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SCHEDULE 14A INFORMATION
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the
Commission Only (as permitted
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Section 240.14a-11(c) or Section 240.14a-2.
Kimberly-Clark Corporation
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-12.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing
fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange
Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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March 13, 1998
Kimberly-Clark Corporation
WAYNE R. SANDERS
Chairman of the Board and
Chief Executive Officer
TO OUR STOCKHOLDERS:
On behalf of the Board of Directors and management of Kimberly-Clark
Corporation, I cordially invite you to the Annual Meeting of Stockholders to be
held on Thursday, April 30, 1998, at 11:00 a.m. at the Corporation's World
Headquarters, 351 Phelps Drive, Irving, Texas.
At the Annual Meeting, stockholders will be asked to elect four directors
for a three-year term and approve the selection of the Corporation's independent
auditor. These matters are fully described in the accompanying Notice of Annual
Meeting and Proxy Statement.
It is important that your stock be represented at the meeting regardless of
the number of shares you hold. You are encouraged to specify your voting
preferences by so marking and dating the enclosed proxy card. However, if you
wish to vote in accordance with the directors' recommendations, all you need do
is sign and date the card.
Please complete and return the proxy card in the enclosed envelope whether
or not you plan to attend the meeting. If you do attend and wish to vote in
person, you may revoke your proxy at that time.
If you plan to attend the meeting, please check the card in the space
provided. This will assist us with meeting preparations, and will enable us to
expedite your admittance. If your shares are not registered in your own name and
you would like to attend the meeting, please ask the broker, trust, bank or
other nominee which holds the shares to provide you with evidence of your share
ownership, which will enable you to gain admission to the meeting.
Sincerely,
/s/ WAYNE R. SANDERS
Wayne R. Sanders
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KIMBERLY-CLARK CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 30, 1998
The Annual Meeting of Stockholders of KIMBERLY-CLARK CORPORATION will be
held at the Corporation's World Headquarters, 351 Phelps Drive, Irving, Texas,
on Thursday, April 30, 1998, at 11:00 a.m. for the following purposes:
1. To elect four directors for a three-year term to expire at the 2001
Annual Meeting of Stockholders;
2. To approve the selection of Deloitte & Touche LLP as independent
auditor; and
3. To take action upon any other business which properly may come before
the meeting or any adjournment thereof.
Stockholders of record at the close of business on March 3, 1998 are
entitled to notice of and to vote at the meeting and any adjournment thereof.
It is important that your shares be represented at the meeting. I urge you
to sign, date and promptly return the enclosed proxy card in the enclosed
business reply envelope. No postage is required if mailed in the United States.
The accompanying Proxy Statement also is used to solicit voting
instructions for the shares of the Corporation's common stock which are held by
the trustees of the Corporation's Salaried and Hourly Employees Incentive
Investment Plans and Retirement Contribution Plan and the Tecnol Medical
Products, Inc. Employee Stock Ownership Plan for the benefit of the participants
in the plans. It is important that each participant in any such plan sign, date
and return the voting instruction card which is enclosed with the Proxy
Statement in the business reply envelope provided. No postage is necessary if
mailed in the United States.
By order of the Board of Directors.
/s/ DONALD M. CROOK
Donald M. Crook
Vice President and Secretary
P. O. Box 619100
Dallas, Texas 75261-9100
March 13, 1998
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PROXY STATEMENT
KIMBERLY-CLARK CORPORATION
P. O. Box 619100
Dallas, Texas 75261-9100
March 13, 1998
INTRODUCTION
The accompanying proxy is solicited on behalf of the Board of Directors of
Kimberly-Clark Corporation, a Delaware corporation (the "Corporation"), for use
at the Annual Meeting of Stockholders to be held on April 30, 1998 and at any
adjournment thereof. Proxies in the accompanying form, properly signed and
received in time for the meeting, will be voted as instructed. If no
instructions are given, proxies will be voted for the election of directors and
the approval of the selection of the Corporation's independent auditor. Any
proxy may be revoked by the stockholder granting it at any time before it is
voted by delivering to the Secretary of the Corporation another signed proxy
card, or a signed document revoking the earlier proxy.
Each stockholder of record at the close of business on March 3, 1998 will
be entitled to one vote for each share registered in such stockholder's name. As
of that date, there were outstanding 556,904,727 shares of common stock of the
Corporation.
The entire cost of the proxy solicitation, including the reasonable
expenses of brokers, fiduciaries and other nominees in forwarding proxy material
to beneficial owners, will be borne by the Corporation. In addition to the use
of the mail, solicitation may be made by telephone or otherwise by regular
employees of the Corporation. If undertaken, the expense of such solicitation
would be nominal. The Corporation has retained W.F. Doring & Co., Inc. to aid in
the solicitation of proxies from its stockholders. The fees of such firm are
estimated to be $10,000, plus reimbursement of out-of-pocket expenses.
Stockholders' proxies are received by the Corporation's independent proxy
processing agent, and the vote is certified by independent inspectors of
election. Proxies and ballots that identify the vote of stockholders will be
kept confidential, except as necessary to meet legal requirements, in cases
where stockholders request disclosure or write comments on their proxy cards, or
in a contested matter involving an opposing proxy solicitation. During the proxy
solicitation period, the Corporation will receive vote tallies from time to time
from the independent proxy processing agent, but such tallies will provide
aggregate data rather than names of stockholders. The agent will notify the
Corporation if a stockholder has failed to vote so that he or she may be
reminded and requested to do so.
The Corporation intends to mail this Proxy Statement and proxy card,
together with the 1997 Annual Report to Stockholders, to the stockholders on
March 13, 1998. If a stockholder is a participant in the Corporation's Automatic
Dividend Reinvestment and Stock Purchase Plan, the proxy card represents the
number of full shares in the stockholder's account in such plan, as well as
shares registered in the stockholder's name.
The Corporation also intends to mail this Proxy Statement, the 1997 Annual
Report to Stockholders and a voting instruction card, which is solicited on
behalf of the Board of Directors of the Corporation, on March 13, 1998 to each
participant in the Corporation's Salaried and Hourly Employees Incentive
Investment Plans and Retirement Contribution Plan and the Tecnol Medical
Products, Inc. Employee Stock Ownership Plan (the "Tecnol Plan"). Both the
trustee of the Corporation's plans, First Trust N.A., and the trustee of the
Tecnol Plan, as the stockholders of record of shares of the common stock of the
Corporation held in the plans, will vote whole shares of stock attributable to
each participant's interest in the plans in accordance with the directions such
participant gives on such voting instruction card, or, if no directions are
given by the participant, in accordance with the directions of the respective
plan committee.
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Under Section 216 of the Delaware General Corporation Law and the
Corporation's By-Laws, a majority of the shares of the Corporation's common
stock, present in person or represented by proxy, shall constitute a quorum for
purposes of the Annual Meeting. In all matters other than the election of
directors, the affirmative vote of a majority of shares present in person or
represented by proxy at the Annual Meeting and entitled to vote on the subject
matter shall be the act of the stockholders. Abstentions are treated as votes
against a proposal and broker non-votes have no effect on the vote. Directors
shall be elected by a plurality of the votes present in person or represented by
proxy at the Annual Meeting and entitled to vote on the election of directors.
PROPOSAL 1. ELECTION OF DIRECTORS
GENERAL INFORMATION
The Restated Certificate of Incorporation of the Corporation provides that
the Board of Directors shall consist of not less than 11 nor more than 25
members, as determined from time to time by the affirmative vote of a majority
of the entire Board of Directors, and that the Board shall be divided into three
classes. Directors of one class are elected each year for a term of three years.
As of the date of this Proxy Statement, the Board of Directors consists of 12
members, four of whom have terms which expire at this year's Annual Meeting
(Class of 1998), four of whom have terms which expire at the 1999 Annual Meeting
(Class of 1999), and four of whom have terms which expire at the 2000 Annual
Meeting (Class of 2000).
