FORM 10-K
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file number 1-225
KIMBERLY-CLARK CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 39-0394230
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
P. O. Box 619100, Dallas, Texas 75261-9100
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 830-1200
Securities registered pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Common Stock - $1.25 Par Value; Preferred Share New York Stock Exchange
Purchase Rights Chicago Stock Exchange
Pacific Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X . No .
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
and will not be contained, to the best of registrant's
knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [X]
As of March 17, 1995, 160,245,170 shares of common stock were
outstanding, and the aggregate market value of the registrant's
common stock held by nonaffiliates on such date (based on the
closing stock price on the New York Stock Exchange) was
approximately $8,293 million.
Documents Incorporated By Reference
Kimberly-Clark Corporation's 1994 Annual Report to Stockholders
and 1995 Proxy Statement contain much of the information
required in this Form 10-K, and portions of those documents are
incorporated by reference herein from the applicable sections
thereof. The following chart identifies the sections of this
Form 10-K which incorporate by reference portions of the
Corporation's 1994 Annual Report to Stockholders and 1995 Proxy
Statement. The Items of this Form 10-K, where applicable,
specify which portions of such documents are incorporated by
reference. The portions of such documents that are not
incorporated by reference shall not be deemed to be filed with
the Commission as part of this Form 10-K.
Document of Which Portions Items of this Form 10-K
are Incorporated by Reference in Which Incorporated
1994 Annual Report to Stockholders Part I
(Year ended December 31, 1994) Item 1. Business
Item 3. Legal Proceedings
Part II
Item 5. Market for the Registrant's
Common Stock and Related Stockholder
Matters
Item 7. Management's Discussion and
Analysis of Financial Condition and
Results of Operations
Item 8. Financial Statements and
Supplementary Data
Part IV
Item 14. Exhibits, Financial Statement
Schedules, and Reports on Form 8-K
1995 Proxy Statement Part III
Item 10. Directors and Executive
Officers of the Registrant
Item 11. Executive Compensation
Item 12. Security Ownership of
Certain Beneficial Owners and
Management
Item 13. Certain Relationships and
Related Transactions
PART I
ITEM 1. BUSINESS
Kimberly-Clark Corporation was incorporated in Delaware in
1928. As used in Items 1, 2 and 7 of this Form 10-K, the term
"Corporation" refers to Kimberly-Clark Corporation and its
consolidated subsidiaries. In the remainder of this Form 10-
K, the terms "Kimberly-Clark" or "Corporation" refer to
Kimberly-Clark Corporation.
Financial information about product classes and results, and
foreign and domestic operations, and information about
principal products and markets of the Corporation, contained
under the caption "Management's Discussion and Analysis" and in
Note 13 to the Financial Statements contained in the 1994
Annual Report to Stockholders, are incorporated in this Item 1
by reference.
Description of the Corporation. The Corporation is principally
engaged in the manufacturing and marketing throughout the world
of a wide range of products for personal, business and
industrial uses. Most of these products are made from natural
and synthetic fibers using advanced technologies in absorbency,
fibers and nonwovens.
The Corporation's products and services are segmented into
three classes.
Class I includes tissue products for household, commercial,
institutional and industrial uses; infant, child, feminine and
incontinence care products; industrial and commercial wipers;
health care products; and related products. Class I products
are sold under a variety of well-known brand names, including
Kleenex, Huggies, Pull-Ups, GoodNites, Kotex, New Freedom,
Lightdays, Depend, Poise, Hi-Dri, Delsey, Kimguard and
Kimwipes.
Products for home use are sold through supermarkets, mass
merchandisers, drugstores, warehouse clubs, home health care
stores, variety stores, department stores and other retail
outlets, as well as to wholesalers. Other products in this
class are sold to distributors, converters and end-users.
Pulp produced by the Corporation, including amounts sold to
other companies, is included in Class I, except for pulp
manufactured for newsprint and certain specialty papers which
is included in Class II.
Class II includes newsprint, printing papers, premium business
and correspondence papers, tobacco industry papers and
products, technical papers, and related products.
Newsprint and groundwood printing papers are sold directly to
newspaper publishers and commercial printers. Other papers and
specialty products in this class are sold directly to users,
converters, manufacturers, publishers and printers, and through
paper merchants, brokers, sales agents and other resale
agencies.
Class III includes aircraft services, commercial air
transportation and other products and services.
Patents and Trademarks. The Corporation owns various patents
and trademarks registered domestically and in certain foreign
countries. The Corporation considers the patents and
trademarks which it owns and the trademarks under which it
sells certain of its products, in each instance and in the
aggregate, to be material to its business. Consequently, the
Corporation seeks patent and trademark protection by all
available means, including registration. A partial list of the
Corporation's trademarks is included under the caption
"Trademarks" contained in the 1994 Annual Report to
Stockholders and is incorporated herein by reference.
Employees. In its worldwide consolidated operations, the
Corporation had 42,707 employees as of December 31, 1994.
Raw Materials. Cellulose fibers in the form of wood pulp are
the primary raw materials for the Corporation's paper and
tissue products and are important components in disposable
diapers, training pants, feminine pads and incontinence care
products. Certain specialty papers are manufactured with other
cellulose fibers such as flax straw and cotton. Large amounts
of secondary and recycled fibers are also consumed, primarily
in tissue products. Superabsorbent materials are important
components in disposable diapers, training pants and
incontinence care products. Polypropylene and other synthetics
are primary raw materials for manufacturing nonwoven fabrics
which are used in disposable diapers, training pants, feminine
pads, incontinence and health care products and industrial
wipers. Most secondary fibers and all synthetics are
purchased. Wood pulp and nonwood cellulose fibers are produced
by the Corporation and purchased from others. The Corporation
considers the supply of such raw materials to be adequate to
meet the needs of its businesses.
For its worldwide consolidated operations, the Corporation's
pulp mills at Coosa Pines, Alabama, and Terrace Bay, Ontario,
supplied about 70 percent of 1994 wood pulp requirements for
products other than newsprint. The Corporation's newsprint
mill at Coosa Pines produces substantially all of its own
virgin fiber requirements, which represent approximately 80
percent of its total fiber requirements.
The Corporation owns or controls 5.1 million acres of
forestland in North America, primarily as a source of fiber for
pulp production. Approximately .4 million acres are owned
and 4.7 million acres, principally in Canada, are held under
long-term Crown rights or leases.
Certain states have adopted laws and entered into agreements
with publishers requiring newspapers sold in such states to
contain specified amounts of recycled paper. The Corporation
provides certain newspaper publishers with newsprint containing
specified amounts of recycled paper.
Competition. The Corporation competes in numerous domestic and
foreign markets. The number of competitors and the
Corporation's competitive positions in these markets vary. In
general, in the sale of its principal products, the Corpora-
tion faces strong competition from other manufacturers, some of
which are larger and more diversified than the Corporation.
The Corporation has several major competitors in its disposable
diaper and training pants, household and other tissue-based
products, and feminine and incontinence care products
businesses.
Depending on the characteristics of the market involved, the
Corporation competes on the basis of product quality and
performance, price, service, packaging, distribution,
advertising and promotion.
In 1994, a major competitor completed its national introduction
of a branded training pant. The Corporation responded by
entering the private label training pants business and by
launching improved branded training pants and branded
disposable pants for older children who experience nighttime
bed wetting. Similarly in Europe, the Corporation has
encountered significant competition in connection with its
introduction of training pants and diapers.
Research and Development. At year-end 1994, approximately
1,200 of the Corporation's employees were engaged in research
and development activities and were located in Neenah,
Wisconsin; Roswell, Georgia; Coosa Pines, Alabama; Munising,
Michigan; the United Kingdom; Germany; the Netherlands; and
France. A major portion of total research and development
expenditures is directed toward new or improved personal care,
health care and household products, and nonwoven materials.
Consolidated research and development expenditures were $167.1
million in 1994, $158.5 million in 1993 and $156.1 million in
1992.
Environmental Matters. Capital expenditures for environmental
controls to meet legal requirements and otherwise relating to
the protection of the environment at the Corporation's
facilities in the United States are estimated to be $29 million
in 1995 and $28 million in 1996. Such expenditures are not
expected to have a material effect on the Corporation's total
capital expenditures, consolidated earnings or competitive
position; however, these estimates could be modified as a
result of changes in the Corporation's plans, changes in legal
requirements or other factors.
Risks for Foreign Operations. The Corporation and its equity
companies have manufacturing facilities in more than 25
countries throughout the world. Consumer products made abroad
or in the U.S. are marketed in approximately 150 countries.
Because these countries are so numerous, it is not feasible to
generally characterize the risks involved. Such risks vary
from country to country and include such factors as tariffs,
trade restrictions, changes in currency value, economic
conditions and international relations. See "Management's
Discussion and Analysis -- Foreign Currencies Risks, Hedging
Activities and Inflation Risks" contained in the 1994 Annual
Report to Stockholders, which is incorporated herein by
reference.
Insurance. The Corporation maintains coverage consistent with
industry practice for most risks that are incident to its
operations.
ITEM 2. PROPERTIES
Management believes that the Corporation's production
facilities are suitable for their purpose and adequate to
support its businesses. The extent of utilization of
individual facilities varies, but they operate at or near
capacity, except in certain instances where new products or
technology is being introduced. New facilities of the
Corporation are under construction and others are being
expanded. Principal facilities and products or groups of
products made at these facilities are listed on the following
pages. In addition, the principal facilities of the Corporation's
equity companies and the products or groups of products made at
such facilities are included on the following pages. Products
described as consumer, service and/or nonwoven products include
tissue products for household, commercial, institutional and
industrial uses; infant, child, feminine and incontinence care products;
industrial and commercial wipers; health care products; and
related products.
