Exhibit No. (10)k
KIMBERLY-CLARK CORPORATION
RETIREMENT CONTRIBUTION EXCESS BENEFIT PROGRAM
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AMENDED AND RESTATED EFFECTIVE AUGUST 19, 1998
In recognition of the valuable services provided to Kimberly-Clark
Corporation (the "Corporation"), and its subsidiaries, by its employees, the
Board of Directors of the Corporation (the "Board") wishes to provide
additional retirement benefits to those individuals whose benefits under the
Kimberly-Clark Corporation Retirement Contribution Plan (the "RCP") are
restricted by the operation of the provisions of the Internal Revenue Code of
1986, as amended. It is the intent of the Corporation to provide these
benefits under the terms and conditions hereinafter set forth. This Program
is intended to encompass two plans, (i) an "excess benefit plan" within the
meaning of Section 3(36) of Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), and, as such, to be exempt from all of the provisions of
ERISA pursuant to Section 4(b)(5) thereof and (ii) a non-qualified
supplemental retirement plan which is unfunded and maintained primarily for
the purpose of providing deferred compensation for a select group of
management or highly compensated employees of the Corporation, pursuant to
Sections 201, 301 and 401 of ERISA and, as such, exempt from the provisions of
Parts II, III and IV of Title I of ERISA.
ARTICLE 1
Definitions
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Each term which is used in this Program and also used in the RCP shall have
the same meaning herein as the RCP.
Notwithstanding the above, for purposes of this Program, where the following
words and phrases appear in this Program they shall have the respective
meanings set forth below unless the context clearly indicates otherwise:
1.1 "Beneficiary" means the person or persons who under this Program
becomes entitled to receive a Participant's interest in the event of the
Participant's death. The Beneficiary need not be the same as the beneficiary
under the RCP.
1.2 A "Change of Control" of the Corporation shall be deemed to have taken
place if: (i) a third person, including a "group" as defined in Section
13(d)(3) of the Securities Exchange Act of 1934, as amended, acquires shares
of the Corporation having 20% 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 (a "Transaction"), the persons who were directors of the
Corporation before the Transaction shall cease to constitute a majority of the
Board of Directors of the Corporation of any successor to the Corporation.
1.3 "Code" means the Internal Revenue Code for 1986, as amended and any
lawful regulations or other pronouncements promulgated thereunder.
1.4 "Committee" means the Incentive Investment Plan Committee named under
the Kimberly-Clark Corporation Salaried Employees Incentive Investment Plan.
1.5 "Earnings" means remuneration when paid, or would have been paid but
for an Employee's deferral election, to a Participant from a Participating
Unit for personal services rendered to such Participating Unit (before any
withholding required by law or authorized by the person to whom such
remuneration is payable), including overtime, bonuses, incentive compensation,
vacation pay, deducted military pay, state disability payments received,
workers compensation payments received and, to the extent such deductions
decrease the individual's base pay, Before-Tax deferrals under the
Kimberly-Clark Corporation Salaried Employee Incentive Investment Plan,
contributions under the Kimberly-Clark Corporation Flexible Benefits Plan or
any other plan described under Section 125 of the Code, and deferrals under
the Kimberly-Clark Corporation Deferred Compensation Plan. Earnings shall
exclude any severance payments (except as provided in Section 4.3 of the RCP),
payments made under the Kimberly-Clark Corporation Equity Participation Plans,
pay in lieu of vacation, 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; provided, however that the
limitations on Earnings provided for pursuant to Code Sections 401(a)(17)
shall not apply under this Program. Notwithstanding the foregoing, Earnings
shall not include any remuneration paid to a Participant after payment of such
individual's Individual Account commences in accordance with Section 4.9
following the Participant's Termination of Service.
1.6 "Effective Date" means January 1, 1997.
1.7 "Excess Plan" means the plan established as part of the Program for
Participants whose Retirement Contributions to the RCP are limited solely by
Code Section 415.
1.8 "Individual Account" means the account established pursuant to Section
3.
1.9 "Investment Funds" means the phantom investment funds established
under this Program which will accrue earnings as if the Participant's
Individual Account held actual assets which were invested in the appropriate
Investment Fund as defined under the RCP.
1.10 "Participant" means any Employee who satisfies the eligibility
requirements set forth in Section 2. In the event of the death or
incompetency of a Participant, the term shall mean the Participant's personal
representative or guardian.