The four nominees for director set forth on the following pages are
proposed to be elected at the Annual Meeting to serve for a term to expire at
the 2001 Annual Meeting of Stockholders (Class of 2001) and until their
successors are elected and have qualified. Should any such nominee become unable
to serve, proxies may be voted for another person designated by management. All
nominees have advised the Corporation that they will serve if elected. The
remaining eight directors will continue to serve as directors for the terms set
forth on the following pages.
The nominees for director are such that immediately after the election of
such nominees to the Board of Directors, a majority of all directors holding
office shall be "Independent Directors" as that term is defined in By-Law 24 of
the Corporation's By-Laws. Generally, the By-Law provides that individuals are
Independent Directors if they are not employed by the Corporation or its
subsidiaries or equity companies and do not have, and are not affiliated with an
entity that has, business transactions or relationships with the Corporation or
its subsidiaries that are required to be disclosed in the Corporation's proxy
statement. The By-Law authorizes the Audit Committee of the Board of Directors
to determine that an individual who has a transaction or relationship disclosed
in the proxy statement is nevertheless an Independent Director if it determines
by resolution that such person is independent of management and free from any
relationship that would interfere with such person's independent judgment as a
Board member.
CERTAIN INFORMATION REGARDING DIRECTORS AND NOMINEES
The names of the directors continuing in office and nominees, their ages as
of the date of the Annual Meeting, the year each first became a director, their
principal occupations during at least the past five years, other directorships
held by each as of the date hereof and certain other biographical information
are set forth on the following pages by Class, in the order of the next Class to
stand for election.
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NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
FOR A THREE-YEAR TERM EXPIRING AT THE
2001 ANNUAL MEETING OF STOCKHOLDERS
(CLASS OF 2001)
PASTORA SAN JUAN CAFFERTY Professor University
of Chicago
Mrs. Cafferty, age 57, has been a Professor since 1985 at
the University of Chicago's School of Social Service
Administration where she has been a member of the faculty
[Photo] since 1971. Mrs. Cafferty is a director of the People's
Energy Corporation, Harris Trust and Savings Bank, Harris
Bancorp, Inc., Harris Bankmont, Inc., Waste Management,
Inc., The Lyric Opera, and Rush-Presbyterian-St. Luke's
Medical Center in Chicago. She has been a director of the
Corporation since 1976.
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CLAUDIO X. GONZALEZ Chairman of the Board
and Managing Director
Kimberly-Clark de Mexico, S.A. de C.V.
Mr. Gonzalez, age 63, has served as Chairman of the Board
and Managing Director of Kimberly-Clark de Mexico, S.A. de
C.V., an equity company of the Corporation and a producer of
disposable consumer products, pulp, and writing and other
papers, since 1973. He was employed by the Corporation in
[Photo] 1956 and by Kimberly-Clark de Mexico, S.A., the predecessor
of Kimberly-Clark de Mexico, S.A. de C.V., in 1957. Mr.
Gonzalez was elected Vice President of Operations of
Kimberly-Clark de Mexico, S.A. in 1962 and Executive Vice
President and Managing Director in 1966. He is a director of
Kellogg Company, General Electric Company, The Mexico Fund,
Planet Hollywood International, Banco Nacional de Mexico,
Grupo Industrial ALFA, Grupo Modelo, Grupo Carso, Telefonos
de Mexico and Televisa, and is a member of the International
Advisory Council of J.P. Morgan. He has been a director of
the Corporation since 1976.
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LOUIS E. LEVY Retired Partner and Vice Chairman
KPMG Peat Marwick
Mr. Levy, age 65, served as a partner of KPMG Peat Marwick
or its predecessor firms from 1968 until his retirement from
that firm in 1990. He had been a member of the board of
[Photo] directors of KPMG Peat Marwick or its predecessor firms from
1978 until his retirement. In addition, he was Vice Chairman
of KPMG Peat Marwick, responsible for Professional Standards
and Quality Assurance. Mr. Levy is a member of the board of
directors of Household International, Inc. and the BT Alex,
Brown/Flag Investors Group of Mutual Funds. He is Chairman
Emeritus of the National Multiple Sclerosis Society. He has
been a director of the Corporation since 1991.
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LINDA JOHNSON RICE President and
Chief Operating Officer
Johnson Publishing Company, Inc.
[Photo] Mrs. Johnson Rice, age 40, has been President and Chief
Operating Officer of Johnson Publishing Company, Inc., a
multi-media company, since 1987. She joined that company in
1980, and became Vice President in 1985. Mrs. Johnson Rice
is a director of Bausch & Lomb Incorporated and Viad
Corporation. She has been a director of the Corporation
since 1995.
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MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
TERM EXPIRING AT THE
1999 ANNUAL MEETING OF STOCKHOLDERS
(CLASS OF 1999)
JOHN F. BERGSTROM President and
Chief Executive Officer
Bergstrom Corporation
Mr. Bergstrom, age 51, has served as Chairman and Chief
Executive Officer of Bergstrom Corporation, Neenah,
Wisconsin, for more than the past five years. Bergstrom
Corporation owns and operates automobile sales and leasing
[Photo] businesses and a credit life insurance company in Wisconsin
and, until January of 1998, owned and operated hotels. Mr.
Bergstrom is a director of the Wisconsin Energy Corporation,
Universal Foods Corporation, Driver's Mart Worldwide, The
Catholic Diocese of Green Bay, The First National Bank-Fox
Valley, Midwest Express Holdings, Inc., and the Green Bay
Packers. He also is a member of the Board of Trustees of
Marquette University and the Medical College of Wisconsin.
He has been a director of the Corporation since 1987.
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PAUL J. COLLINS Vice Chairman
Citicorp and Citibank, N.A.
Mr. Collins, age 61, has been a Vice Chairman of Citicorp
and its principal subsidiary, Citibank, N.A., New York, New
York, since 1988. He previously was elected Senior Corporate
[Photo] Officer and Chief Planning Officer of those companies in
1985, and Group Executive of those companies in 1984. He
joined Citicorp in 1961 and served as Executive Vice
President prior to becoming Group Executive. Mr. Collins
also is a director of Citicorp and Citibank, N.A., and a
trustee of Carnegie Hall Corporation and the Central Park
Conservancy. He has been a director of the Corporation since
1983.
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ROBERT W. DECHERD Chairman of the Board, President,
and Chief Executive Officer
A. H. Belo Corporation
Mr. Decherd, age 47, has served as Chairman of the Board and
Chief Executive Officer of A. H. Belo Corporation, a
[Photo] broadcasting and publishing company, since January 1987. Mr.
Decherd became President of that company in January 1994,
and previously served as President from January 1985 through
December 1986. From January 1984 through December 1986, he
served as Chief Operating Officer. He has been a director of
that company since 1976. Mr. Decherd is a director of CCBG
Corporation and the Tomas Rivera Policy Institute. He has
been a director of the Corporation since 1996.
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FRANK A. MCPHERSON Retired Chairman of the Board
and Chief Executive Officer
Kerr-McGee Corporation
Mr. McPherson, age 65, served as Chairman of the Board and
Chief Executive Officer of Kerr-McGee Corporation, a natural
resources company, from 1983 until his retirement from such
offices on February 1, 1997. Previously, he served as
President of that company from 1980 to 1983, and Vice
Chairman from 1978 to 1980. He joined Kerr-McGee Corporation
[Photo] in 1957 and held various assignments in oil, natural gas and
coal operations and chemical manufacturing. Mr. McPherson is
a director of Tri-Continental Corporation, Seligman Quality
Fund, Inc., Seligman Select Municipal Fund, Inc., Seligman
Group of Mutual Funds, MAPCO and Bank of Oklahoma Financial
Corporation. Mr. McPherson also is a member of the board of
trustees of the Oklahoma Nature Conservancy, a member of the
Southwest Region Board of Trustees of the Boys and Girls
Clubs of America and President of the Oklahoma Foundation
for Excellence in Education. He has been a director of the
Corporation since 1990.
