Exhibit No. (10)i
SECOND SUPPLEMENTAL BENEFIT PLAN
TO THE
KIMBERLY-CLARK CORPORATION
PENSION PLAN
Amended and Restated Effective as of April 15, 2002
1. Use of Defined Terms. Capitalized terms used herein have the respective
meanings ascribed to such terms as set forth in Section 6 below.
2. Purpose. The Second Supplemental Benefit Plan is for the purpose of
providing Participants and their Beneficiaries with such benefits, in
addition to the Retirement Plan and the Supplemental Plan, as are
necessary to fulfill the intent of the Retirement Plan without regard
to Section 415 of the Code or any dollar limit imposed by the Code on
the amount of compensation considered under the Retirement Plan. It is
intended that the Second Supplemental Benefit Plan constitute an
unfunded plan of deferred compensation for a select group of management
or highly compensated employees, within the meaning of Title I of
ERISA.
3. Benefit. The Benefit of a Participant or a Survivor under the Second
Supplemental Benefit Plan shall be the difference between:
(a) the monthly amount payable under the Retirement Plan, which
monthly amount shall be calculated (i) without regard to
Article XI of the Retirement Plan and (ii) using the term
Earnings defined as set forth in Section 6(f) of the Second
Supplemental Benefit Plan below; less
(b) the sum of (i) the monthly amount payable under the Retirement
Plan and (ii) the monthly amount payable under the
Supplemental Plan.
4. Lump Sum Payments.
(a) Notwithstanding any other provision of the Retirement Plan, a
Participant (or surviving spouse or designated beneficiary, as
the case may be) shall be entitled to elect to receive his
Benefit payable under Section 3 as a Lump Sum Payment (subject
to any applicable payroll or other taxes required to be
withheld) under the following circumstances:
(i) The Participant (or surviving spouse or
designated beneficiary, as the case may be) has Timely Elected
to receive such Lump Sum Payment;
(ii) the Corporation experiences a Change of Control;
or
(iii) the Corporation's long-term credit rating falls
below Investment Grade.
(b) If a Participant (or surviving spouse or designated
beneficiary, as the case may be) elects a Lump Sum Payment
pursuant to subsection 4(a)(i) above, such election is subject
to approval by the Retirement Trust Committee in its sole
discretion. In addition, the Lump Sum Payment shall be payable
at the same time as the payments are eligible to commence
under the Retirement Plan.
(c) If a Participant (or surviving spouse or designated
beneficiary, as the case may be) elects a Lump Sum Payment
pursuant to subsections 4(a)(ii) or 4(a)(iii) above, the Lump
Sum Payment shall be reduced for active employee Participants
by a penalty equal to ten percent (10%) of the Benefit
otherwise payable and for a former employee, or a surviving
spouse or designated beneficiary, by a penalty equal to five
percent (5%) of the Benefit otherwise payable. Such penalty
shall be permanently forfeited and shall not be paid to or in
respect of, the Participant or surviving spouse or designated
beneficiary. In addition, such election must be made within
two years after a Change of Control or within 90 days after
the date the Corporation's long-term credit rating falls
below Investment Grade. Such Lump Sum Payment shall be made
within thirty days of the date of election.
(d) If a Participant has received a Lump Sum Payment pursuant to
this Section 4, such Participant may accrue an additional
Benefit under this Plan after the date of such Lump Sum
Payment, provided, however, that such future participation
shall not result in duplication of benefits. Accordingly, if
he has received a distribution of a Benefit under the Plan by
reason of prior participation, his Benefit shall be reduced by
the actuarial equivalent (at the date of the later
distribution) of the present value of the Benefit previously
paid hereunder.
(e) Notwithstanding any other provisions of this Second
Supplemental Benefit Plan to the contrary, in the event that
a portion of the Lump Sum Payment due a Participant pursuant
to this Section 4 would not be deductible by the Company
pursuant to Section 162(m) of the Code, the Company, at its
discretion, may postpone payment of such amounts to the
Participant until such time that the payments would be
deductible by the Company. Provided, however, that no payment
postponed pursuant to this subsection 4(e) shall be postponed
beyond the first anniversary of the date such Participant
terminated employment. Any Lump Sum Payment postponed
pursuant to this subsection 4(e) shall include interest for
the period such Lump Sum Payment is postponed at a rate
yielding interest equivalent to the per annum secondary
market discount rate for six-month U.S. Treasury Bills as
published by the Federal Reserve Board for the calendar week
ending prior to January 1 (for interest to be credited for
either of the two subsequent fiscal uarters ending March 31
or June 30) or prior to July 1 (for interest to be credited
for either of the subsequent fiscal quarters ending on
September 30 or December 31), or such other rate as
determined pursuant to uniform Committee rules.