1.11 "Program" means the Kimberly-Clark Corporation Retirement
Contribution Excess Benefit Program as set forth herein and as the same may be
amended from time to time; provided, however, that the term "Excess Plan" or
"SRP" may be used to refer to only one of the two plans encompassed within the
Program.
1.12 "Retirement Date" means the date of Termination of Service of the
Participant on or after he attains age 55 and has 5 Years of Service with the
Corporation.
1.13 "RCP" means the Kimberly-Clark Corporation Retirement Contribution
Plan, as in effect from time to time.
1.14 "SRP" means the plan established as part of the Program for
Participants whose Retirement Contributions to the RCP are limited by the
application of the rules, or regulations, of Code Section 401(a)(4) or the
limitations of Code Section 401(a)(17), in either case alone or in conjunction
with the limitations of Code Section 415 or whose Earnings are not fully taken
into account in determining the Employee's Retirement Contributions to the
RCP.
1.15 "Termination of Service" means the Participant's cessation of his
service with the Corporation for any reason whatsoever, whether voluntarily or
involuntarily, including by reasons of retirement or death.
ARTICLE 2
Eligibility
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2.1 Any Employee who is a Participant in the RCP on or after the Effective
Date and whose Retirement Contributions to the RCP are limited solely by Code
Section 415 shall participate in the Excess Plan. Any other Employee who is a
Participant in the RCP on or after the Effective Date and whose Retirement
Contributions to the RCP are limited by the application of the rules, or
regulations, of Code Section 401(a)(4) or the limitations of Code Section
401(a)(17), in either case alone or in conjunction with the limitations of
Code Section 415 or whose Earnings are not fully taken into account in
determining the Employee's Retirement Contributions to the RCP shall
participate in the SRP; provided, however, that no Employee shall become a
Participant in the SRP unless such Employee is a member of a select group of
management or highly compensated Employees of the Corporation so that the SRP
is maintained as a plan described in Section 201(2) of ERISA.
2.2 Notwithstanding any of the foregoing provisions of Article 2 to the
contrary, any Employee who on the Effective Date is both an active employee of
the Corporation or its subsidiaries and is a Participant in the Kimberly-Clark
Tissue Company Defined Contribution Excess Benefit Program (the "KCTC Plan")
must elect to participate in this Program and shall, pursuant to this
election, as of the Effective Date, have the amount credited to the
Participant's Individual Account under the KCTC Plan transferred to this
Program. "Active employee" shall not include employees who are in transition
assignments or who are on Limited Service as defined under the Scott Paper
Company Termination Pay Plan for Salaried Employees.
ARTICLE 3
Individual Account
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3.1 The Corporation shall create and maintain an unfunded Individual
Account under the Excess Plan or the SRP, as applicable, for each Participant
to which it shall credit the amounts described in this Article 3.
Participants entitled to receive Retirement Contributions under the RCP shall
receive Retirement Contributions under the Excess Plan in an amount as would
have been contributed for such Participant under the RCP without regard to the
limitation on benefits imposed by Section 415 of the Code, and calculated
using Earnings as defined in this Program, but only to the extent that such
amount exceeds such limitations. In addition, each Participant shall receive
Retirement Contributions under the SRP as would have been contributed for such
Participant under the RCP without regard to the limitations on benefits
imposed by Sections 401(a)(17) and 401(a)(4) of the Code, and calculated using
Earnings as defined in this Program, but only to the extent that such amount
exceeds the Retirement Contributions under the RCP. Such Retirement
Contributions shall be made for each Participant on the same terms and
conditions, at the same times, and pursuant to the same elections made by the
Participant as they would have been if paid under the RCP, were not for such
limitations on benefits or Earnings.
3.2 For the period prior to July 1, 1997, as of the last day of each
calendar month, the Corporation shall credit each Participant's Individual
Account with deemed interest with respect to the then balance of the
Participant's Individual Account equal to 1% plus the rate shown for U.S.
Treasury Notes with a remaining maturity closest to, but not exceeded, 7
years, in the "representative mid-afternoon over the counter quotations
supplied by the Federal Reserve Bank of New York City, based on transactions
of $1 million or more," as reported in The Wall Street Journal published on
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the last business day of each calendar month; provided, however, the Committee
may change this crediting rating at any time for deemed interest not yet
credited to an Individual Account.
3.3 After June 30, 1997, each Participant's Retirement Contributions under
this Program shall be considered allocated to the Investment Funds in the same
proportion as the Participant has elected under the RCP pursuant to Section
6.1 thereof.