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TERM EXPIRING AT THE
2000 ANNUAL MEETING OF STOCKHOLDERS
(CLASS OF 2000)
WILLIAM O. FIFIELD Partner
Sidley & Austin
Mr. Fifield, age 51, has served as a partner in the law firm
of Sidley & Austin since 1977. He is the managing partner in
the firm's Dallas, Texas office, a member of the firm's
executive committee, and a member of the firm's space and
[Photo] new business committees. He has served the firm in a number
of other administrative capacities, including co-chair of
the firm's committee on computers and legal technology, co-
chair of the firm's committee on practice development, and a
member of the firm's committees on accounting and finance,
assignment and compensation of associates, firm functions,
and international operations. He has been a director of the
Corporation since 1995.
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WAYNE R. SANDERS Chairman of the Board and
Chief Executive Officer
Mr. Sanders, age 50, has served as Chief Executive Officer
of the Corporation since 1991 and Chairman of the Board of
the Corporation since 1992. He previously had been elected
President and Chief Operating Officer in 1990. Employed by
the Corporation in 1975, Mr. Sanders was appointed Vice
President of Kimberly-Clark Canada Inc., a wholly owned
subsidiary of the Corporation, in 1981 and was appointed
[Photo] Director and President in 1984. Mr. Sanders was elected
Senior Vice President of Kimberly-Clark Corporation in 1985
and was appointed President - Infant Care Sector in 1987,
President - Personal Care Sector in 1988 and President -
World Consumer, Nonwovens and Service and Industrial
Operations in 1990. Mr. Sanders is a director of Adolph
Coors Company, Coors Brewing Company, Texas Instruments
Incorporated and Chase Bank of Texas, National Association.
He also is a member of the Marquette University Board of
Trustees and is a national trustee of the Boys and Girls
Clubs of America. He has been a director of the Corporation
since 1989.
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WOLFGANG R. SCHMITT Chairman of the Board and
Chief Executive Officer
Rubbermaid Incorporated
Mr. Schmitt, age 54, has served as Chairman of the Board of
Rubbermaid Incorporated since 1993, and as Chief Executive
[Photo] Officer since 1992. He previously was elected President and
Chief Operating Officer in 1991, Executive Vice President in
1987 and President of the Home Products Division in 1984. He
joined Rubbermaid Incorporated in 1966 and has been employed
in various marketing and research and development
assignments. Mr. Schmitt is a director of Rubbermaid
Incorporated and Parker-Hannifin Corporation and serves as a
trustee of Otterbein College. He has been a director of the
Corporation since 1994.
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RANDALL L. TOBIAS Chairman of the Board and
Chief Executive Officer
Eli Lilly and Company
Mr. Tobias, age 56, is Chairman of the Board and Chief
Executive Officer of Eli Lilly and Company. He was named to
[Photo] that position in June 1993. He previously had been Vice
Chairman of the Board of AT&T since 1986, and had been
employed by AT&T since 1964. Mr. Tobias is a director of Eli
Lilly and Company, Phillips Petroleum, Inc. and
Knight-Ridder, Inc. He is a member of the Business Council
and the Business Roundtable. He is chairman of the board of
trustees of Duke University and a trustee of the Colonial
Williamsburg Foundation. He has been a director of the
Corporation since 1994.
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SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as of December 31, 1997
regarding the number of shares of the common stock of the Corporation
beneficially owned by all directors and nominees, by each of the executive
officers named in "Executive Compensation" below, and by all directors, nominees
and executive officers as a group.
NAME OF INDIVIDUAL OR AMOUNT AND NATURE OF
IDENTITY OF GROUP BENEFICIAL OWNERSHIP(1)(2)(3)
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John F. Bergstrom........................................... 10,800(4)
Pastora San Juan Cafferty................................... 4,402(5)
Paul J. Collins............................................. 9,200(5)
Robert W. Decherd........................................... 10,400(6)
John W. Donehower........................................... 247,904(7)
O. George Everbach.......................................... 220,538(7)
Thomas J. Falk.............................................. 259,518(7)
William O. Fifield.......................................... 3,200(5)
Claudio X. Gonzalez......................................... 105,228
Louis E. Levy............................................... 4,600(5)
Frank A. McPherson.......................................... 7,400(5)(8)
Linda Johnson Rice.......................................... 3,200
Wayne R. Sanders............................................ 933,241(7)(9)
Wolfgang R. Schmitt......................................... 2,200(5)
Kathi P. Seifert............................................ 221,444(7)
Randall L. Tobias........................................... 3,200(5)
All directors, nominees and executive officers as a group... 2,557,155(7)(10)
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(1) Except as otherwise noted, the directors, nominees and named executive
officers, and the directors, nominees and executive officers as a group,
have sole voting and investment power with respect to the shares listed.
(2) Each director, nominee and named executive officer, and all directors,
nominees and executive officers as a group, own less than one percent of
the outstanding shares of the Corporation's common stock.
(3) For each director who is not an officer or employee of the Corporation or
any of its subsidiaries or equity companies, share amounts include shares
issued pursuant to the Outside Directors' Stock Compensation Plan. See
"Executive Compensation - Compensation of Directors."
(4) Includes 1,600 shares held by a trust for Mr. Bergstrom's son and daughter
for which Mr. Bergstrom serves as trustee.
(5) In addition to the shares listed in the table which are beneficially owned,
the following directors have stock credits allocated to their deferred
compensation accounts as of December 31, 1997 under the Corporation's
deferred compensation plan for directors: Mrs. Cafferty, 21,049 credits;
Mr. Collins, 42,548 credits; Mr. Fifield, 2,746 credits; Mr. Levy, 5,746
credits; Mr. McPherson, 842 credits; Mr. Schmitt, 4,115 credits; and Mr.
Tobias, 5,456 credits. The accounts reflect the election of the directors
to defer into stock credits compensation previously earned by them as
directors of the Corporation. Although such directors are fully at risk as
to the price of the Corporation's common stock represented by stock
credits, such stock credits are not shares of stock and the directors do
not have any rights as holders of common stock with respect to such stock
credits. See "Executive Compensation-Compensation of Directors" for
additional information concerning such deferred stock accounts.
(6) Includes 2,000 shares held by a trust for which Mr. Decherd serves as
trustee and with respect to which Mr. Decherd disclaims beneficial
ownership. Also includes 1,200 shares held by Mr. Decherd's son.
(7) Includes the following shares which could be acquired within 60 days of
December 31, 1997 by: Mr. Donehower, 178,206 shares; Mr. Everbach, 145,118
shares; Mr. Falk, 216,736 shares; Mr. Sanders, 738,718 shares; Ms. Seifert,
204,092 shares; and all directors, nominees and executive officers as a
group, 1,891,340 shares. Also, shares of common stock held by the trustee
of the Corporation's Salaried Employees Incentive Investment Plan for the
benefit of, and which are attributable to the accounts in the plan of, the
respective directors, nominees and executive officers above are included in
this table.
(8) Mr. McPherson shares voting and investment power with respect to 6,200
shares.
(9) Excludes 21,760 shares held in trust for the benefit of Mr. Sanders'
children with respect to which Mr. Sanders disclaims beneficial ownership.
(10) Voting and investment power with respect to 6,200 of such shares is shared.
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CERTAIN TRANSACTIONS AND BUSINESS RELATIONSHIPS
In 1997, the Corporation and certain of its subsidiaries retained the legal
services of Sidley & Austin, Chicago, Illinois. William O. Fifield, a director
of the Corporation, is a partner in that firm. Management believes that the cost
of services so rendered by Sidley & Austin during 1997 was reasonable compared
with the cost of obtaining similar services from other firms. The Corporation
and certain of its subsidiaries expect to retain Sidley & Austin in 1998.
The Corporation paid $1,018,000 to Bergstrom Corporation in 1997 for hotel,
lodging, and automobile rental and purchasing costs. John F. Bergstrom and
Richard A. Bergstrom, his brother, own 75 percent and 25 percent, respectively,
of Bergstrom Corporation. Bergstrom Corporation sold its hotel and lodging
businesses in January of 1998. In addition, the Corporation leases office space
in Neenah and Menasha, Wisconsin from Neenah Downtown Redevelopment Associates
Limited Partnership and Downtown Menasha Associates Limited Partnership,
respectively, two partnerships engaged in the redevelopment of downtown real
estate in such cities. John F. Bergstrom owns a 15 percent limited partner
interest in each such partnership. During 1997, rental payments made by the
Corporation to such partnerships totaled $622,000 and $27,000, respectively.
