)
Address controllable aspect of personal transition; self-assessment and
awareness Focus on clarifying personal roles and accountability Utilize IDPs and
personal development reviews Engage (take care of the business) Increase focus
on goals; "Raise the Bar" on performance Emphasize business reviews and use of
scorecards/flash summaries on the state of the business Enhance access to
leaders and business performance information Collaborate (take care of one
another) Take advantage of the integrated planning requirements to encourage
collaboration Increase small group problem solving Launch cross-functional
project teams to improve business results.

37

      

The Stages of Change
There are 3 main stages we all go through:
1. Coming to grips with the change
2. Working it through
3. Maintaining momentum
At each stage people think, feel and act differently
The key is to understand we all move through these changes at a different pace
The goal is direct our mindset to the future, feel like we will succeed and
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M([/0]>^*GCLP7:Y':: behavior to build capabilities

38

      

Where are you in the stages of change ...
Arenas
Stages
Mindset/ Thinking
Emotional
Behavioral
                                                               1) Coming to
grips with the change
Assess your own understanding and knowledge about the change. Determine
readiness for change.
Find out what are the new behaviors and how well people are using them to
maintain effectiveness.
                              2) Working it through
Find out if you understand the change well enough to problem solve with it and
help others deal with it. Assess how you feel about the change.
Determine what people's notion of "good" is and if they are behaving in ways
that will support "good" performance. 3) Maintaining momentum Determine if you
are learning "new" mindset.
Determine your level of acceptance of the change.
Assess how you are doing exhibiting new behaviors, how frequently & how well. =
Indicates optimal distribution of focus & attention

39

      

What's in Our Control
Driving our business to achieve a 3rd year of consecutive record results Our own
personal view and attitude Our personal and professional development and
commitment

40

      

Critical Period Lies Ahead
Gillette has continued responsibility to deliver our business plan...and results
We must continue with the same degree of focus, determination and
professionalism as you have shown in the past Be proud of your past performance
Be open to the potential of the future Rumors will be operating at full force Do
not believe all you hear, see or read...some are accurate, most are not North
American leadership team is committed to an open, direct , timely communications
process

41

      

Successful Integration Depends Upon
Making our Business as Strong as Possible To be empowered drive our business A
well defined plan Consistent, Frequent, 2 Way Communication

42

      

Summary & Next Steps
There are many questions to which we do not have answers ... yet When we have
the answers ... we will give them to you In the meantime our best course of
action is to remain focused on achieving business results and other key
objectives

43

      

Appendix

      

On January 28, 2005, Procter & Gamble signed an agreement to acquire Gillette
Every Gillette share will be converted into .975 of a P&G share Transaction
expected to close in 4 to 9 months Needs Shareholder and Regulatory approval The
organizational structure that emerges will be announced at or after Change
-in-Control ... ...not sooner

45