Headquarters Locations
Dallas, Texas
Roswell, Georgia
Neenah, Wisconsin
Administrative Center
Knoxville, Tennessee
Production and Service Facilities
United States
Alabama
Ashville - Wood chips
Coosa Pines - Newsprint, groundwood printing papers, pulp,
seedling nursery
Goodwater - Lumber
Nixburg - Wood chips
Roanoke - Wood chips
Westover - Lumber
Arizona
Tucson - Nonwoven products
Arkansas
Conway - Consumer products
Maumelle - Consumer products
California
Fullerton - Consumer products
Connecticut
New Milford - Consumer products
Shelton - Aviation services
Georgia
LaGrange - Nonwoven materials and products
Massachusetts
Lee - Tobacco industry papers, thin papers, service products
Westfield - Aviation services
Michigan
Munising - Printing and base papers
Mississippi
Corinth - Nonwoven materials, service products
Nebraska
Omaha - Commercial airline service
New Jersey
Montvale - Aviation services
South Hackensack - Aviation services
Spotswood - Tobacco industry papers and products
New York
Ancram - Tobacco industry papers and products
Islip - Aviation services
North Carolina
Hendersonville - Nonwoven materials and products
Lexington - Nonwoven materials and products
Oklahoma
Jenks - Consumer products
South Carolina
Beech Island - Consumer and service products
Tennessee
Loudon - Service products
Texas
Dallas - Aviation services
Paris - Consumer products
Waco - Administrative services
Utah
Ogden - Consumer products
Wisconsin
Appleton - Aviation services
Milwaukee - Commercial airline service
Neenah - Consumer and service products, nonwoven materials,
business and correspondence papers
Whiting - Business and correspondence papers
Outside the United States
Argentina
*Cordoba - Consumer products
*Pilar - Consumer products
*San Luis - Consumer products
Australia
*Albury - Nonwoven materials and products
*Ingleburn (near Sydney) - Consumer products
*Lonsdale (near Adelaide) - Consumer products
*Millicent - Consumer and service products
*Seven Hills (near Sydney) - Consumer and service products
*Tantanoola - Pulp
*Warwick Farm (near Sydney) - Consumer and service products
Bahrain
*East Riffa - Consumer products
Canada
Huntsville, Ontario - Consumer and service products
Rexdale, Ontario (near Toronto) - Consumer and service
products
St. Catharines, Ontario - Consumer and service products,
base papers
St. Hyacinthe, Quebec - Consumer products
Terrace Bay, Ontario - Pulp
Winkler, Manitoba (mobile operations) - Flax tow
China
Beijing - Consumer products
Changchun - Consumer products
Chengdu - Consumer products
Guiyang - Consumer products
Handan - Consumer products
Harbin - Consumer products
Kunming - Consumer products
Nanjing - Consumer products
Shenyang - Consumer products
Taiyuan - Consumer products
Colombia
*Barbosa (near Medellin) - Tobacco industry papers, service
products
*Guarne (near Medellin) - Consumer and service products
*Pereira - Consumer and service products, nonwoven materials
*Tocancipa (near Bogota - under construction) - Consumer
products
Costa Rica
Cartago - Consumer products
El Salvador
Sitio del Ni~no (near San Salvador) - Consumer and
service products
France
Le Mans - Tobacco industry products
Malaucene - Tobacco industry papers
Quimperle - Tobacco industry papers
Rouen - Consumer products
Villey-Saint-Etienne - Consumer and service products
Germany
Koblenz - Consumer and service products
Forchheim - Consumer products
Honduras
Cortes - Nonwoven products
San Pedro Sula - Nonwovens products
India
*Pune (near Bombay - under construction) - Consumer products
Indonesia
*Medan - Tobacco industry papers
Korea
Anyang (near Seoul) - Consumer and service products
Kimcheon (near Taegu) - Consumer and service products
Taejon - Consumer products
Malaysia
*Petaling Jaya (near Kuala Lumpur) - Consumer and service
products
Mexico
*Bajio (near San Juan del Rio) - Consumer and service
products; business, printing and school papers
*Cuautitlan (near Mexico City) - Consumer and service
products
Empalme - Nonwoven products
Hermosillo - Nonwoven products
Magdalena - Nonwoven products
*Naucalpan (near Mexico City) - Consumer and service
products; business, printing and school papers;
tobacco industry papers; pulp
Nogales - Nonwoven products
*Orizaba - Consumer and service products; business, printing
and school papers; pulp
*Ramos Arizpe - Consumer products
Santa Ana - Nonwoven products
*Tlaxcala (under construction) - Consumer products
Netherlands
Veenendaal - Consumer and service products
Panama
Panama City - Consumer and service products
Philippines
San Pedro, Laguna (near Manila) - Consumer and service
products, tobacco industry papers
Saudi Arabia
*Al-Khobar - Consumer and service products
Singapore
Singapore - Consumer and service products
South Africa
*Cape Town - Consumer and service products
*Istar - Consumer and service products
*Springs (near Johannesburg) - Consumer and service products
*Wadeville - Consumer and service products
Thailand
Patumthanee (near Bangkok) - Consumer and service products
United Kingdom
Barton-upon-Humber - Consumer products
Flint - Nonwoven materials, service products
Larkfield (near Maidstone) - Consumer and service products
Prudhoe (near Newcastle-upon-Tyne) - Consumer and service
products, recycled fiber
Sealand (near Chester) - Consumer products
Venezuela
Guacara - Consumer products
* Equity company production facility
ITEM 3. LEGAL PROCEEDINGS
The following is a brief description of potentially material
legal proceedings to which the Corporation or any of its
subsidiaries is a party or of which any of their properties is
subject:
Litigation
A. On September 20, 1994, the Attorney General of the State of
West Virginia filed an action against several tobacco
companies, industry trade associations and consultants,
tobacco wholesalers and cigarette component manufacturers,
including the Corporation, seeking to recover monies which
West Virginia allegedly has spent and will spend in
providing medical care for its citizens whose illnesses are
alleged to be tobacco-related. The lawsuit, filed in the
Circuit Court of Kanawha County, West Virginia, seeks actual
and punitive damages in an unspecified amount. Among other things,
the complaint alleges that the Corporation aided, abetted and
participated in the manufacture of cigarettes by supplying
reconstituted tobacco sheets to the tobacco company
defendants and advertising that the use of such sheets would
allow the tobacco companies to manipulate the level of
nicotine in their cigarettes. The Corporation has moved to
dismiss the complaint on several grounds including the
Attorney General's lack of authority to bring suit in his
own name on behalf of the State of West Virginia. The
Corporation believes that the Attorney General's claims are
without merit.
B. Since September 28, 1990, numerous lawsuits currently
consolidated into five actions in state and federal courts
have been filed against numerous defendants, including the
Corporation, by over 6,000 plaintiffs of whom about 272
claim to have worked at the Corporation's Coosa Pines, Ala.
mill as employees of independent contractors at various
times since the mill's construction. The plaintiffs allege,
with respect to the Corporation, that they sustained
personal injuries and/or emotional distress from alleged
exposure to asbestos-containing materials while working at
the mill. The complaints do not specify the amount of
damages demanded. The Corporation believes the claims are
without merit.
The parties to four of these actions have reached tentative
oral agreement in principle to settle; however, no written
settlement agreement has yet been signed. Pursuant to this
agreement in principle, all pending claims in these four actions
would be dismissed. The amount expected to be paid by the
Corporation is not expected to be material. Since these
actions are not part of a mandatory class action, there
remains the possibility that similar additional suits may be
filed against the Corporation.
The Corporation also is subject to routine litigation from time
to time which individually or in the aggregate is not expected
to have a material adverse effect on the Corporation's business
or results of operations.
Environmental Matters
(See the Corporation's 1994 Annual Report to Stockholders under
the "Environmental Matters" section of "Management's Discussion
and Analysis.")
The Corporation has been named a potentially responsible party
("PRP") under the provisions of the federal Comprehensive
Environmental Response, Compensation and Liability Act
("CERCLA"), or analogous state statute, at 28 waste disposal
sites, none of which, in management's opinion, could have a
material adverse impact on the Corporation's business or
results of operations. Notwithstanding its opinion, management
believes it appropriate to disclose the following recent
developments concerning seven of these sites where the extent
of the Corporation's liability cannot yet be established:
A. The South 8th Street Landfill Site, located across the
Mississippi River from Memphis, Tennessee, in Crittenden
County, Arkansas, is a 30-acre site that received municipal
and industrial waste from the 1950's to the early 1980's.
The site is divided into three separate landfill disposal
areas and an oily sludge pit area. A refining company (the
"Refiner") apparently used the pit area for the disposal of
waste sludge from its oil re-refining process through
November 1969.
On September 9, 1992, the Environmental Protection Agency
(the "EPA") identified Kimberly-Clark's former Memphis
facility as a PRP at the site. The mill was linked to the
site by an affidavit of an employee of the Refiner which
alleged that the Refiner picked up waste oil at the mill for
re-refining. While Kimberly-Clark did not send hazardous
wastes to the site, it did send used oil to the Refiner for
reclamation.
Remediation of the site is being conducted in two phases.
The Record of Decision for the source control phase, which
identifies the selected remedy for the oily sludge pit and
landfill areas of the site, was issued by EPA in November
1994. The Remedial Design for the source control phase and
the Remedial Investigation and Feasibility Study for the
groundwater phase have not yet commenced. There are
approximately 103 companies, including Kimberly-Clark,
participating in the PRP group. The Corporation's estimated
share of the total site remediation cost, if any, cannot yet
be established.