During 1997, K-C Aviation Inc., a wholly owned subsidiary of the
Corporation, serviced and managed a corporate aircraft owned by Bergstrom
Pioneer Auto and Truck Leasing ("Bergstrom Leasing"), a wholly owned subsidiary
of Bergstrom Corporation. In addition, during 1997, the Corporation provided
certain pilot services to Bergstrom Corporation with respect to such aircraft.
The total fees paid in 1997 to K-C Aviation Inc. and the Corporation by
Bergstrom Leasing and Bergstrom Corporation for such services rendered were
$716,000.
Management believes that the amounts charged and paid in connection with
the foregoing arrangements were reasonable compared with the amounts which would
be charged and paid for similar services or products from an unaffiliated third
party. The Corporation and K-C Aviation Inc. expect to engage in similar
transactions (excluding hotel and lodging) with Bergstrom Corporation, Bergstrom
Leasing and the two partnerships in 1998.
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors met eight times in 1997. All of the incumbent
directors attended at least 75% of the total number of meetings of the Board and
committees of the Board on which they served, and the average attendance for
each such director at such meetings was 98%.
The standing committees of the Board include, among others, the Audit
Committee, the Compensation Committee and the Nominating Committee.
The Audit Committee, currently composed of Mr. Collins, Chairman, Mr.
Bergstrom, Mr. Decherd, Mrs. Johnson Rice, Mr. Schmitt and Mr. Fifield, met
three times during 1997. The Committee selects, subject to stockholder approval,
and engages independent auditors to audit the books, records and accounts of the
Corporation, determines the scope of such audits, and establishes policy in
connection with internal audit programs of the Corporation.
The Compensation Committee, currently composed of Mr. Levy, Chairman, Mrs.
Cafferty, Mr. McPherson and Mr. Tobias, met three times during 1997. The nature
and scope of the Committee's responsibilities are set forth below under
"Executive Compensation - Board Compensation Committee Report on Executive
Compensation."
The Nominating Committee, currently composed of Mr. McPherson, Chairman,
Mrs. Cafferty, Mr. Decherd and Mr. Levy, met one time during 1997. All such
members of the Nominating Committee are Independent Directors. See "Proposal 1.
Election of Directors - General Information." The Committee proposes and
considers suggestions for candidates for membership on the Board, and recommends
candidates to the Board to fill Board vacancies. It also proposes to the Board a
slate of directors for submission to the stockholders at the Annual Meeting.
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STOCKHOLDER NOMINATIONS FOR DIRECTORS
The Nominating Committee of the Board of Directors considers nominees
recommended by stockholders as candidates for election to the Board of Directors
at the Annual Meeting of Stockholders. A stockholder wishing to nominate a
candidate for election to the Board at the Annual Meeting is required to give
written notice to the Secretary of the Corporation of his or her intention to
make such a nomination. The notice of nomination must be received by the
Corporation not less than 50 days nor more than 75 days prior to the
stockholders' meeting, or if the Corporation gives less than 60 days' notice of
the meeting date, the notice of nomination must be received within 10 days after
the meeting date is announced. The notice of nomination is required to contain
certain information about both the nominee and the stockholder making the
nomination. The Corporation may require that the proposed nominee furnish other
information to determine that person's eligibility to serve as a director. A
nomination which does not comply with the above procedure will be disregarded.
EXECUTIVE COMPENSATION
The table which follows sets forth information concerning compensation for
each of 1995, 1996 and 1997 awarded to, earned by, or paid to the chief
executive officer and the four most highly compensated executive officers of the
Corporation other than the chief executive officer whose total annual salary and
bonus exceeded $100,000:
SUMMARY COMPENSATION TABLE
LONG TERM
ANNUAL COMPENSATION COMPENSATION
----------------------------------- ----------------------
AWARDS
---------- PAYOUTS
OTHER SECURITIES ---------
ANNUAL UNDERLYING LTIP ALL OTHER
COMPENSATION OPTIONS PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(2) (#)(3) ($) ($)(4)
- --------------------------- ---- --------- -------- ------------ ---------- --------- ------------
Wayne R. Sanders 1997 950,000 232,320(1) 3,506 180,000 1,792,841 4,800
Chairman of the Board 1996 800,000 895,488(1) 1,415 210,000 1,233,089 4,500
and Chief Executive Officer 1995 800,000 844,800(1) 4,187 496,318 0 4,500
John W. Donehower 1997 370,000 77,000 1,448 48,000 0 4,800
Senior Vice President 1996 337,500 296,800(1) 0 80,000 246,617 4,500
and Chief Financial Officer 1995 295,000 243,200(1) 395 74,446 0 4,500
O. George Everbach 1997 375,000 77,000 656 48,000 0 4,800
Senior Vice President - Law 1996 362,500 296,800 400 80,000 493,235 4,500
and Government Affairs 1995 340,000 243,200 0 41,358 0 4,500
Thomas J. Falk 1997 400,000 114,204(1) 3,510 60,000 136,165 4,800
Group President - 1996 350,000 390,080 4,672 80,000 164,411 4,500
Tissue, Pulp and Paper 1995 300,000 296,667 912 124,078 0 4,500
Kathi P. Seifert 1997 350,000 220,000 1,837 48,000 136,165 4,800
Group President - 1996 300,000 339,200 830 60,000 79,061 4,500
North American Personal 1995 265,000 296,667 0 124,078 0 4,500
Care Products
- ---------------
(1) Includes amounts voluntarily deferred by the executive officer under the
Corporation's Deferred Compensation Plan. The Deferred Compensation Plan
allows executive officers to defer portions of current base salary and bonus
compensation otherwise payable during the year. See "Board Compensation
Committee Report on Executive Compensation-Tax Deduction for Executive
Compensation" below for a more complete description of the plan.
(2) Amounts shown consist entirely of amounts reimbursed for federal and state
income taxes on certain personal and spousal travel required for company
purposes. The value of such travel did not, for any of the executive
officers named above, exceed, in the aggregate, $50,000 in 1995, 1996 or
1997.
(3) The Corporation paid a stock dividend on April 2, 1997 to stockholders of
record on March 7, 1997 in order to effect a two-for-one stock split of the
Corporation's common stock (the "Stock Split"). The options are shown on a
post-Stock Split basis. The number of options granted in 1995 reflect
adjustments made by the Compensation Committee in December 1995 to preserve
the benefit to participants in connection with, and give effect to, the
spin-off by the Corporation on November 30, 1995 of the common stock of
Schweitzer-Mauduit International, Inc.
(4) Amounts shown consist solely of the Corporation's matching contributions
under the Corporation's Salaried Employees Incentive Investment Plan.
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The policies and practices of the Corporation pursuant to which the
compensation set forth in the Summary Compensation Table was paid or awarded is
described under "Board Compensation Committee Report on Executive Compensation"
below.
The table which follows sets forth information (on a post-Stock Split
basis) concerning grants of stock options during 1997 to each of the executive
officers who is named in the Summary Compensation Table and the potential
realizable value of such options at assumed annual rates of stock price
appreciation for the option term.