(f) Notwithstanding any other provisions of this Plan to the
contrary, except where waived by the Participant's spouse as
required under the provisions of the Retirement Plan, all
retirement benefits payable to a Participant shall be paid in
the same
form as the benefits would be payable under the Retirement
Plan. Provided, however, for each Participant whose
employment terminates after February 18, 2002, if the amount
of the Lump Sum Distribution, calculated as if such
Participant (or surviving spouse or designated beneficiary,
as the case may be) had made an election to receive a Lump
Sum Distribution at the earliest time that such person could
have made an election under subsection 4(a)(i), does not
exceed $25,000, then such Lump Sum Distribution shall be paid
at the earliest time such person could have made an election
under subsection 4(a)(i).
5. Amendment and Termination. The Corporation, by action of its Board of
Directors, may amend the Second Supplemental Benefit Plan in any
respect, or terminate the Second Supplemental Benefit Plan; provided,
however, that no such amendment or termination shall be effective to
the extent it eliminates or reduces any "Section 411(d)(6) protected
benefit" or adds or modifies conditions relating to "Section 411(d)(6)
protected benefits" the result of which is a further restriction on
such benefit unless such protected benefits are preserved with respect
to benefits accrued as of the later of the adoption date or effective
date of the amendment. "Section 411(d)(6) protected benefits" are
benefits described in Section 411(d)(6)(A) of the Internal Revenue
Code of 1986, early retirement benefits and retirement-type subsidies,
and optional forms of benefit.
6. Definitions. The following capitalized terms shall have the respective
meanings set forth below:
(a) "Benefit" shall mean a benefit payable pursuant to, and
determined in accordance with the provisions of the Second
Supplemental Benefit Plan.
(b) "Change of Control" shall mean that: (i) a third person,
including a "group" as defined in Section 13(d)(3) of the
Securities Exchange Act of 1934, has acquired shares of the
Corporation having 20 percent or more of the total number of
votes that may be cast for the election of Directors of the
Corporation, or (ii) as the result of any cash tender or
exchange offer, merger or other business combination, sale of
assets or contested election, or any combination of the
foregoing transactions, the persons who were directors of the
Corporation before the transaction have ceased to constitute a
majority of the Board of Directors of the Corporation or any
successor to the Corporation.
(c) "Code" shall mean the Internal Revenue Code of 1986, as
amended.
(d) "Corporation" shall mean Kimberly-Clark Corporation, and any
successor corporation.
(e) "Committee" shall mean the Committee named under the
Retirement Plan.
(f) "Earnings" shall mean compensation paid by one or more of the
designated affiliated companies shown in Appendix B of the
Retirement Plan for personal services rendered to one or more
of such companies (before any withholding required by law or
authorized by the person to whom such compensation is
payable), including overtime, bonuses, incentive compensation,
Regular Deferred Deposits and special Deferred Deposits under
the Kimberly-Clark Corporation Salaried Employees' Incentive
Investment Plan, and any salary or bonus, or both, deferred
under the Kimberly-Clark Corporation Deferred Compensation
Plan, but excluding any payments in lieu of vacation,
severance payments, compensation paid in a form other than
cash (such as goods, services, and, except as otherwise
provided herein, contributions to employee benefit programs),
service or suggestion awards, and all other special or unusual
compensation of any kind.
Notwithstanding the above, for Plan Years of the Retirement
Plan beginning on or after January 1, 1980, in the case of a
Participant on foreign assignment, as determined by the
Employer pursuant to rules adopted by the Committee, earnings
shall be base salary, as determined by the Participant's
Employer pursuant to rules adopted by the committee (without
regard to any limitation under Section 401(a)(17) of the Code)
plus overtime, bonuses, incentive compensation, and Regular
Deferred Deposits and Special Deferred Deposits under the
Kimberly-Clark Corporation Salaried Employees' Incentive
Investment Plan, and any salary or bonus, or both, deferred
under the Kimberly-Clark Corporation Deferred Compensation
Plan, but shall exclude foreign service premium, cost of
living adjustments, housing payments, tax equalization
payments, payments in lieu of vacation, severance payments,
compensation in a form other than cash (such as goods,
services, and, except as otherwise provided herein,
contributions to employee benefit programs), service or
suggestion award and all other special or unusual compensation
of any kind.
(g) "Employer" shall mean a participating employer shown in
Appendix A of the Retirement Plan.
(h) "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
(i) "Investment Grade" shall mean a bond rating of BBB minus, or
its equivalent, by one of the nationally recognized rating
agencies.