B. In August 1992, Kimberly-Clark's Spotswood, New Jersey mill
received an information request from the New Jersey
Department of Environmental Protection and Energy ("NJDEPE")
with respect to the Jones Industrial Service Landfill.
Kimberly-Clark does not have internal records indicating
that the mill used the site. However, the Spotswood mill
received routing sheets from a nonhazardous waste disposal
transporter used by the mill which indicate that the
transporter may have sent three loads of Spotswood mill
waste to the site in September 1980. The public comment
period on the Proposed Plan of Remediation ended on December
28, 1994. No decision on remedial action will be made until
all public comments are evaluated. NJDEPE has made no
projections on when the Record of Decision will be issued.
Until Kimberly-Clark receives the site information it has
requested from the State of New Jersey, no determination
regarding the extent of Kimberly-Clark's liability, if any,
can be made.
C. On February 6, 1991, the NJDEPE identified the Corporation
as a PRP under the provisions of the New Jersey Spill
Compensation and Control Act for remediation of the Global
Sanitary Landfill waste disposal site located in Old Bridge
Township, New Jersey based on the Corporation's disposal of
waste at such site. The EPA has designated the disposal
site as a state-led site under CERCLA with the NJDEPE acting
as lead agency. In May 1991, the Corporation signed a PRP
agreement and paid an administrative assessment. In August
1993, a consent decree was executed by the State
of New Jersey and the PRPs, pursuant to which the
Corporation agreed to pay $575,000 for its share of Phase I
cleanup costs. The Corporation's share of Phase II cleanup
costs cannot yet be established.
D. On March 14, 1994, the Corporation received from the EPA an
information request regarding the Purity Oil Sales Superfund
Site in Malaga, California. The EPA asserts that the
Corporation's former facility in Anderson, California
arranged for the disposal, treatment or transportation of
waste oil and/or solvents to the site. The Corporation does
not have records indicating that the facility used the site.
The Corporation's estimated share of the total site
remediation cost, if any, cannot be established on the basis
of currently available information.
E. On April 11, 1994, the Corporation received a special notice
letter and information request from the Wisconsin Department
of Natural Resources ("WDNR") regarding the Marina Cliffs
Barrel Dump Site in Milwaukee, Wisconsin. The WDNR asserts
that the Corporation disposed of drums at the site. The
Corporation does not have records indicating that any of its
Wisconsin facilities used the site. The Corporation's
estimated share of the total site remediation cost, if any,
cannot be established on the basis of currently available
information.
F. On September 12, 1994, the Corporation received a special
notice letter and information request from the California
Department of Toxic Substances Control ("DTSC") regarding
the Omega Chemical Company Site in Whittier, California.
The DTSC asserts that the Corporation's facility in
Fullerton, California arranged for the disposal, treatment
or transportation of hazardous substances to the site. The
Corporation has determined that primarily nonhazardous
substances generated by the facility were transported to the
site. The Corporation's estimated share of the total site
remediation cost, if any, cannot be established on the basis
of currently available information.
G. On October 27, 1994, the Corporation received an information
request regarding the Manistique River/Harbor Area of
Concern in Manistique, Michigan. The EPA is investigating
the source, extent and nature of the release of hazardous
substances in the vicinity of the Manistique River/Harbor
and believes that the Corporation's facility in Munising,
Michigan may have arranged for the disposal, treatment or
transportation of hazardous substances to the area. The
Corporation has determined that no hazardous substances
generated by any of its facilities were transported to the
area and, therefore, the Corporation should not be liable
for cleanup costs in the area.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders during
the fourth quarter of 1994.
EXECUTIVE OFFICERS OF THE REGISTRANT
The names and ages of the executive officers of the Corporation
as of March 1, 1995, together with certain biographical
information, are as follows:
John W. Donehower, 48, was elected Senior Vice President and
Chief Financial Officer in 1993. Mr. Donehower joined
Kimberly-Clark in 1974. He was appointed Director of Finance -
Europe in 1978, Vice President, Marketing and Sales -
Nonwovens in 1981, Vice President, Specialty Papers in 1982,
Managing Director, Kimberly-Clark Australia Pty. Limited in
1982, and Vice President, Professional Health Care, Medical and
Nonwoven Fabrics in 1985. He was appointed President,
Specialty Products - U.S. in 1987, and President - World
Support Group in 1990.
O. George Everbach, 56, was elected Senior Vice President - Law
and Government Affairs in 1988. Mr. Everbach joined Kimberly-
Clark in 1984. His responsibilities within the Corporation
have included direction of legal, human resources and
administrative functions. He was elected Vice President and
General Counsel in 1984; Vice President, Secretary and General
Counsel in 1985; and Senior Vice President and General Counsel
in 1986.
Thomas J. Falk, 36, was elected Group President - North
American Consumer Products effective January 1, 1995. He is
responsible for the Infant and Child Care Sectors, and the U.S.
Consumer Sales and Consumer Business Services organizations.
Mr. Falk joined Kimberly-Clark in 1983. His responsibilities
within the Corporation have included internal audit, financial
and strategic analysis, and operations management. Mr. Falk
was appointed Vice President - Operations Analysis and Control
in 1990. He was elected Senior Vice President -Analysis and
Administration in 1992 and Group President - Infant and Child
Care in 1993.
James G. Grosklaus, 59, was elected Executive Vice President
effective December 1, 1990. He is responsible for the Pulp and
Newsprint, Paper and Specialty Products and Service and
Industrial Sectors, and also is responsible for various staff
functions. Employed by the Corporation since 1957, Mr.
Grosklaus was appointed Vice President in 1972 and Divisional
Vice President in 1975, and was elected Senior Vice President
effective January 1, 1979. He was appointed President, K-C
Health Care, Nonwoven and Industrial Group in 1981, Senior
Staff Vice President in 1982, Senior Vice President in 1983 and
President, Technical Paper and Specialty Products in 1985, and
elected Executive Vice President in January 1986. In 1988, he
was appointed President - North American Pulp and Paper Sector.
He is a member of the Emory University Dean's Advisory Council
and the Woodruff Arts Center Board of Trustees. He has been a
director of the Corporation since 1987.
Timothy E. Hoeksema, 48, was appointed President -
Transportation Sector in 1988. Mr. Hoeksema joined Kimberly-
Clark in 1969. Prior to 1977, Mr. Hoeksema served as Chief
Pilot of Kimberly-Clark. He was elected President of K-C
Aviation Inc., a wholly owned subsidiary of Kimberly-Clark, in
1977, and President of Midwest Express Airlines, Inc., a wholly
owned subsidiary of K-C Aviation Inc., in 1983.
James T. McCauley, 56, was elected Executive Vice President in
1990. Mr. McCauley joined Kimberly-Clark in 1969. He was
elected Vice President and Treasurer in 1980. Mr. McCauley was
appointed Vice President - Nonwoven Operations in 1984, Senior
Vice President, Kimberly-Clark Newsprint & Pulp and Forest
Products in 1984, President, North American Pulp and Newsprint
Sector in 1985, President, Health Care and Nonwovens Sector in
1987, and President - Nonwovens and Technical Products Sector
in 1988. He was appointed President - Nonwovens, Medical and
Technical Products Sector in 1988 and President - Nonwovens and
Professional Health Care Sector, Far East Operations and World
Support Group in 1990.
Wayne R. Sanders, 47, was elected Chief Executive Officer of
the Corporation effective December 19, 1991, and Chairman of
the Board of the Corporation effective March 31, 1992. He
previously had been elected President and Chief Operating
Officer in December 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 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 and Texas Commerce
Bank, National Association, and is a member of the Marquette
University Board of Trustees. He has been a director of the
Corporation since 1989.
Kathi P. Seifert, 45, was elected Group President - North
American Consumer Products effective January 1, 1995. She is
responsible for the Household Products and Feminine and Adult
Care Sectors, and the Safety and Quality Assurance and Canadian
Sales organizations. Ms. Seifert joined Kimberly-Clark in
1978. Her responsibilities in the Corporation have included
various marketing positions within the Service and Industrial,
Consumer Tissue and Feminine Products business sectors. She
was appointed President - Feminine Care Sector in 1991 and was
elected Group President - Feminine and Adult Care in 1994.
Ms. Seifert is a member of the Board of Directors for Aid
Association for Lutherans.
John A. Van Steenberg, 47, was elected President - European
Consumer and Service & Industrial Operations effective January
1, 1994. Mr. Van Steenberg joined Kimberly-Clark in 1978. His
responsibilities have included operations and major project
management in North America. He was appointed Managing
Director of Kimberly-Clark Australia Pty. Limited in 1990.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED
STOCKHOLDER MATTERS
The dividend and market price data included in Note 12 to the
Financial Statements, and the information set forth under the
captions "Dividends and Dividend Reinvestment Plan" and "Stock
Exchanges" contained in the 1994 Annual Report to Stockholders
are incorporated in this Item 5 by reference.
As of March 17, 1995, the Corporation had 25,623 stockholders of
record.