OPTION GRANTS IN 1997(1)
INDIVIDUAL GRANTS
----------------------------------------------------
NUMBER OF % OF TOTAL POTENTIAL REALIZABLE VALUE AT
SECURITIES OPTIONS ASSUMED ANNUAL RATES OF STOCK
UNDERLYING GRANTED TO PRICE APPRECIATION FOR OPTION
OPTIONS EMPLOYEES IN EXERCISE OR TERM(3)
GRANTED FISCAL BASE PRICE EXPIRATION ------------------------------
NAME (#) YEAR(2) ($/SH) DATE 0%($) 5%($) 10%($)
---- ---------- ------------ ----------- ---------- ----- --------- ----------
Wayne R. Sanders.......... 180,000 6.3 50.00 2/19/07 0 5,660,052 14,343,682
John W. Donehower......... 48,000 1.7 50.00 2/19/07 0 1,509,347 3,824,982
O. George Everbach........ 48,000 1.7 50.00 2/19/07 0 1,509,347 3,824,982
Thomas J. Falk............ 60,000 2.1 50.00 2/19/07 0 1,886,684 4,781,227
Kathi P. Seifert.......... 48,000 1.7 50.00 2/19/07 0 1,509,347 3,824,982
- ---------------
(1) The plans governing stock option grants provide that the option price per
share shall be no less than 100 percent of the market value per share of the
Corporation's common stock at the date of grant. The term of any option is
no more than 10 years from the date of grant. Options granted in 1997 become
exercisable 30 percent after the first year following the grant thereof, an
additional 30 percent after the second year and the remaining 40 percent
after the third year; provided however, that all such options become
exercisable for three years upon the death, total and permanent disability,
or retirement of the officer and options granted in 1997 under certain
foreign regulations are not exercisable until after three years.
(2) Does not include any of approximately 3,400,000 options and stock
appreciation rights granted to approximately 57,000 employees under the
Kimberly-Clark Corporation Global Stock Option Plan, in which the executive
officers of the Corporation do not participate.
(3) The dollar amounts under these columns are the result of calculations at the
5% and 10% rates set by, and the 0% rate permitted by, Securities and
Exchange Commission rules and are not intended to forecast possible future
appreciation, if any, in the Corporation's stock price.
The table which follows sets forth information (on a post-Stock Split
basis) concerning exercises of stock options during 1997 by each of the
executive officers who is named in the Summary Compensation Table and the value
of each such officer's unexercised options as of December 31, 1997 based on a
closing stock price of $49.3125 per share of the Corporation's common stock on
such date:
AGGREGATED OPTION EXERCISES IN 1997
AND OPTION VALUES AS OF DECEMBER 31, 1997
NUMBER OF VALUE OF
SECURITIES UNEXERCISED
UNDERLYING IN-THE-MONEY
UNEXERCISED OPTIONS AT
OPTIONS AT DECEMBER 31,
DECEMBER 31, 1997 ($)
SHARES ACQUIRED VALUE 1997 (#)
ON EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
---- --------------- --------- -------------- --------------
Wayne R. Sanders......................... 163,372 4,958,071 523,191 11,328,138
525,527 6,273,305
John W. Donehower........................ 0 0 110,027 2,193,799
133,779 1,259,276
O. George Everbach....................... 29,632 888,071 90,175 1,704,298
120,543 932,909
Thomas J. Falk........................... 41,994 1,227,657 125,106 2,527,507
165,630 1,748,752
Kathi P. Seifert......................... 7,610 234,160 122,061 2,654,223
139,631 1,617,526
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The table which follows sets forth information (on a post-Stock Split
basis) concerning grants of participation share awards during 1997 to each of
the executive officers who is named in the Summary Compensation Table and the
estimated future payouts with respect thereto:
LONG-TERM INCENTIVE PLANS - AWARDS IN 1997(1)
PERFORMANCE ESTIMATED FUTURE PAYOUTS UNDER
NUMBER OF OR OTHER NON-STOCK PRICE-BASED PLANS
SHARES, UNITS PERIOD UNTIL ---------------------------------
OR OTHER MATURATION THRESHOLD TARGET MAXIMUM
NAME RIGHTS(#) OR PAYOUT ($) ($)(2) ($)
---- ------------- ------------ --------- --------- -------
Wayne R. Sanders....................... 60,000 5 years N/A 1,606,200 N/A
John W. Donehower...................... 24,000 5 years N/A 642,480 N/A
O. George Everbach..................... 24,000 5 years N/A 642,480 N/A
Thomas J. Falk......................... 30,000 5 years N/A 803,100 N/A
Kathi P. Seifert....................... 24,000 5 years N/A 642,480 N/A
- ---------------
(1) Pursuant to the 1992 Equity Participation Plan (the "1992 Plan") governing
participation shares, each participation share is assigned a base value
equal to the book value of one share of the Corporation's common stock as of
the close of the fiscal year immediately prior to the award. Each share in a
participant's account is assigned a dividend rate equal to the rate declared
on the Corporation's common stock. At the end of each fiscal quarter the
amount of such dividends is determined by multiplying the total cash
dividend declared per share of the Corporation's common stock during such
quarter by the total of the participation shares and dividend shares in the
participant's account. Such amount, when divided by the book value of one
share of the Corporation's common stock at the close of such fiscal quarter,
is the number of dividend shares credited to a participant's account for
such quarter.
However, the plan provides that no dividend shares will be credited to a
participant's account in any quarter in which the total cash dividends per
share of common stock (on a post-Stock Split basis) are (i) less than $.205
or (ii) less than the total cash dividends per share of common stock for the
same quarter of the immediately preceding year. In addition, in any quarter
in which the dividend is less than the dividend for the same quarter of the
preceding year, the book value of the participation shares will be reduced
by the difference in the dividend amounts between the two quarters.
The normal maturity date of a participation share award will be the close of
the fiscal year in which the fifth or seventh anniversary of the date of the
award occurs. Within 90 days after such maturity date, the participant is
entitled to receive a cash payment equal to the sum of (i) the increase (if
any) in book value of the participation shares on the maturity date of the
award over the base value of such shares, and (ii) the book value of the
dividend shares on the maturity date (equal to the book value of an
equivalent number of shares of the Corporation's common stock). In addition,
the 1992 Plan provides that up to 50 percent of the payment of matured
participation share awards may be made in the form of Corporation common
stock as determined by the Compensation Committee when the award is granted.
The book value for purposes of awards made pursuant to the 1992 Plan shall
be adjusted to exclude the effect of stock repurchases and changes in the
Corporation's accounting policies. Further, in the event there are any
changes in the common stock or the capitalization of the Corporation through
a corporate transaction, such as a merger or an acquisition involving the
issuance of common stock, or other changes in the corporate structure of the
Corporation, such as a stock split or stock dividend, appropriate
adjustments shall be made to the number of participation shares, the base
value per participation share awarded to participants, and the number of
dividend shares credited to participants' accounts, to the extent necessary
to preserve the benefit to the participants of awards made under the 1992
Plan.
(2) Under the 1992 Plan, there is no threshold or maximum payout. Based on the
Corporation's 1997 performance, the target amounts assume an 18.7% annual
increase in the book value of the Corporation's common stock (as determined
in accordance with the 1992 Plan) during the term of the award, and a $.01
per share annual increase in the quarterly dividend rate. These assumptions
are not intended to be a forecast of future performance by the Corporation.
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of the Corporation is
composed entirely of Independent Directors. See "Proposal 1. Election of
Directors - General Information." The Board designates the members and the
Chairman of such committee. The Compensation Committee also constitutes the
stock option committee for the stock option plans of the Corporation with
respect to which information regarding stock option grants and exercise
transactions is disclosed in this Proxy Statement. In addition, the Compensation
Committee is responsible for establishing and administering the policies which
govern annual compensation and long-term incentive awards. The Compensation
Committee periodically evaluates the Corporation's compensation programs, and
compares them with those of other companies, both within the Corporation's peer
industry group and other large industrial companies.
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The companies which the Compensation Committee uses for making base salary
comparisons include some, but not all, of the companies appearing in the indexes
of the performance graph below. The first group used for comparison is composed
of 22 companies which have significant consumer businesses (the "Consumer
Company Group"), of which the Corporation is about median in terms of annual
sales and with which the Corporation competes in its businesses and/or for
executive talent. The second group used for comparison is composed of 86
industrial companies with annual sales exceeding $5 billion (the "Industrial
Company Group"), of which the Corporation is about median in terms of annual
sales. Written salary information concerning the compensation practices of these
two groups of companies was provided to the Corporation by two independent
consultants.
In determining the compensation to be paid to executive officers in 1997,
the Compensation Committee employed compensation policies designed to align such
compensation with the Corporation's overall business strategy, values and
management initiatives. Such policies are intended to (i) reward executives for
long-term strategic management and the enhancement of stockholder value through
stock option and long-term incentive awards, (ii) support a performance-oriented
environment that rewards achievement of internal company goals and recognizes
company performance compared to the performance of similarly situated companies
and of other large industrial companies through the annual payment of cash
bonuses, and (iii) attract and retain executives whose abilities are considered
essential to the long-term success and competitiveness of the Corporation
through the Corporation's salary administration program.