(j) "Lump Sum Payment" shall mean a form of benefit payable as a
lump sum cash payment, actuarially determined based on the
rate of interest equivalent to the yield on a 30-year Treasury
Bond as published in the Federal Reserve Statistical Release
for the week that contains the first business day of the month
prior to the date such Lump Sum payment is payable under this
Second Supplemental Benefit Plan, or such other rate as
determined pursuant to uniform Committee rules, and the
mortality table set forth for determining actuarial equivalent
benefits under Section 10.1(a) of the Retirement Plan, and (i)
in the case of a lump sum payment pursuant to subsection 4(a)
(i) of this Plan, based on the Participant's Benefit payable
from this Plan and his age at the date of such lump sum
payment, and (ii) in the case of a lump sum payment pursuant
to subsections 4(a)(ii) or 4(a)(iii) of this Plan, based on
the Participant's Benefit
payable under this plan, the earliest age at which his Benefit
from the Retirement Plan could commence if he terminated
employment, and the early retirement reduction factor
applicable at such age of commencement. Notwithstanding the
foregoing, the 30-year Treasury Bond yield shall be used in
determining a lump sum cash payment so long as such rate is
published by the Federal Reserve. In the event that the
Federal Reserve ceases to publish the 30-year Treasury Bond
rate, a lump sum cash payment will be actuarially determined
based on the rate of interest equivalent to the yield on the
longest term Treasury Bond published in the Federal Reserve
Statistical Release which is no more than 30-years but not
less than for a 10-year term.
(k) "Participant" shall mean a participant in the Retirement Plan
who (i) is a "managerial or highly compensated employee" of an
Employer, within the meaning of Title I of ERISA, and (ii) has
earnings in excess of the limit provided under Section
401(a)(17) of the Code for any calendar year in which the
Participant participates in the Retirement Plan, except that
no individual shall be a participant herein to the extent that
such participation is precluded by an agreement between the
Corporation and such individual or such individual is subject
to a separate agreement regarding deferred compensation which
provides for similar benefits.
(l) "Retirement Plan" shall mean the Kimberly-Clark Corporation
Pension Plan, or any successor defined benefit pension plan.
(m) "Second Supplemental Benefit Plan" shall mean the Second
Supplemental Benefit Plan to the Kimberly-Clark Corporation
Pension Plan.
(n) "Supplemental Plan" shall mean the Supplemental Benefit Plan
to the Kimberly-Clark Corporation Pension Plan, or any
successor to such plan.
(o) "Survivor" shall refer to any of a Designated Beneficiary,
surviving spouse or Surviving Minor Children of a Participant,
within the meaning of the Retirement Plan.
(p) "Timely Elected" shall mean as follows:
(i) For payments which commence under the Retirement Plan
prior to January 1, 1996, the Participant has elected
to receive such Lump Sum Payment either (aa) in the
calendar year prior to the year in which the payments
are eligible to commence under the Retirement Plan or
(bb) at least 90 days prior to the date such Lump Sum
payment is payable under this Second Supplemental
Benefit Plan;
(ii) For payments which commence under the Retirement Plan
on or after January 1, 1996 and prior to February 18,
2002 the Participant has elected to receive such Lump
Sum Payment no later than the earlier of (aa) the
calendar year prior to the year in which the payments
are eligible
to commence under the Retirement Plan, (bb) at least
90 days prior to the date such Lump Sum payment is
payable under this Second Supplemental Benefit Plan
or (cc) for Participants who terminate employment
prior to having attained age 55, the calendar year in
which the Participant attained age 54.
(iii) For payments which commence under the Retirement Plan
on or after February 18, 2002 the Participant has
elected to receive such Lump Sum Payment no later
than the calendar year prior to the year in which the
payments are eligible to commence under the
Retirement Plan.
(iv) In the event of the death of the Participant who has
not commenced payments under this Second Supplemental
Benefit Plan, the Participant's surviving spouse or
designated beneficiary, as the case may be may, with
the consent of the Retirement Trust Committee, elect
a Lump Sum Payment in writing no later than thirty
(30) days after the Participant's date of death.
(v) In the event that a Participant terminates service
due to a Disability as described in Section 4.5, the
Participant may, with the consent of the Retirement
Trust Committee, elect a Lump Sum Payment in writing
no later than thirty (30) days after the date the
Participant is determined to be disabled by the
Committee for the Pension Plan.
7. Miscellaneous
(a) The Corporation is the Plan Sponsor and Named Fiduciary of the
Second Supplemental Benefit Plan, within the meaning of ERISA.
(b) The Committee shall administer the Second Supplemental Benefit
Plan and shall have the same power and duties, and shall be
subject to the same limitations, as are set forth in the
Retirement Plan.
(c) An application or claim for a benefit under the Retirement
Plan, or an election to receive his benefit in a Lump Sum
Payment, shall constitute a claim for a Benefit under the
Second Supplemental Benefit Plan.