ITEM 6. SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
(Millions of dollars Year Ended December 31
except per share amounts) 1994 1993 1992 1991 1990
---------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net Sales ................. $7,364.2 $6,972.9 $7,091.1 $6,776.9 $6,407.3
Restructuring Charge (3)... -- -- 250.0 -- --
Operating Profit .......... 819.1 793.5 543.1 741.8 753.6
Share of Net Income of
Equity Companies (1)...... 87.1 98.0 82.9 72.8 58.2
Income Before Cumulative
Effects of Accounting
Changes .................. 535.1 510.9 345.0 508.3 432.1
Net Income (1)(2)(3)(4)(5) 535.1 510.9 135.0 508.3 432.1
Per Share Basis:
Income Before Cumulative
Effects of Accounting
Changes ................. 3.33 3.18 2.15 3.18 2.70
Net Income (1)(2)(3)(4)(5) 3.33 3.18 .84 3.18 2.70
Cash Dividends Declared... 1.76 1.29 2.07 1.52 1.36
Cash Dividends Paid ...... 1.75 1.70 1.64 1.45 1.35
Total Assets .............. 6,715.7 6,380.7 6,029.1 5,704.8 5,283.9
Long-Term Debt ............ 929.5 933.1 994.6 874.7 728.5
Stockholders' Equity ...... 2,595.8 2,457.2 2,191.1 2,519.7 2,259.7
</TABLE>
(1) Share of net income of equity companies and net income for
1994 include a nonoperating charge of $39.2 million ($.24
per share) for foreign currency losses incurred by the
Corporation's 43 percent-owned Mexican affiliate on the
translation of U.S. dollar-denominated liabilities into
pesos. The translation losses are related to the
devaluation of the Mexican peso in December 1994.
(2) The enactment of the 1993 Tax Act increased deferred income
taxes related to prior years, which reduced 1993 net income
$8.8 million ($.05 per share).
(3) Results for 1992 include a pretax charge of $250.0 million
or $172.0 million after-tax ($1.07 per share) related to the
restructuring of the consumer and service products
operations in Europe and certain operations in North
America.
(4) Net income for 1992 includes net after-tax charges of $210.0
million ($1.31 per share) for the cumulative effects of
adopting the required accounting rules for postretirement
health care and life insurance benefits and for income
taxes.
(5) Net income for 1991 and 1990 includes a favorable adjustment
of $20.0 million ($.13 per share) and a charge of $44.0
million ($.28 per share), respectively, related to the
disposition of a former 50.5-percent-owned Canadian
newsprint subsidiary.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The information set forth under the caption "Management's
Discussion and Analysis" contained in the 1994 Annual Report to
Stockholders is incorporated in this Item 7 by reference.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The financial statements of the Corporation and its
consolidated subsidiaries and the independent auditors' report
thereon contained in the 1994 Annual Report to Stockholders are
incorporated in this Item 8 by reference.
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE
None.
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The section of the 1995 Proxy Statement captioned "Certain
Information Regarding Directors and Nominees" under "Proposal
1. Election of Directors" identifies members of the board of
directors of the Corporation and nominees, and is incorporated
in this Item 10 by reference.
See also "EXECUTIVE OFFICERS OF THE REGISTRANT" appearing in
Part I hereof.
ITEM 11. EXECUTIVE COMPENSATION
The information in the section of the 1995 Proxy Statement
captioned "Executive Compensation" under "Proposal 1. Election
of Directors" is incorporated in this Item 11 by reference.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The information in the sections of the 1995 Proxy Statement
captioned "Security Ownership of Management" and "Other
Principal Holder of Voting Securities" under "Proposal 1.
Election of Directors" is incorporated in this Item 12 by
reference.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The information in the sections captioned "Certain Transactions
and Business Relationships" and "Executive Compensation --
Compensation Committee Interlocks and Insider Participation"
under "Proposal 1. Election of Directors" of the 1995 Proxy
Statement is incorporated in this Item 13 by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS
ON FORM 8-K
(a) Documents filed as part of this report.
1. Financial statements:
The Consolidated Balance Sheet as of December 31, 1994 and
1993, and the related Consolidated Income Statement and
Consolidated Cash Flow Statement for the years ended December
31, 1994, 1993 and 1992, and the related Notes thereto, and the
Independent Auditors' Report thereon are incorporated in Part
II, Item 8 of this Form 10-K by reference to the financial
statements contained in the 1994 Annual Report to Stockholders.
2. Financial statement schedules:
The following information is filed as part of this Form 10-K
and should be read in conjunction with the financial statements
contained in the 1994 Annual Report to Stockholders.
Independent Auditors' Report
Schedules for Kimberly-Clark Corporation and Subsidiaries:
II Valuation and Qualifying Accounts
All other schedules have been omitted because they were not
applicable or because the required information has been
included in the financial statements or notes thereto.
3. Exhibits:
Exhibit No. (3)a. Restated Certificate of Incorporation of
Kimberly-Clark Corporation, dated April 16, 1987, incorporated
by reference to Exhibit No. (4)e of the Kimberly-Clark Corporation
Form S-8 filed on February 16, 1993 (File No. 33-58402).
Exhibit No. (3)b. By-Laws of Kimberly-Clark Corporation, as
amended April 22, 1993, incorporated by reference to Exhibit No. (3) of
the Kimberly-Clark Corporation Form 10-Q for the quarterly
period ended June 30, 1993.
Exhibit No. (4). Copies of instruments defining the rights of
holders of long-term debt will be furnished to the Securities
and Exchange Commission on request.
Exhibit No. (10)a. Kimberly-Clark Corporation 1976 Equity
Participation Plan, as amended effective December 19, 1991.
Exhibit No. (10)b. Kimberly-Clark Corporation Management
Achievement Award Program, as amended as of January 1, 1993.
Exhibit No. (10)c. Kimberly-Clark Corporation Executive
Severance Plan, incorporated by reference to Exhibit No. (10)c
of the Kimberly-Clark Corporation Form 10-K for the year ended
December 31, 1992.
Exhibit No. (10)d. Second Amended and Restated Deferred
Compensation Plan for Directors of Kimberly-Clark Corporation,
incorporated by reference to Exhibit No. (10)d of the
Kimberly-Clark Corporation Form 10-K for the year ended
December 31, 1992.
Exhibit No. (10)e. Kimberly-Clark Corporation 1986 Equity
Participation Plan, as amended effective February 11, 1993.
Exhibit No. (10)f. Kimberly-Clark Corporation 1992 Equity
Participation Plan, as amended effective February 11, 1993.
Exhibit No. (10)g. Kimberly-Clark Corporation Deferred
Compensation Plan, effective as of October 1, 1994.
Exhibit No. (11). The net income per share of common stock
computations for each of the periods included in Part II, Item
6 of this Form 10-K are based on average common shares out-
standing during each of the respective periods. The only
"common stock equivalents" or other potentially dilutive
securities or agreements (as defined in Accounting Principles
Board Opinion No. 15) in Kimberly-Clark Corporation's capital
structure during the periods presented were options outstanding
under its Equity Participation Plans.
Computations of "primary" and "fully diluted" net income per
share assume the exercise of outstanding stock options under
the "treasury stock method." The table below presents the
amounts by which the earnings per share amounts presented in
Part II, Item 6 would be reduced if the "treasury stock method"
had been used.
Primary Fully Diluted
1994 $.01 $.01
1993 .01 .01
1992 - -
1991 .02 .02
1990 .01 .01
Exhibit No. (12). Computation of ratio of earnings to fixed
charges for the five years ended December 31, 1994.
Exhibit No. (13). Portions of the Kimberly-Clark Corporation
1994 Annual Report to Stockholders incorporated by reference in
this Form 10-K.
Exhibit No. (21). Consolidated Subsidiaries and Equity
Companies of Kimberly-Clark Corporation are identified in the
Kimberly-Clark Corporation 1994 Annual Report to Stockholders,
and such information is incorporated in this Form 10-K by
reference.
Exhibit No. (23). Independent Auditors' Consent.
Exhibit No. (24). Powers of Attorney.
Exhibit No. (27). The Financial Data Schedule required by Item
601(b)(27) of Regulation S-K has been included with the
electronic filing of this Form 10-K.
(b) Reports on Form 8-K
(i) The Corporation filed a Current Report on Form 8-K dated
December 13, 1994, which reported the results of a meeting
between senior management of the Corporation and certain
securities analysts and investors.
(ii) The Corporation filed a Current Report on Form
8-K dated January 9, 1995, which reported a
nonoperating charge attributable to the
devaluation of the Mexican peso.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Kimberly-Clark Corporation
March 24, 1995
By: /s/ John W. Donehower
John W. Donehower
Senior Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following
persons on behalf of the registrant and in the capacities and
on the dates indicated.
/s/ Wayne R. Sanders Chairman of the Board March 24, 1995
Wayne R. Sanders and Chief Executive Officer
and Director
/s/ John W. Donehower Senior Vice President and March 24, 1995
John W. Donehower Chief Financial Officer
/s/ Randy J. Vest Vice President and March 24, 1995
Randy J. Vest Controller (principal
accounting officer)
Directors
John F. Bergstrom Louis E. Levy
Pastora San Juan Cafferty Frank A. McPherson
Paul J. Collins Wolfgang R. Schmitt
Claudio X. Gonzalez Randall L. Tobias
James G. Grosklaus H. Blair White
By: /s/ O. George Everbach March 24, 1995
O. George Everbach, Attorney-in-Fact
INDEPENDENT AUDITORS' REPORT
Kimberly-Clark Corporation:
We have audited the consolidated financial statements of
Kimberly-Clark Corporation as of December 31, 1994 and 1993,
and for each of the three years in the period ended December
31, 1994, and have issued our report thereon dated January 27,
1995, which report includes an explanatory paragraph concerning
the Corporation's changes during 1992 in its methods of
accounting for income taxes and postretirement benefits other
than pensions to conform with Statements of Financial
Accounting Standards No. 109 and No. 106, respectively; such
consolidated financial statements and report are included in
your 1994 Annual Report and are incorporated herein by
reference. Our audits also included the consolidated financial
statement schedule of Kimberly-Clark Corporation, listed in
Item 14. This consolidated financial statement schedule is the
responsibility of the Corporation's management. Our
responsibility is to express an opinion based on our audits.
In our opinion, such consolidated financial statement schedule,
when considered in relation to the basic consolidated financial
statements taken as a whole, presents fairly in all material
respects the information set forth therein.