3.4 After June 30, 1997, reallocations between Investment Funds shall be
considered made at the same time, in the same proportionate amount, and to and
from the same Investment Funds under this Program as those made by the
Participant under Section 6.3 of the RCP; provided, however, that if such
Participant has no account balance under the RCP, the Participant may make
separate reallocation elections hereunder in a manner prescribed by the
Committee.
3.5 After June 30, 1997, the Corporation shall credit each Participant's
Individual Account with earnings, gains and losses as if such accounts held
actual assets and such assets were invested among such Investment Funds, in
the same proportion as the Participant has invested in the RCP; provided,
however, that if such Participant has no account balance under the RCP, the
Participant may make separate investment elections hereunder in the manner
prescribed by the Committee.
ARTICLE 4
Distributions of Benefit Supplement
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4.1 Retirement Benefit. Subject to Section 4.5 below, upon a
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Participant's Retirement Date, he shall be entitled to receive the amount of
his Individual Account. The form of benefit payment, and the time of
commencement of such benefit, shall be as provided in Section 4.4.
4.2 Termination Benefit. Upon the Termination of Service of a Participant
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prior to his Retirement Date, for reasons other than death, the Corporation
shall pay to the Participant, a benefit equal to his Individual Account.
Unless otherwise directed by the Committee, the termination benefit shall be
payable in a lump sum as set forth in Section 4.9 following the Participant's
Termination of Service. Upon payment following a Termination of Service, the
Participant shall immediately cease to be eligible for any other benefit
provided under this Program.
4.3 Death Benefits. Upon the death of a Participant or a retired
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Participant, the Beneficiary of such Participant shall receive the
Participant's remaining Individual Account. Payment of a Participant's
remaining Individual Account shall be made in accordance with Section 4.4.
4.4 Form of Benefit Payment.
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(a) Upon the happening of an event described in Sections 4.1, 4.2 or 4.3,
the Corporation shall pay to the Participant the amount specified therein in a
lump sum.
(b) In the event that a Participant retires as described in Section 4.1,
the Participant may, with the consent of the Committee, elect an installment
form of benefit payments. The written request must be made prior to December
31 of the calendar year preceding the Participant's Retirement Date. The
Committee may, in its sole discretion, grant the Participant's request.
(c) In the event of the death of the Participant, the Participant's
Beneficiary may, with the consent of the Committee, elect an installment form
of benefit payment. This written request must be made no later than thirty
(30) days after the Participant's date of death. The Committee may, in its
sole discretion, grant such Beneficiary's request.
(d) In the event that installment payments are to be made pursuant to
Subsections 4.4(b) or (c), such payments shall be in annual installments,
payable on a monthly basis. Such annual installments shall be payable using a
declining balance method over a period, no less than two (2) calendar years
and no more than twenty (20) calendar years.
Initially, the amount of any installments under the installment form of
payment described in this Subsection 4.4(d) shall be equal to the balance of
the Participant's Individual Account to be distributed divided by the number
of annual installments to be paid. The amount of the installment payments
shall be recomputed annually and the installment payments shall be increased
or decreased to reflect any changes in the Participant's Individual Account
due to fluctuations in earnings, gains and losses on the remaining balance and
the number of remaining annual installments. Monthly installment payments
will be made on the last business day of each calendar month.
4.5 Limitations on the Annual Amount Paid to a Participant.
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Notwithstanding any other provisions of this Program to the contrary, in the
event that a portion of the payments due a Participant pursuant to Sections
4.1, 4.2, 4.3 or 4.4 would not be deductible by the Corporation pursuant to
Section 162(m) of the Code, the Corporation, at its discretion, may postpone
payment of such amounts to the Participant until such time that the payments
would be deductible by the Corporation; provided, however, that no payment
postponed pursuant to this Section 4.5 shall be postponed beyond the first
anniversary of such Participant's Termination of Service.
4.6 Change of Control and Lump Sum Payments
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(a) If there is a Change of Control, notwithstanding any other provision
of this Program, any Participant who has an Individual Account hereunder may,
at any time during a twenty-four (24) month period immediately following a
Change of Control, elect to receive an immediate lump sum payment of the
balance of his Individual Account, reduced by a penalty equal to ten percent
(10%) of the Participant's Individual Account as of the last business day of
the month preceding the date of the election. The ten percent (10%) penalty
shall be permanently forfeited and shall not be paid to, or in respect of, the
Participant.