Salaries for 1997
In determining base salaries of executive officers, the Compensation
Committee compares the executive officers' salaries to those for similar
positions in the two groups of companies referred to above, with primary
emphasis placed upon the Consumer Company Group so that the Committee may
compare data on specific salary levels for comparable positions. The
Compensation Committee's policy is to set executive officers' salaries at or
near the median salary level of such companies, with the salary of the Chief
Executive Officer set at or near the median salary level for chief executive
officers of the Consumer Company Group. In implementing such policy, the
Compensation Committee also considers the individual performance of the officer,
the performance of the unit over which the officer has responsibility (primarily
based upon growth in the operating profit of such unit, adjusted by a charge for
the capital employed in such unit), the performance of the Corporation
(primarily based upon growth in earnings per share and shareholder return), and
the officer's tenure. No specific weight is assigned to any individual factor.
Salary actions taken by the Compensation Committee with respect to the executive
officers in 1997 were consistent with the policies and practices described
above.
Cash Bonus Awards for 1997
The cash bonus awards for 1997 set forth in the Summary Compensation Table
were based on the Corporation's Management Achievement Award Program. The
Compensation Committee's policy is to provide opportunities to an executive
officer for cash bonuses under such program which, together with his or her base
salary, are within the third quartile (that quartile between the 50th and 75th
percentile) of compensation for the Industrial Company Group if such officer's
goals have been fully met during the year. In determining such target cash bonus
awards, the Compensation Committee places primary emphasis on data for the
Industrial Company Group, as opposed to the Consumer Company Group, because such
data represents the performance based compensation practices of a broadly based
group of companies.
Actual annual cash bonus awards are determined by measuring performance
against specific goals established at the beginning of each year. The goals for
1997 took into account, depending on the responsibility of the individual, the
performance of the group or unit with which the individual is associated
(primarily based upon growth in the operating profit of such unit, adjusted by a
charge
12
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for the capital employed in such unit), and the overall performance of the
Corporation (based upon the Corporation's long-term goal of maintaining growth
in earnings per share from operations (the "EPS Goal") and its long-term goal of
consistently exceeding the S&P 500 index for total shareholder return (the
"Shareholder Return Goal")). An executive officer's goals are designed to
reflect the relationship of his or her responsibilities to the Corporation's EPS
Goal and Shareholder Return Goal. The goals described above may or may not be
equally weighted and will vary from one executive officer to another. The
opportunities for cash bonus awards for the executive officers in 1997 were
consistent with the policies and practices described above.
Based upon comparison of the most recent data provided by the independent
consultants described above, the cash bonuses paid to the named executive
officers, taken together with base salaries, were within the first quartile of
such compensation for comparable officers in the Industrial Company Group.
Participation Shares and Stock Options
The Corporation maintains the 1986 Equity Participation Plan and the 1992
Equity Participation Plan (collectively, the "Equity Plans"), pursuant to which
stock option grants and long-term incentive awards have been made to executive
officers. The Equity Plans are intended to provide a means of encouraging the
acquisition of an ownership interest in the Corporation by employees, including
executive officers, who contribute materially by managerial, scientific or other
innovative means to the success of the Corporation, thereby increasing their
motivation for and interest in the Corporation's long-term success.
The 1986 Equity Participation Plan has expired, and no additional awards
can be made under such plan. However, all awards outstanding on the expiration
date of such Equity Plan remain in full force and effect in accordance with its
terms. Only stock option awards are currently outstanding under the 1986 Equity
Participation Plan.
The number of long-term incentive or stock option awards granted to an
executive officer is based principally on such officer's position and the
compensation practices of the Consumer Company Group. The Compensation
Committee's policy is for the value of such awards, on an annualized basis, to
be within the third quartile with respect to similar awards made by the
companies comprising such group. In implementing such policy, the Compensation
Committee also considers the individual performance of the officer. The
Committee does not determine the size of such grants by reference to the amount
and value of awards currently held by an executive officer. However, the
Compensation Committee takes into account the timing and size of prior grants to
an executive officer. The payout resulting from any long-term incentive or stock
option award is based on the growth in the book value and market value,
respectively, of the Corporation's common stock subsequent to the grant of such
awards.
The 1992 Plan employs book value through the use of participation shares
and dividend shares, each of which, when awarded, is credited to a participant's
memorandum account. For a description of the material terms of participation
share awards pursuant to the 1992 Plan, see note 1 to the table above entitled
"Long-Term Incentive Plans - Awards in 1997."
The Equity Plans also employ market value as a basis for rewarding
performance through the use of tax-qualified and nonqualified stock options. For
a description of the material terms of stock option grants pursuant to the
Equity Plans, see note 1 to the table above entitled "Option Grants in 1997."
1997 Compensation of the Chief Executive Officer
The Compensation Committee reviews and adjusts the Chief Executive
Officer's salary every two years. The Committee increased the compensation of
the Chief Executive Officer in 1997 based on the policies and practices
described above. Based upon comparison of the data provided by the
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independent consultants described above, Mr. Sanders' salary in 1997 was near
the median of salary levels of the chief executive officers of the Consumer
Company Group.
The cash bonus which was paid to Mr. Sanders for 1997 was primarily in
recognition of the progress, as determined by the members of the Board of
Directors who are Independent Directors (see "Proposal 1. Election of
Directors - General Information"), made by the Corporation during the year
toward attaining the Corporation's EPS Goal and Shareholder Return Goal. Because
target levels with respect to these goals were not met during 1997, the bonus
award to Mr. Sanders for 1997 was below the target bonus level. Based upon
comparison of the most recent data provided by the independent consultants
described above, such bonus taken together with Mr. Sanders' base salary, was
within the first quartile of such compensation paid to chief executive officers
of the Industrial Company Group.
The Compensation Committee believes that executive compensation for 1997
adequately reflects its policy to align such compensation with overall business
strategy, values and management initiatives, and to ensure that the
Corporation's goals and performance are consistent with the interests of its
stockholders.
Tax Deduction for Executive Compensation
The Committee has determined that it is not in the stockholders' interests
to modify the Corporation's Management Achievement Award Program plan to enable
the Corporation to meet the requirements of the federal tax code provisions
which limit to $1 million the deductibility of annual cash compensation paid to
any executive officer named in the Summary Compensation Table for corporate
income tax purposes. The Committee believes that it is in the stockholders'
interests for the Committee to retain discretion in the awarding of cash bonuses
to such officers to better ensure that the bonus which is paid to each such
officer reflects the officer's contribution to the achievement of the
Corporation's EPS Goal and Shareholder Return Goal.
However, the Corporation has adopted a deferred compensation plan in
response to such limitations on executive compensation deductibility which
allows each executive officer to defer all salary in excess of $1 million for
any fiscal year. In addition, the deferred compensation plan allows each
executive officer to defer all or a portion of his or her bonus for any fiscal
year. Such plan permits such officers to limit their annual cash compensation to
the $1 million limitation which may be deducted by the Corporation for federal
income tax purposes. Such deferral will result in the possible deduction by the
Corporation of such compensation when paid; however, there is no obligation on
any executive officer to defer any such amounts during any fiscal year. The
Corporation has determined that the impact to the Corporation of being unable to
deduct that portion of the cash bonus paid to such officers which, together with
their annual salary, exceeds $1 million will be minimal. In 1997, the Chief
Executive Officer elected to defer all amounts of his salary and bonus in excess
of $1 million.
Furthermore, in order to maximize the deductibility of the compensation
paid to the Corporation's executive officers, the Corporation's 1992 Equity
Participation Plan, as amended, ensures that compensation resulting from the
exercise of stock options and payments made in connection with participation
share awards will be fully deductible.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Louis E. Levy, Chairman
Pastora San Juan Cafferty
Frank A. McPherson
Randall L. Tobias
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PERFORMANCE GRAPH
Comparison of
Five Year Cumulative Total Return Among
Kimberly-Clark, S&P 500, and Peer Group(1)(2)
The stock price performance shown on the graph below is not necessarily
indicative of future price performance.