DELOITTE & TOUCHE LLP
Dallas, Texas
January 27, 1995
<TABLE>
<CAPTION>
SCHEDULE II Kimberly-Clark Corporation and Subsidiaries
VALUATION AND QUALIFYING ACCOUNTS
FOR THE YEARS ENDED DECEMBER 31, 1994, 1993 AND 1992
(Millions of dollars)
Additions Deductions
Balance at Charged to Charged to Write-Offs Balance at
Beginning Costs and Other and Discounts End of
Description of Period Expenses Accounts(a) Allowed Period
<S> <C> <C> <C> <C> <C>
December 31, 1994
Allowances deducted from
assets to which they apply
Allowances for doubtful
accounts ......... $ 8.0 $ 4.3 $.1 $ 3.3(b) $ 9.1
Allowances for sales
discounts ........ 6.8 101.4 - 99.8(c) 8.4
Total .......... $14.8 $105.7 $.1 $103.1 $17.5
December 31, 1993
Allowances deducted from
assets to which they apply
Allowances for doubtful
accounts ......... $10.2 $ 5.4 $.2 $ 7.8(b) $ 8.0
Allowances for sales
discounts ........ 7.1 97.0 - 97.3(c) 6.8
Total .......... $17.3 $102.4 $.2 $105.1 $14.8
December 31, 1992
Allowances deducted from
assets to which they apply
Allowances for doubtful
accounts ......... $ 8.2 $ 4.5 $.2 $ 2.7(b) $10.2
Allowances for sales
discounts ........ 5.8 96.7 - 95.4(c) 7.1
Total .......... $14.0 $101.2 $.2 $ 98.1 $17.3
(a) Primarily bad debt recoveries
(b) Primarily uncollectible receivables written off
(c) Sales discounts allowed
</TABLE>
Index to Documents Filed as a Part of This Report
Description
Consolidated financial statements, incorporated by reference
Independent Auditors' Report, incorporated by reference
Independent Auditors' Report
Schedules for Kimberly-Clark Corporation and Subsidiaries:
II Valuation and Qualifying Accounts
Exhibit No. (3)a. Restated Certificate of Incorporation of Kimberly-Clark
Corporation, dated April 16, 1987, incorporated by reference to Exhibit
No. (4)e of the Kimberly-Clark Corporation Form S-8 filed on
February 16, 1993 (File No. 33-58402)
Exhibit No. (3)b. By-Laws of Kimberly-Clark Corporation, as amended
April 22, 1993, incorporated by reference to Exhibit No. (3) of the
Kimberly-Clark Corporation Form 10-Q for the quarterly period ended
June 30, 1993
Exhibit No. (4). Copies of instruments defining the rights of holders of
long-term debt will be furnished to the Securities and Exchange Commission
on request
Exhibit No. (10)a. Kimberly-Clark Corporation 1976 Equity Participation Plan,
as amended effective December 19, 1991
Exhibit No. (10)b. Kimberly-Clark Corporation Management Achievement Award
Program, as amended as of January 1, 1993
Exhibit No. (10)c. Kimberly-Clark Corporation Executive Severance Plan,
incorporated by reference to Exhibit No. (10)c of the Kimberly-Clark
Corporation Form 10-K for the year ended December 31, 1992
Exhibit No. (10)d. Second Amended and Restated Deferred Compensation Plan for
Directors of Kimberly-Clark Corporation, incorporated by reference to
Exhibit No. (10)d of the Kimberly-Clark Corporation Form 10-K for the
year ended December 31, 1992
Exhibit No. (10)e. Kimberly-Clark Corporation 1986 Equity Participation Plan,
as amended effective February 11, 1993
Exhibit No. (10)f. Kimberly-Clark Corporation 1992 Equity Participation Plan,
as amended effective February 11, 1993
Exhibit No. (10)g. Kimberly-Clark Corporation Deferred Compensation
Plan, effective as of October 1, 1994
Exhibit No. (11). Statement re: computation of earnings per share
Exhibit No. (12). Computation of ratio of earnings to fixed charges
for the five years ended December 31, 1994
Exhibit No. (13). Portions of the Kimberly-Clark Corporation 1994 Annual
Report to Stockholders incorporated by reference in this Form 10-K
Exhibit No. (21). Consolidated Subsidiaries and Equity Companies of
Kimberly-Clark Corporation are identified in the Kimberly-Clark Corporation
1994 Annual Report to Stockholders, and such information is
incorporated in this Form 10-K by reference
Exhibit No. (23). Independent Auditors' Consent
Exhibit No. (24). Powers of Attorney
Exhibit No. (27). The Financial Data Schedule required by Item 601(b)(27) of
Regulation S-K has been included with the electronic filing of this
Form 10-K.
KIMBERLY-CLARK CORPORATION
1976 EQUITY PARTICIPATION PLAN
(as amended as of December 19, 1991)
1. PURPOSE
This 1976 Equity Participation Plan (the "Plan") of
Kimberly-Clark Corporation (the "Corporation") is intended to
provide a means of encouraging the acquisition of an ownership
interest in the Corporation by those employees who contribute
materially by managerial, scientific, or other innovative means
to the success of the Corporation, a consolidated subsidiary or
an equity company ("Subsidiaries"), thereby increasing their
motivation for an interest in the Corporation's or
Subsidiaries' long-term success.
2. EFFECTIVE DATE
The Plan became effective as of April 29, 1976 upon (a)
approval by the Board of Directors of the Corporation (the
"Board of Directors"), and (b) approval by the shareholders of
the Corporation (the "shareholders") at the 1976 Annual
Meeting.
3. ADMINISTRATION
The Plan shall be administered by the Compensation
Committee of the Board of Directors consisting of not less than
three (3) members of the Board of Directors, provided that if
all members of the Committee are not disinterested persons, the
Plan shall be administered by a committee, all of whom are
disinterested persons, appointed by the Board of Directors and
consisting of three (3) or more directors with full authority
to act in the matter. For purposes of this section, a
disinterested person shall mean a person who, at the time
action is taken, is so defined for purposes of rule 16b-3 under
the Securities Act of 1934, or any successor provision.
The Committee shall have the power to interpret and
construe the Plan and other powers and duties as set forth in
the Plan, and any such interpretation and construction of any
provisions of this Plan shall be final. No member of the Board
of Directors or the Committee shall be liable for any action or
determination made in good faith. The Committee shall make a
report to the Board of Directors within 60 days following the
close of each calendar year that the Plan is in operation. The
report shall specify the employees who received awards under
the Plan during the prior year, the form and size of the awards
to the individual employees, and the status of prior awards.
4. ELIGIBILITY
The Committee shall from time to time select the employees
(hereafter referred to as "Participants") who are to receive
awards under the Plan, from among those employees who are
determined by the Committee to be in a position to contribute
materially to the success of the Corporation or a Subsidiary,
or to have in the past so contributed. Eligibility to
participate in the Plan shall be limited to full-time employees
(including officers and directors who are full-time employees)
of the Corporation and its Subsidiaries. The participation of
employees of a Subsidiary shall be under such conditions as the
Committee shall prescribe.
5. FORM OF AWARDS
All awards under the Plan shall be made in the form of
participation shares or stock options. Generally, an award
will consist of an equal number of participation shares and
optioned shares, but the Committee may make awards solely in
stock options or participation shares, or in any combination of
the two that it deems appropriate.
6. PARTICIPATION SHARES
The Committee shall from time to time determine from among
the eligible employees those Participants who shall receive
participation share awards. The Committee shall advise
Participants of their participation share awards by a letter
indicating the number of shares awarded and the following terms
and conditions of the award.
(a) Base Value of Participation Shares. The number
of participation shares awarded to a Participant shall be
entered in a Participant's memorandum account established
for this purpose as of the date of the award. Each
participation share shall be assigned a base value equal to
the book value of one common share of the Corporation as of
the close of the fiscal year preceding the date of the
award. Book value per share shall be defined for purposes
of the Plan as common stockholders' equity, as reported in
the year end audited consolidated financial statements of
the Corporation, divided by the number of shares of the
Corporation's Common Stock outstanding as of the date of
such financial statements. Common stock outstanding shall
include such stock held by stockholders, but does not
include authorized but unissued shares or treasury shares.
(b) Participation Share Payments. A Participant
shall be entitled to a cash payment when the award reaches
maturity equal to the book value of his participation
shares at that date, less the base value of his
participation shares at the date of award; provided,
however, that in no event shall such payment exceed the
base value of his/her participation shares, and provided
further that such payment shall be subject to adjustment as
provided in subsections 6(e) and 14(d) and section 11. The
award shall reach maturity at the earlier of the close of
the fiscal year (i) in which occurs the seventh anniversary
of the date of the award or (ii) in which book value,
measured from the close of the fiscal year prior to the
date of award, increases by 100% plus an amount equal to
any reduction in book value as provided in subsection 6(d).
The book value at the date of maturity shall be the book
value per share of the Corporation as of the close of the
fiscal year of the Corporation in which maturity is
reached, less any reductions in book value as provided in
subsection 6(d).
(c) Dividend Share Payments. A Participant shall be
entitled to an additional cash payment when the award
reaches maturity equal to the number of dividend shares
credited to his/her memorandum account times the book value
per common share of the Corporation as of the date of
maturity. At the end of each fiscal year of the
Corporation, the amount available for the acquisition of
dividend shares for the Participant's memorandum account
shall be determined by multiplying the cash dividend
declared per common share of the Corporation during such
year (but subsequent to the date of the award in the case
of participation shares and subsequent to the date of
crediting in the case of dividend shares) by the total of
the Participant's participation shares and dividend shares.
The amount so determined shall be divided by the book value
of one common share of the Corporation as of the close of
such fiscal year, and the quotient shall represent the
number of full and fractional dividend shares credited to
the Participant's memorandum account for that fiscal year.