(b) If there is a Change of Control, notwithstanding any other provision
of this Program, any retired Participant, or Beneficiary, who has an
Individual Account hereunder may, at any time during a twenty-four (24) month
period immediately following a Change of Control, elect to receive an
immediate lump sum payment of the balance of his Individual Account, reduced
by a penalty equal to five percent (5%) of the Participant's Individual
Account as of the last business day of the month preceding the date of the
election. The five percent (5%) penalty of the retired Participant's or
Beneficiary's Individual Account shall be permanently forfeited and shall not
be paid to, or in respect of, the retired Participant or Beneficiary.
(c) In the event no such request is made by a Participant, a retired
Participant or Beneficiary, the Program shall remain in full force and effect.
4.7 Change in Credit Rating and Lump Sum Payments.
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In the event the Corporation's financial rating falls below Investment Grade,
a Participant, retired Participant, or Beneficiary may at any time during a
six (6) month period following the reduction in the Corporation's financial
rating, elect to receive an immediate lump sum payment of the balance of his
Individual Account reduced by a penalty equal to ten percent (10%) of the
Participant's Individual Account or five percent (5%) of the retired
Participant's or Beneficiary's Individual Account as of the last business day
of the month preceding the election. The penalties accrued hereunder shall be
permanently forfeited and shall not be paid to, or in respect of, the
Participant, retired Participant or Beneficiary.
In the event no such request is made by a Participant, retired Participant or
Beneficiary, the Program shall remain in full force and effect.
4.8 Tax Withholding. To the extent required by law, the Corporation shall
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withhold any taxes required to be withheld by any Federal, State or local
government.
4.9 Commencement of Payments. Unless otherwise provided, commencement of
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payments under Section 4.6 or 4.7 of this Program shall be as soon as
administratively feasible on or after the last business day of the month
following receipt of notice and approval by the Committee of an event which
entitles a Participant or a Beneficiary to payments under this Program.
Unless otherwise provided, commencement of payments under Section 4.1, 4.2 or
4.3 of this Program shall be payable in the first calendar quarter of the year
following the Plan year in which the Participant terminates employment from
the Corporation for any reason; provided, however, that such a termination
shall not be deemed to occur until immediately following the receipt of all
payment due to the Employee under the Scott Paper Company Termination Pay Plan
for Salaried Employees.
4.10 Recipients of Payments; Designation of Beneficiary. All payments to
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be made by the Corporation under the Program shall be made to the Participant
during his lifetime, provided that if the Participant dies prior to the
completion of such payments, then all subsequent payments under the Program
shall be made by the Corporation to the Beneficiary determined in accordance
with this Section. The Participant may designate a Beneficiary by filing a
written notice of such designation with the Committee in such form as the
Committee requires and may include contingent Beneficiaries. The Participant
may from time-to-time change the designated Beneficiary by filing a new
designation in writing with the Committee. If a married Participant
designates a Beneficiary or Beneficiaries other than his spouse at the time of
such designation, such designation shall not be effective (and the
Participant's spouse shall be the Beneficiary) unless:
(a) the spouse consents in writing to such designation;
(b) the spouse's consent acknowledges the effect of such designation,
which consent shall be irrevocable; and
(c) the spouse executes the consent in the presence of either a Plan
representative designated by the Committee or a notary public.
Notwithstanding the foregoing, such consent shall not be required if the
Participant establishes to the satisfaction of the Committee that such consent
cannot be obtained because (i) there is no spouse; (ii) the spouse cannot be
located after reasonable efforts have been made; or (iii) other circumstances
exist to excuse spousal consent as determined by the Committee. If no
designation is in effect at the time when any benefits payable under this Plan
shall become due, the Beneficiary shall be the spouse of the Participant, or
if no spouse is then living, the representatives of the Participant's estate.
ARTICLE 5
Vesting
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5.1 The balance of a Participant's Individual Account shall be 100% vested
at the same time as if the amounts had been credited to the Participant's
Account under the RCP.
5.2 K-C Aviation Benefit. Notwithstanding any other provision of the
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Plan, a Participant shall be fully vested in his Individual Account as of the
date on which he ceases to be an Eligible Employee under the Program, if such
Participant meets all of the following conditions:
(a) immediately prior to the Closing Date, as defined in the Agreement of
Purchase and Sale dated as of July 23, 1998 by and between the Corporation and
Gulfstream Aerospace Corporation (the "Agreement"), he must have been an
Employee employed by the Corporation or K-C Aviation Inc.; and
(b) as of the Closing Date, as defined in the Agreement, he must have
ceased to be an Eligible Employee solely on account of the sale of the stock
of K-C Aviation Inc. pursuant to the Agreement, and he must either (i) be
employed by the Buyer, as defined in the Agreement, immediately after he
ceases to be an Eligible Employee hereunder, or (ii) have been on a long-term
disability leave of absence from K-C Aviation Inc. as of the Closing Date, as
defined in the Agreement.