TOTAL SHAREHOLDER RETURN
MEASUREMENT PERIOD
(FISCAL YEAR COVERED) KIMBERLY-CLARK S&P 500 PEER GROUP
DEC 92 100.00 100.00 100.00
DEC 93 90.96 110.08 105.27
DEC 94 91.24 111.53 118.64
DEC 95 158.24 153.45 160.61
DEC 96 186.22 188.68 200.91
DEC 97 196.59 251.63 283.10
(1) The companies included in the Peer Group are The Clorox Co.,
Colgate-Palmolive Company, Fort James Corp., Johnson & Johnson, Paragon
Trade Brands, Inc., Pope & Talbot, Inc., The Procter & Gamble Company, The
Unilever Group, Champion International, International Paper Company and Mead
Corp. The Peer Group used in this Proxy Statement includes the same
companies as those included in the Peer Group used in the proxy statement
for the Corporation's prior fiscal year except that Tambrands, Inc.,
included in last year's Peer Group, was acquired by Procter & Gamble in 1997
and James River Corp., included in last year's Peer Group, merged with Fort
Howard Corp. in 1997 forming the entity named Fort James Corp., which is
included in this year's Peer Group.
(2) The graph treats as a special dividend the distribution on November 30, 1995
of one share of common stock of Schweitzer-Mauduit International, Inc. for
every 10 shares of the Corporation's common stock held of record on November
13, 1995.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1997, the following Directors served, and currently are serving, as
members of the Compensation Committee of the Board of Directors of the
Corporation: Louis E. Levy, Chairman; Pastora San Juan Cafferty; and Randall L.
Tobias. In addition, Frank A. McPherson has been serving on the Committee since
April 17, 1997.
Wayne R. Sanders, Chairman of the Board and Chief Executive Officer of the
Corporation, serves as a member of the compensation committee of the board of
directors of Kimberly-Clark de Mexico, S.A. de C.V. Claudio X. Gonzalez,
Chairman of the Board and Managing Director of Kimberly-Clark de Mexico, S.A. de
C.V., serves as a member of the Board of Directors of the Corporation.
Kathi P. Seifert, Group President - North American Personal Care Products
of the Corporation, serves as a member of the board of directors of Eli Lilly
and Company. Randall L. Tobias, Chairman
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of the Board and Chief Executive Officer of Eli Lilly and Company, serves as a
member of the Compensation Committee of the Board of Directors of the
Corporation.
DEFINED BENEFIT RETIREMENT PLAN
The table below illustrates the estimated annual standard pension benefit
payable upon retirement in 1997 at specified compensation levels and years of
service classifications.
PENSION PLAN TABLE
YEARS OF BENEFIT SERVICE
--------------------------------------------------------------------------------
15 20 25 30 35 40 45
REMUNERATION YEARS YEARS YEARS YEARS YEARS YEARS YEARS
------------ -------- -------- -------- -------- ---------- ---------- ----------
$ 200,000............ $ 45,000 $ 60,000 $ 75,000 $ 90,000 $ 105,000 $ 120,000 $ 135,000
400,000........... 90,000 120,000 150,000 180,000 210,000 240,000 270,000
600,000........... 135,000 180,000 225,000 270,000 315,000 360,000 405,000
800,000........... 180,000 240,000 300,000 360,000 420,000 480,000 540,000
1,000,000........... 225,000 300,000 375,000 450,000 525,000 600,000 675,000
1,200,000........... 270,000 360,000 450,000 540,000 630,000 720,000 810,000
1,400,000........... 315,000 420,000 525,000 630,000 735,000 840,000 945,000
1,600,000........... 360,000 480,000 600,000 720,000 840,000 960,000 1,080,000
1,800,000........... 405,000 540,000 675,000 810,000 945,000 1,080,000 1,215,000
2,000,000........... 450,000 600,000 750,000 900,000 1,050,000 1,200,000 1,350,000
2,200,000........... 495,000 660,000 825,000 990,000 1,155,000 1,320,000 1,485,000
The compensation covered by the Corporation's defined benefit plan for
which the above table is provided includes the salary and bonus information set
forth in the Summary Compensation Table. The estimated years of benefit service,
as of normal retirement at age 65, for the executive officers named in the
Summary Compensation Table are: John W. Donehower, 37.0 years; O. George
Everbach, 19.7 years; Thomas J. Falk, 40.0 years; Wayne R. Sanders, 37.1 years;
and Kathi P. Seifert, 36.2 years. Under the plan, an employee is entitled to
receive an annual standard benefit based on years of benefit service and
integrated with social security benefits. Benefits under the plan will be
limited to the extent required by the Internal Revenue Code of 1986, as amended,
with excess benefits over such limitation being paid pursuant to supplemental
plans. While such supplemental plans remain unfunded, in 1994 the Board of
Directors approved the establishment of a trust and authorized the Corporation
to make contributions to such trust in order to provide a source of funds to
assist the Corporation in meeting its liabilities under the plans. Each of the
executive officers named in the Summary Compensation Table is a participant in
such supplemental plans.
Retirement benefits for participants who have at least five years of
vesting service may begin on a reduced basis at age 55, or on an unreduced basis
at normal retirement age. Unreduced benefits also are available for participants
with 10 years of vesting service at age 62 or as early as age 60 with 30 years
of vesting service. The normal form of benefit is a single-life annuity payable
monthly. Benefits will be actuarially adjusted if the employee receives one of
the available forms of joint and survivor or other optional forms of benefit. In
addition, each participant in the supplemental plans has the option of receiving
an actuarially determined lump sum payment upon retirement after age 55 in lieu
of the monthly payments which otherwise would be payable to such participant
under such plans. Further, in the event of a change of control of the
Corporation or a reduction in the Corporation's long-term credit rating below
investment grade, each such participant would have the option of receiving the
present value of his or her accrued benefits in such plans at such time in a
lump sum, reduced by 10% and 5% for active and former employees, respectively.
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EXECUTIVE SEVERANCE PLAN
The Corporation's Executive Severance Plan (the "Executive Severance Plan")
provides that in the event of termination of a participant's employment with the
Corporation for any reason (other than death or disability) within two years
after a change of control of the Corporation, as defined in the plan, the
participant will receive a cash payment in an amount equal to the sum of (i)
three times base salary and the maximum management achievement award, and (ii)
the value of unmatured or unexercised awards or grants and nonvested benefits
under the Corporation's Equity Participation Plans and the Salaried Employees
Incentive Investment Plan and successor plans. The plan also provides for
monthly supplemental retirement benefits equal to those that would have accrued
had employment continued for an additional three years, for certain relocation
costs, and for the continuation of certain other benefits for varying periods of
up to three years. The Board has determined the eligibility criteria for
participation in the plan. A participant ceases to be a participant in the plan
when notified by the Board that it has determined that such participant has
ceased to be a key executive for purposes of the plan. The Corporation has
agreements under the plan with each executive officer who is named in the
Summary Compensation Table.
CORPORATION'S SEVERANCE PAY PLAN
The Corporation's Severance Pay Plan, effective January 1, 1998, generally
provides eligible employees (including the executive officers) a lump sum
severance payment of one week's pay for each year of employment in the event of
involuntary termination without cause. The minimum severance payment is six
week's pay and the maximum is 26 week's pay. Benefits under this plan will not
be paid to an executive officer in the event benefits are payable under the
Executive Severance Plan.
COMPENSATION OF DIRECTORS
Directors who are not officers or employees of the Corporation or any of
its subsidiaries, affiliates or equity companies receive an annual cash retainer
of $30,000 ($25,000 during 1997) payable pro rata quarterly in advance, and a
daily attendance fee of $1,200 per meeting for each day or fraction thereof
spent in attendance at a meeting of the Board or any committee thereof, subject
to a maximum of $3,600 for any day on which more than one such meeting is held.