(d) Dividend Maintenance. No dividend share shall be
credited to a participant's memorandum account in any year
(i) in which the total cash dividends declared per common
share of the Corporation are less than $.90 with respect to
awards made before April 30, 1981, and $1.80 with respect
to awards made after April 29, 1981, or (ii) in which the
total cash dividends declared per common share of the
Corporation are less than the total cash dividends declared
per common share of the Corporation in the immediately
preceding year, except that in 1984 and thereafter the
determination whether the total cash dividends declared are
less than in the immediately preceding year shall be made
after adjustments for the two-for-one stock splits which
occurred in 1984 and 1987, and the two-for-one stock split
which was declared on November 12, 1991, in accordance with
generally accepted account principles. When total cash
dividends declared per common share are less than total
cash dividends declared per common share in the immediately
preceding year as described in clause (ii) above, the book
value of each participation share held by a Participant
shall be reduced by an amount equal to the cash dividend
declared in such immediately preceding year less the cash
dividend declared in the year the cash dividend is reduced.
This subsection 6(d) shall be inoperative during such
fiscal years of the Corporation as the Committee in its
discretion shall determine.
(e) Adjustments. Book value per share for purposes
of the Plan or the number of participation or dividend
shares may be adjusted to such an extent as may be
determined by the Board of Directors to preserve the
benefit of the arrangement for the Participant and the
Corporation if, in the opinion of the Committee, after
consultation with the Corporation's independent
accountants, changes in the Corporation's accounting
policies, acquisitions or other unusual or extraordinary
items have disproportionately and materially affected the
Corporation's net income, book value per share, shares of
Common Stock outstanding, or common stockholders' equity.
(f) Absence of Rights as a Stockholder. A
Participant shall not be entitled, on the basis of a
participation share award, to any of the rights of a
stockholder in the Corporation, including the right to vote
and receive dividends on the Corporation's Common Stock.
(g) Date of Payment. Except as provided in
subsections 8(a) and 14(j), the cash payment provided for
in subsection 6(b) and (c) shall be payable in the
discretion of the Committee, but no later than 90 days
following the end of the fiscal year of the Corporation in
which the award reaches maturity. The Corporation shall
deduct applicable withholding and employment taxes from all
payments made to Participants.
(h) Termination of Employment. Except as provided in
subsections 8(a) and 14(j), any participation or dividend
shares credited to a Participant's memorandum account shall
be subject to forfeiture if the Participant is dismissed or
leaves the service of the Corporation or a Subsidiary prior
to the maturity of the award for any reason other than
death, retirement, or total and permanent disability. In
the event of death, retirement or total and permanent
disability, the award shall become payable under
subsections 6(b) and (c) as if such event resulted in the
award reaching maturity as of the close of the fiscal year
in which such event occurs.
(i) Termination of Award. Following the cash payment
provided for in subsections 6(b) and (c), any rights of the
Participant (or the Participant's estate or beneficiaries)
in the participation share award shall end.
7. STOCK OPTIONS
The Committee shall determine and designate from time to
time the eligible employees to whom options are to be granted
and the number of common shares of the Corporation to be
optioned to each. After granting an option to a Participant,
the Committee shall cause to be delivered to the Participant a
document to be executed by the Corporation and the Participant
evidencing the granting of the option and the terms and
conditions of such option. The document shall be in such form
as the Committee shall from time to time approve. The terms
and conditions of all options granted under the Plan need not
be the same, but all options must, at a minimum, meet the
following terms and conditions.
(a) Period of Option. The period of each option
shall be no more than ten years from the date it is
granted.
(b) Option Price. The option price shall be
determined by the Committee, but shall not in any instance
be less than the fair market value of the stock at the time
that the option is granted. Fair market value shall be
defined as the reported closing price of the Corporation's
stock on the date the option is granted as reported on the
composite list used by The Wall Street Journal for
reporting stock prices, or if no such sale shall have been
made on that day, on the last preceding day on which there
was such a sale.
(c) Limitations on Exercise. The option shall not be
exercisable until at least one (1) year has expired after
the granting of the option, during which time the
Participant shall have been in the continuous employ of the
Corporation or a Subsidiary. At any time during the period
of the option after the end of the first year, the
Participant may purchase up to 30 percent of the shares
covered by the option; after the end of the second year, an
additional 30 percent; and after the end of the third year,
the remaining 40 percent of the total number of shares
covered by the option, so that, upon the expiration of the
third year, the Participant will have become entitled to
purchase all shares subject to the option. Provided,
however, that if the Participant's employment is terminated
for any reason other than death, retirement, or total and
permanent disability, the option shall only be exercisable
for three months following such termination and only for
the number of shares which were exercisable on the date of
such termination. In no event, however, may the option be
exercised more than ten (10) years after the date of its
grant.
(d) Exercise after Death, Retirement, or Disability.
If the Participant dies without having exercised the option
in full, the remaining portion of such option, determined
without regard to the limitations in subsection 7(c), may
be exercised within the earlier of (i) two years from the
date of death or (ii) the remaining period of the option.
The option may be exercised by the person or persons to
whom the option holder's rights under the option shall pass
by will or by applicable law or, if no such person has such
rights, by his executor or administrator. In the event of
the retirement or total and permanent disability of a
Participant without having exercised the option in full,
the remaining portion of such option shall be exercisable
without regard to the limitations in subsection 7(c) within
the earlier of (i) two years from the date of such event or
(ii) the remaining term of the option.
(e) Non-transferability. Options shall not be
transferable other than by will or by the laws of descent
and distribution, and during the Participant's lifetime
shall be exercisable only by him/her.
(f) Notice of Exercise. Options shall be exercised
by delivering to the Corporation, at the office of
Treasurer at the Dallas World Headquarters, written notice
of the number of shares with respect to which option rights
are being exercised and by paying in full the option price
of the shares at the time being acquired. Payment may be
made in cash, a check payable to the Corporation, or, in
the discretion of the Committee, in shares of the
Corporation's Common Stock transferable to the Corporation
and having a fair market value on the transfer date equal
to the amount payable to the Corporation. The date of
exercise shall be deemed to be the date the Corporation
receives the written notice and payment for the shares
being purchased. A Participant shall have none of the
rights of a stockholder until the shares are issued to
him/her.
(g) Purchase for Investment. It is contemplated that
the Corporation will register shares sold to Participants
pursuant to the Plan under the Securities Act of 1933. In
the absence of an effective registration, however, a
Participant exercising an option hereunder may be required
to give a representation that he/she is acquiring such
shares as an investment and not with a view to distribution
thereof.
8. GOVERNMENT SERVICE, LEAVES OF ABSENCE AND OTHER
TERMINATIONS
(a) In the sole and absolute discretion of the
Committee, a participation share award may be considered to
reach maturity as of the close of the fiscal year preceding
the date that a Participant enters such governmental or
military service as may be approved by the Committee. In
such cases, the cash payment contemplated in subsections
6(b) and (c) shall be paid within 90 days from the date the
Participant enters such service.
(b) A leave of absence approved by the Committee
shall not be deemed to be a termination of employment for
purposes of the Plan. A termination of employment with the
Corporation or a Subsidiary to accept immediate
reemployment with the Corporation or a Subsidiary likewise
shall not be deemed to be a termination of employment for
purposes of the Plan.
9. SHARES SUBJECT TO THE PLAN
The number of shares of Common Stock of the Corporation
available for option and sale under the Plan and the number of
participation shares which may be awarded shall not exceed
8,000,000 in the aggregate, of which not more than 6,000,000
shall be available for option and sale. If an option ceases to
be exercisable in whole or in part by reason of expiration of
time permitted for its exercise, termination of employment of a
Participant who has been granted an option, cancellation,
surrender, or for any other reason, the shares which had been
subject to such option shall continue to be available for
options or participation share awards under the Plan. The
shares subject to the Plan may consist in whole or in part of
authorized but unissued shares or of treasury shares, as the
Board of Directors may from time to time determine.
Participation shares which are retired through forfeiture or
maturity shall again be available for awards or options under
the Plan.
10. INDIVIDUAL LIMITS
In the case of awards made before April 30, 1981, the Plan
provided that no single Participant could receive over the term
of the Plan options to purchase shares or participation shares
numbering in the aggregate more than 320,000, in such
combination of participation shares and option shares as the
Committee may decide. In the case of awards made after April
29, 1981, the maximum number of participation shares or options
to purchase shares which shall be granted to any one individual
shall be such amount as shall be determined from time to time
by the Committee.
11. CHANGES IN CAPITALIZATION
In the event there are any changes in the Common Stock or
the capitalization of the Corporation through merger,
consolidation, reorganization, recapitalization, stock
dividend, stock split or other change in the corporate
structure, appropriate adjustments and changes may be made by
the Committee in (a) the aggregate number of shares subject to
the Plan, (b) the maximum number of shares for which options or
participation share awards may be granted or awarded to any one
Participant, (c) the number of shares and the option price per
share of all stock subject to outstanding options, (d) the
number of participation shares, the base value per
participation share awarded to Participants, and dividend
shares credited to Participants' memorandum accounts, and (e)
such other provisions of the Plan as may be necessary and
equitable to carry out its purposes.
12. EFFECT ON OTHER PLANS
All payments and benefits under the Plan shall constitute
special compensation and shall not affect the level of benefits
provided to or received by any Participant (or the
Participant's estate or beneficiaries) as part of any employee
benefit plan of the Corporation or a Subsidiary. This Plan
shall not be construed to affect in any way a Participant's
rights and obligations under any other plan maintained by the
Corporation or a Subsidiary on behalf of employees.