ARTICLE 6
Funding
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6.1 The Board may, but shall not be required to, authorize the
establishment of a trust by the Corporation to serve as the funding vehicle
for the benefits described herein. In any event, the Corporation's
obligations hereunder shall constitute a general, unsecured obligation,
payable solely out of its general assets, and no Participant shall have any
right to any specific assets of the Corporation.
ARTICLE 7
Administration
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7.1 The Committee shall administer this Program and shall have the same
powers and duties, and shall be subject to the same limitations as are set
forth in the Kimberly-Clark Corporation Salaried Employees Incentive
Investment Plan.
ARTICLE 8
Amendment and Termination
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8.1 The Corporation, by action of the Board, or the Compensation Committee
as designated by the Board, shall have the right at any time to amend this
Program in any respect, or to terminate this Program; provided, however, that
no such amendment or termination shall operate to reduce the benefit that has
accrued for any Participant who is participating in the Program nor the
payment due to a terminated Participant at the time the amendment or
termination is adopted. Continuance of the Program is completely voluntary
and is not assumed as a contractual obligation of the Corporation.
Notwithstanding the foregoing, this Program shall terminate when the RCP
terminates.
Any action permitted to be taken by the Board, or the Compensation Committee
as designated by the Board, under the foregoing provision regarding the
modification, alteration or amendment of the Program may be taken by the
Committee, using its prescribed procedures, if such action
(a) is required by law, or
(b) is estimated not to increase the annual cost of the Program by more
than $1,000,000.
Any action taken by the Board, the Compensation Committee as designated by the
Board, or Committee shall be made by or pursuant to a resolution duly adopted
by the Board, the Compensation Committee as designated by the Board, or
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Committee and shall be evidenced by such resolution or by a written instrument
executed by such persons as the Board, the Compensation Committee as
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designated by the Board, or Committee shall authorize for such purpose.
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The Committee shall report to the Chief Executive Officer of the Corporation
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before January 31 of each year all action taken by it hereunder during the
preceding calendar year.
ARTICLE 9
Miscellaneous
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9.1 Nothing contained herein (a) shall be deemed to exclude a Participant
from any compensation, bonus, pension, insurance, termination pay or other
benefit to which he otherwise is or might become entitle to as an Employee or
(b) shall be construed a conferring upon an Employee the right to continue in
the employ of the Corporation as an executive or in any other capacity;
provided, however, that if, at the time payments or installments of payments
are to be made hereunder, the Participant or the Beneficiary are indebted or
obligated to the Corporation, then the payments remaining to be made to the
Participant or the Beneficiary may, at the discretion of the Corporation, be
reduced by the amount of such indebtedness or obligation, provided, however,
that an election by the Corporation not to reduce any such payment or payments
shall not constitute a waiver of its claim for such indebtedness or
obligation.
9.2 Any amounts payable by the Corporation hereunder shall not be deemed
salary or other compensation to a Participant for the purposes of computing
benefits to which the Participant may be entitled under any other arrangement
established by the Corporation for the benefit of its Employees.
9.3 The rights and obligations created hereunder shall be binding on a
Participant's heirs, executors and administrators and on the successors and
assigns of the Corporation.
9.4 The Program shall be construed and governed by the laws of the State
of Wisconsin.
9.5 The rights of any Participant under this Program are personal and may
not be assigned, transferred, pledged or encumbered. Any attempt to do so
shall be void.
9.6 Neither the Corporation, its Employees, agents, any member of the
Board, the Plan Administrator nor the Committee shall be responsible or liable
in any manner to any Participant, Beneficiary, or any person claiming through
them for any benefit or action taken or omitted in connection with the
granting of benefits, the continuation of benefits or the interpretation and
administration of this Program.
9.7 An application or claim for a benefit under the RCP shall constitute a
claim for a benefit under this Program.
9.8 The Corporation is the plan sponsor. All actions shall be taken by
the Corporation in its sole discretion, not as a fiduciary, and need not be
applied uniformly to similarly situated individuals.