Pursuant to the Outside Directors' Stock Compensation Plan, such directors also
receive 600 shares of common stock of the Corporation (on a post-Stock Split
basis) on December 31 of each year, and cash dividends and accrued interest
thereon are credited to an account maintained by the Corporation. All of the
shares granted to any such director under such plan, together with all cash
dividends and accrued interest thereon, are restricted and nontransferable
until, and will be delivered to such director free of restrictions upon, his or
her termination of service as a member of the Board. In addition, the
Corporation reimburses such directors for expenses incurred as a result of
attending Board or committee meetings. A director who is an officer or an
employee of the Corporation or any of its subsidiaries, affiliates or equity
companies does not receive any fees for services as a member of the Board or any
committee thereof, but is reimbursed for expenses incurred as a result of such
service.
Under the deferred compensation plan for directors of the Corporation,
directors who are not officers or employees of the Corporation or any of its
subsidiaries, affiliates or equity companies may make an irrevocable election to
defer receipt of all or a portion of their annual cash retainer and meeting fees
for any year. Compensation of a director that is deferred under the plan is
credited either to a cash account or a stock account of such director, as
provided in such election. Amounts allocated to a cash account are converted
into cash credits and will earn additional cash credits quarterly at a rate of
one-fourth of the per annum rate of either six percent or of that equivalent to
the rate paid from time to time on six-month U.S. Treasury Bills, whichever is
higher. Amounts allocated to a stock account are converted into stock credits
equal to the number of shares of
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common stock of the Corporation which could have been purchased with such
amounts. A participant's stock account also is credited with additional stock
credits based on the amount of any dividends that are paid on the Corporation's
common stock. Cash credits and stock credits are converted to and paid in cash
at the time of distribution on the date elected by a participant, and with
respect to stock credits, based on the price of a share of common stock of the
Corporation. Stock credits are not shares of stock, no shares of the
Corporation's common stock are ever distributed to a participant under the plan,
and no participant acquires any rights as a holder of common stock under the
plan. All accounts are distributed in one to 20 annual installments, as elected
by the participant, or upon death.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF
THE FOUR NOMINEES FOR DIRECTOR.
PROPOSAL 2. APPROVAL OF AUDITOR
The Audit Committee of the Board of Directors has selected, and the Board
of Directors has approved, Deloitte & Touche LLP as the principal independent
auditor to audit the financial statements of the Corporation for 1998, subject
to ratification by the stockholders. If the stockholders do not approve the
selection of Deloitte & Touche LLP, the selection of another independent auditor
will be considered by the Audit Committee. Deloitte & Touche LLP has been the
independent auditor for the Corporation since its incorporation in 1928.
Representatives of Deloitte & Touche LLP are expected to be present at the
Annual Meeting with the opportunity to make a statement if they desire to do so,
and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THIS
SELECTION.
1999 STOCKHOLDER PROPOSALS
Proposals by stockholders for inclusion in the Corporation's 1999 Proxy
Statement and form of proxy for the Annual Meeting of Stockholders to be held in
1999 should be addressed to the Secretary, Kimberly-Clark Corporation, P.O. Box
619100, Dallas, Texas 75261-9100, and must be received at such address no later
than November 13, 1998. Upon receipt of any such proposal, the Corporation will
determine whether or not to include such proposal in the Proxy Statement and
proxy in accordance with applicable law. It is suggested that such proposals be
forwarded by certified mail - return receipt requested.
ANNUAL MEETING ADVANCE NOTICE REQUIREMENTS
The Corporation's By-Laws require advance notice for any business to be
brought before a meeting of stockholders. In general, for business to properly
be brought before an annual meeting by a stockholder (other than in connection
with the election of directors; see "Proposal 1. Election of
Directors - Stockholder Nominations for Directors"), written notice of the
stockholder proposal must be received by the Secretary of the Corporation not
less than 75 days nor more than 100 days prior to the first anniversary of the
preceding year's annual meeting. Certain other notice periods are provided if
the date of the annual meeting is advanced by more than 30 days or delayed by
more than 60 days from such anniversary date. The stockholder's notice to the
Secretary must contain a brief description of the business to be brought before
the meeting and the reasons for conducting such business at the meeting, as well
as certain other information. Additional information concerning the advance
notice requirement and a copy of the Corporation's By-Laws may be obtained from
the Secretary of the Corporation at the address provided below.
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OTHER MATTERS
The management of the Corporation knows of no other matters to be presented
at the meeting. Should any other matter requiring a vote of the stockholders
arise at the meeting, the persons named in the proxy will vote the proxies in
accordance with their best judgment.
By order of the Board of Directors.
/s/ DONALD M. CROOK
Donald M. Crook
Vice President and Secretary
KIMBERLY-CLARK CORPORATION
P. O. Box 619100
Dallas, Texas 75261-9100
Telephone (972) 281-1200
March 13, 1998
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[Kimberly Clark Corporation Logo]
Invitation to Stockholders
Notice of 1998 Annual Meeting
Proxy Statement
[GRAPHIC]
24
[LOGO KIMBERLY-CLARK CORPORATION]
KIM26 2
DETACH HERE
[X] PLEASE MARK
YOUR VOTES AS
IN THE EXAMPLE
IT IS NOT NECESSARY TO COMPLETE THE INFORMATION UNDER PROPOSALS 1 AND 2 BELOW
UNLESS YOU CHOOSE TO CAUSE YOUR SHARES TO BE VOTED SEPARATELY ON EACH MATTER TO
BE BROUGHT BEFORE THE ANNUAL MEETING OF STOCKHOLDERS.
----------------------------------------------------------------
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1 AND 2.
----------------------------------------------------------------
FOR AGAINST ABSTAIN
1. Election of Directors 2. Selection of Auditor [ ] [ ] [ ]
NOMINEES: PASTORA SAN JUAN CAFFERTY, CLAUDIO X. GONZALEZ,
LOUIS E. LEVY AND LINDA JOHNSON RICE
(terms to expire at 2001 Annual Meeting of Stockholders)
WITHHOLD
FOR AUTHORITY
all to vote
[ ] nominees [ ] for all
nominees
[ ]
----------------------------------------------------------
FOR ALL NOMINEES, EXCEPT VOTE WITHHELD FOR THOSE NAMED ABOVE.
MARK HERE IF YOU PLAN TO ATTEND MEETING [ ]
MARK HERE FOR ADDRESS CHANGE AND NOTE AT [ ]
LOWER LEFT
I will be accompanied by ___________________________________.
Please sign below exactly as name appears hereon. Joint owners
should each sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as
such. If signing in the name of a corporation or partnership,
please sign full corporate or partnership name and indicate
title of authorized signatory.
Signature: Date: Signature: Date:
--------------------------------- ----------- ----------------------------------- -----------
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KIM26 1 DETACH HERE
[LOGO KIMBERLY-CLARK CORPORATION]
P.O. Box 619100, Dallas, Texas 75261-9100
Proxy for the Annual Meeting of Stockholders - April 30, 1998
Solicited on behalf of the Board of Directors.
Wayne R. Sanders, O. George Everbach and Donald M. Crook, or any of them,
with full power of substitution to each, hereby are appointed proxies and are
authorized to vote, as specified below, all shares of common stock that the
undersigned is entitled to vote at the Annual Meeting of Stockholders of
Kimberly-Clark Corporation, to be held at the Corporation's World Headquarters,
351 Phelps Drive, Irving, Texas on April 30, 1998 at 11:00 a.m. and at any
adjournment thereof. In their discretion, the proxies are authorized to vote on
such other business as may properly come before the meeting.
Please date, sign and return this proxy promptly. If you plan to attend
the meeting, please so indicate in the space provided on the reverse side.
IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR PROPOSALS 1 AND 2. IF
YOU PREFER TO VOTE SEPARATELY ON INDIVIDUAL ISSUES YOU MAY DO SO BY MARKING THE
APPROPRIATE BOXES ON THE REVERSE SIDE.
IMPORTANT: TO BE SIGNED AND DATED ON THE REVERSE SIDE
PLEASE RETURN THIS CARD IN THE SELF-ADDRESSED ENVELOPE PROVIDED.