13. TERM OF THE PLAN
The term of the Plan shall be ten (10) years, beginning
April 29, 1976 and ending April 28, 1986, unless the Plan is
terminated sooner by action of the Board of Directors or
extended by action of the stockholders. No option may be
granted or participation share awarded after the termination
date of the Plan, but options and participation shares
theretofore granted or awarded may continue in force beyond
that date pursuant to their terms.
14. GENERAL PROVISIONS
(a) Designated Beneficiary. Each Participant who
shall be granted a participation share award under the Plan
may designate a beneficiary or beneficiaries with the
Committee on a form to be prescribed by it; provided that
no such designation shall be effective unless so filed
prior to the death of such Participant.
(b) No Right of Continued Employment. Neither the
establishment of the Plan nor the payment of any benefits
hereunder nor any action of the Corporation or its
Subsidiaries or of the Board of Directors of the
Corporation or its Subsidiaries or of the Committee shall
be held or construed to confer upon any person any legal
right to be continued in the employ of the Corporation or
its Subsidiaries, and the Corporation and its Subsidiaries
expressly reserve the right to discharge any Participant
whenever the interest of the Corporation or its
Subsidiaries may so require without liability to the
Corporation or its Subsidiaries, the Board of Directors of
the Corporation or its Subsidiaries or the Committee,
except as to any rights which may be expressly conferred
upon a Participant under the Plan.
(c) Discretion of the Corporation, Board of Directors
and the Committee. Any decision made or action taken by
the Corporation or by the Board of Directors of the
Corporation or by the Committee arising out of or in
connection with the construction, administration,
interpretation and effect of the Plan shall be within the
absolute discretion of the Corporation, the Board of
Directors of the Corporation or the Committee, as the case
may be, and shall be conclusive and binding upon all
persons. The Committee shall determine in its sole
discretion whether a termination of employment for purposes
of the Plan is caused by disability or retirement.
(d) Modification of Awards. The Committee may in its
sole and absolute discretion, by written notice to a
Participant, (i) limit or eliminate the ability of the
Participant's participation and dividend shares to generate
additional dividend shares, and/or (ii) fix the book value
of all or any portion of the Participant's existing
participation and dividend shares for purposes of any
payments that might be made under subsections 6(b) and (c)
at their book value as of the end of the fiscal year of the
Corporation in which such notice is dated, and/or (iii)
limit the period in which an option may be exercised to a
period ending at least three months following the date of
such notice, and/or (iv) limit or eliminate the number of
shares subject to option after a period ending at least
three months following the date of such notice. The
Committee may credit participation and dividend shares
which are affected under this subsection 14(d)(i) or (ii),
with interest at a rate and in a manner determined from
time to time by the Committee.
(e) No Segregation of Cash or Stock. Memorandum
accounts established for Participants are merely a
bookkeeping convenience and neither the Corporation nor its
Subsidiaries shall be required to segregate any cash or
stock which may at any time be represented by awards. Nor
shall anything provided herein be construed as providing
for such segregation. The Corporation or its Subsidiaries
or the Board of Directors of the Corporation or the
Committee shall not, by any provisions of this Plan, be
deemed to be a trustee of any property, and the liability
of the Corporation or its Subsidiaries to any Participant
pursuant to the Plan shall be those of a debtor pursuant to
such contract obligations as are created by the Plan, and
no such obligation of the Corporation or its Subsidiaries
shall be deemed to be secured by any pledge or other
encumbrance on any property of the Corporation or its
Subsidiaries.
(f) Inalienability of Benefits and Interest. Except
as provided in subsection (a), no benefit payable under or
interest in the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment,
pledge, encumbrance or charge, and any such attempted
action shall be void and no such benefit or interest shall
be in any manner liable for or subject to debts, contracts,
liabilities, engagements, or torts of any Participant or
beneficiary.
(g) Delaware Law to Govern. All questions pertaining
to the construction, regulation, validity and effect of the
provisions of the Plan shall be determined in accordance
with the laws of the State of Delaware.
(h) Change in Conditions of Federal Income Tax Laws.
In the event of relevant changes in the Federal income tax
laws, regulations and rulings or other factors affecting
the continued appropriateness of participation share awards
or stock options under the Plan, the Committee may, in its
sole discretion, accelerate or change the form of payment,
distribution or exercise of such awards or stock option
grants. In addition, the Committee shall have the power to
take such action as it deems necessary and desirable to
amend this Plan and any options granted hereunder, for the
purpose of permitting the Participant to obtain favorable
Federal income tax treatment in connection with the options
or disposition of shares obtained through exercise of
options.
(i) Election to Receive Cash Rather than Stock. The
Committee, in its sole and absolute discretion, may allow
selected Participants the right to convert their
unexercised stock options to a cash payment. For each such
option so converted, the Participant shall be entitled to
receive cash equal to the difference between the
Participant's option price and the fair market value of the
Corporation's stock on the date of conversion. In order to
make such a conversion, however, the Participant must at
the time of such conversion also elect to exercise an
equivalent number of option shares for the Corporation's
stock on the same date. Fair market value at the date of
conversion shall be defined as the reported closing price
of the Corporation's stock on the date of conversion as
reported on the composite list used by The Wall Street
Journal for reporting stock prices, or if no such sale
shall have been made on that day, on the last preceding day
on which there was such a sale.
(j) Election to Defer Receipt. Under rules
established by the Committee in its sole and absolute
discretion, the Committee may permit a Participant to elect
to defer the receipt of all or any portion of amounts which
may otherwise become payable under subsections 6(b) and
(c). This election shall be evidenced by a letter from the
Participant to the Committee, which letter shall, before
the date of maturity of the award, be signed by the
Participant and accepted by the Committee. The period of
deferral specified in the letter shall be set forth in
accordance with the rules of the Committee, and may extend
to a period following retirement. If accepted by the
Committee, such letter may provide that the amount
otherwise payable to the Participant shall be valued at the
date of maturity and earn interest from that date at a rate
and in a manner determined from time to time by the
Committee. After adjustment for any resulting interest,
the deferred amount shall be paid at the date or dates
specified in the Participant's letter, and such adjusted
amount shall not be subject to forfeiture as otherwise
provided in subsection 6(h). In the discretion of the
Committee, the balance of a Participant's deferred amount
may be paid earlier than the date or dates specified in the
Participant's letter, but only in the case of severe
financial hardship.
(k) Purchase of Common Stock. The Corporation and
its Subsidiaries may, but shall not be required to,
purchase from time to time shares of Common Stock of the
Corporation in such amounts as they may determine for
purposes of the Plan. The Corporation and its Subsidiaries
shall have no obligation to retain, and shall have the
unlimited right to sell or otherwise deal with for their
own account, any shares of Common Stock of the Corporation
purchased pursuant to this paragraph.
(i) Use of Proceeds. The proceeds received by the
Corporation from the sale of stock pursuant to the exercise
of options shall be used for general corporation purposes.
15. INCENTIVE STOCK OPTIONS
The authority granted to the Committee pursuant to Section
7 of the Plan shall include the authority to (i) grant
"incentive stock options," as that term is defined in Section
422A of the Internal Revenue Code of 1954, as amended, and (ii)
modify options outstanding on August 13, 1981, to qualify them
as incentive stock options. The provisions of Section 7 of the
Plan shall apply to incentive stock options, subject to the
modifications and additions set forth in the following
subsections of this Section 15.
(a) 10 Percent Shareholders. An incentive stock
option shall be granted only to an individual who, at the
time the option is granted, does not own stock possessing
more than 10 percent of the total combined voting power of
all classes of stock of the employer corporation or of its
parent or subsidiary corporations.
(b) Prior Option Rule. An incentive stock option
shall not be exercisable while there is outstanding (within
the meaning of subsection (c)(7) of Section 422A of the
Internal Revenue Code of 1954, as amended) any incentive
stock option which was granted, before the granting of such
option, to such individual to purchase stock in his/her
employer corporation or in a corporation which (at the time
of the granting of such option) is a parent or subsidiary
corporation of the employer corporation, or in a
predecessor corporation of any such corporations.
(c) Limitations on Option Grants. In the case of an
incentive stock option granted after December 31, 1980, the
aggregate fair market value (determined as of the time the
option is granted) of the stock for which any employee may
be granted incentive stock options in any calendar year
(under all plans described in subsection (b) of Section
422A of the Internal Revenue Code of 1954, as amended, of
his/her employer corporation and its parent and subsidiary
corporations, hereinafter referred to as "such plans")
shall not exceed $100,000 plus any unused limit carryover
carried to such year. The unused limit carryover shall be
an amount which equals one-half of the amount which an
employee was granted less than $100,000 in options
(determined as of the time the option is granted) in any
calendar year after 1980 (under all such plans of his/her
employer corporation and its parent and subsidiary
corporations). The unused limit carryover from any year is
the amount of unused limit carryover reduced by the amount
of such carryover which was used in prior calendar years.
Provided, however, that such unused limit carryover may
only be carried over to each of the three calendar years
succeeding the year in which the limit carryover arises,
and further provided that the amount of any options granted
during any calendar year shall be treated as first using up
the $100,000 limitation and then shall be treated as using
up unused limit carryovers to such year in the order of the
calendar years in which such carryovers arose.
(d) Exercise After Disability or Retirement. In the
event of the total and permanent disability of a
participant without having exercised an incentive stock
option in full, the remaining portion of such incentive
stock options shall be exercisable for purposes of
subsection 7(d) of this Plan without regard to the
limitations of subsection 7(c) within the earlier of (i)
one year from the date of such event or (ii) the remaining
term of the option. In the event of the retirement of a
participant without having exercised an incentive stock
option in full, the remaining portion of such option shall
be exercisable without regard to the limitations in
subsection 7(c) within the earlier of (i) three months from
the date of such retirement or (ii) the remaining term of
the option.
MANAGEMENT ACHIEVEMENT AWARD PROGRAM
As Amended as of January 1, 1993
1. PURPOSE
This Management Achievement Award Program ("MAAP" or the
"Plan") is amended as of January 1, 1993. The purpose of
MAAP is to further unite the interests of the stockholders
of the Company and its key executives through:
(a) the annual establishment of Company objectives and the
maintenance of a dividend level which are deemed by
the Company's Board of Directors (the "Board") to be
in the best short- and long-range interests of the
Company, and
(b) the annual payment, or provision for future payment,
of incentive compensation to each eligible
participating key executive in the form of a cash
award which is in an amount significantly above
competitive base salary, provided his or her
performance has meaningfully contributed to the
attainment of Company objectives.
2. ELIGIBILITY
Employees eligible to participate in MAAP (the
"Participant") shall include any employee of the Company or
any subsidiary or affiliate whose position is evaluated
under the Company's Exempt Salary Administration Program
(the "Salary Program") at 994 total Hay points, or more,
with at least 304 accountability points. Notwithstanding
the above, the Chief Executive Officer (the "CEO") of the
Company or the Compensation Committee of the Board (the
"Compensation Committee") may, in their sole discretion,
determine that an employee of the Company or any subsidiary
or affiliate is to be eligible to participate in MAAP, or
exclude any employee who is otherwise determined to be
eligible.
3. OBJECTIVE AREAS AND PERFORMANCE LEVELS
Prior to the beginning of each calendar year, or as soon
thereafter as reasonably practicable, performance
objectives (the "Objective(s)") shall be established for
each Participant in one or more of the five objective areas
("Objective Areas"), i.e. Corporate, Unit, Growth,
Functional or Individual.
The Board shall establish the Objective(s) and any Control
Measures (as defined in section 6 below) in the Corporate
Objective Area. Unless otherwise determined by the Board,
the Corporate Objective Area shall be focused toward the
achievement and maintenance of a return on stockholders'
equity consistent with the Company's goals. The CEO, or
his delegate, shall establish the Objectives and any
Control Measures in all Unit, Growth, Functional and
Individual Objective Areas for all Participants, except as
otherwise determined by the Compensation Committee.
For each Objective there may be established performance
levels ("Performance Level(s)") which shall consist of
successively better standards or ranges taking into
consideration actual progress in the calendar year in
accomplishing the Objective(s). These performance levels
shall be defined as "No Progress Towards Objective," "Some
Progress Towards Objective," "Significant Progress Towards
Objective," "Achieved Objective" and "Significantly Exceeds
Objective." Performance below the "Some Progress Towards
Objective" level shall not result in the payment of an
award.
From time to time, it may be desirable to establish the
Objective(s) in such a manner that specific Performance
Levels cannot be defined. In such cases, the specific
Performance Level(s) will be determined pursuant to section
7 of this Plan.
The Objective(s) in the Individual Objective Area for a
Participant may be defined to include specific target areas
on which such Participant should focus during the year.
The original definition of any and all Objectives,
Objective Areas, Performance Levels, Percentage Weightings
(as defined in section 4 below), and Control Measures shall
not be changed during the course of a calendar year, except
by the approval of the individual or body who originally
approved the same. When mid-calendar year changes in the
Company's accounting or internal reporting policies have
the effect of making the financial results between two
periods not fairly comparable for the purpose of properly
measuring performance where Objectives are stated in
financial terms, such results may be adjusted in such
manner as shall be deemed fair and appropriate by the
individual or body who originally approved the Objective.
4. OBJECTIVE AREA WEIGHTINGS
Coincident with the establishment of Objective Areas,
Objectives, and Performance Levels, the CEO, or his
delegate, or the Compensation Committee in the case of
employees who are either directors of the Company or
officers of the Company who are elected by the Board, shall
establish a percentage weighting ("Percentage Weighting")
applicable to each Objective Area, or, where applicable, to
each Objective within an Objective Area. The total of all
Percentage Weightings in all Objective Areas for each
Participant shall be 100 percent. The Percentage Weighting
which is applied to any Objective must be a multiple of 5
percent and not less than 10 percent.
5. ACCOUNTABILITY POINT VALUATION
Prior to the beginning of each calendar year, or as soon
thereafter as reasonably practicable, the Board shall,
after review by the Compensation Committee, establish the
value of each Accountability Point as established under the
Salary Program at the following Performance Levels: "Some
Progress Towards Objective," "Significant Progress Towards
Objective," "Achieved Objective," and "Significantly
Exceeds Objective." Such valuations shall at all times
take into account the basic purposes of MAAP, and shall in
no event result in the potential obligation to pay
incentive compensation which, in the Board's opinion, is
not in the best short- and long-range interests of the
Company.
6. CONTROL MEASURES
At the time the Objectives are established, there may also
be established certain conditions known as control measures
("Control Measures") which are either personal as to one
individual, or general as to a group of individuals.
Failure to fulfill a Control Measure may partially or
totally deprive the individual to whom the Control Measure
applies of the right to receive an award, notwithstanding
the level of performance attained on any or all Objectives,
or in any or all Objective Areas.
In the event that the Company's dividend rate is reduced,
other than by reason of stock splits or other similar
events having no effect on the actual amount paid out in
dividends, no award shall be paid under MAAP for
performance during the calendar year in which such a
reduction occurs. This shall be a Control Measure and
shall apply in each calendar year during which the Plan is
in effect.
7. ASCERTAINMENT OF PERFORMANCE LEVELS
The Performance Level actually attained with respect to
any Objective or Control Measure stated in financial
terms, and the payment with respect thereto, shall be
determined upon the completion of audited results of
the Company and its subsidiaries.
When specific Performance Levels in the Corporate Objective
Area have not been defined under section 3 of this Plan,
the Board will determine the Performance Level attained
following the end of the calendar year.
The Performance Level attained with respect to any Unit or
Growth Objective or Control Measure stated in nonfinancial
terms shall be determined and approved by all levels in the
chain of command which originally approved or defined such
Objective or Control Measure following the end of the
calendar year.
The Performance Level attained with respect to any
Functional Objective shall be determined and approved by
the CEO following the end of the calendar year.
Notwithstanding the foregoing, the CEO or his delegate may,
in their discretion, reduce the Functional Performance
Level with respect to an individual Participant to more
accurately reflect such Participant's performance.
Performance in the Individual Objective Area will be
determined by the CEO, or his delegate, following the end
of the calendar year, based upon the Participant's
performance with respect to the specified target areas.
Notwithstanding the above, the Compensation Committee may,
in its sole discretion, authorize that such determinations
of the Performance Levels attained be made prior to the end
of the calendar year, and that the payment of awards be
made pursuant to section 10 of this Plan.
8. AMOUNT OF INCENTIVE COMPENSATION
The amount of incentive compensation an employee is
eligible to receive depends upon:
(a) the Percentage Weighting applicable to that
Objective Area,
(b) the value of an Accountability Point (as
established under the Salary Program) which
applies as a consequence of the Performance Level
attained in that area, and
(c) the Accountability Points assigned to the
position.
Performance in each Objective Area shall be valued by
multiplying (a) times (b) times (c).
Except as otherwise hereinafter provided, the total award a
Participant is eligible to receive is the sum of the values
attributable to performance actually attained in each
Objective Area, as determined by the preceding paragraph.
9. ADJUSTMENT OF AWARD
Except as otherwise determined by the Compensation
Committee, in its sole and absolute discretion, the amount
of an award may be adjusted by the CEO, in his sole
discretion, to more accurately reflect an individual
Participant's performance during the calendar year.
The amount of the award, in the event of transfers to,
from, or between MAAP eligible positions may be
reviewed, and may be adjusted and prorated, on such
basis as shall be determined fair and equitable by the
CEO, or his delegate.
Adjustments may be made in the amount of an award after the
potential thereof has been authorized, if the applicable
position is reevaluated under the Salary Program during the
calendar year, on such basis as shall be determined fair
and equitable by the CEO, or his delegate.
Termination of employment for any reason other than death,
retirement, or total and permanent disability shall result
in a forfeiture of any MAAP award attributable to
performance during the calendar year in which termination
occurred. A Participant's death, retirement, or total and
permanent disability may result in the pro rata or other
adjustment to the amount of the award on such basis as
shall be determined fair and equitable by the CEO, or his
delegate.
Notwithstanding any provision of MAAP, no award shall be
paid to any individual who, in any calendar year, has
discharged his principal accountabilities in a manner
deemed unacceptable under the Salary Program.
10. PAYMENT OF AWARDS
Awards shall be paid in one lump sum in cash in the first
calendar quarter following the calendar year for which the
Objectives were established. Notwithstanding the above,
the Compensation Committee may make payments at such
earlier times as it may, in its sole discretion, determine,
and the Compensation Committee, or the CEO, in their sole
discretion, will make such determinations as to
performance, and establish procedures (including repayment
of any overpayment which is determined after the completion
of the final audit), implementing such early payment.
Prior to becoming entitled to receive an award, an
individual may elect to defer the receipt thereof to some
future date or dates. Deferred MAAP awards shall not bear
interest.
11. ADMINISTRATION AND INTERPRETATION
Except as otherwise provided by this Plan, the Compensation
Committee has discretionary authority to construe and
interpret the Plan and to resolve all questions arising
thereunder, and such action shall be final and conclusive
as to all individuals affected thereby.
Except as provided in this Plan, no right of any
Participant shall be subject in any manner to anticipation,
alienation, sale, transfer, assignment, pledge,
encumbrance, charge, attachment, garnishment, execution,
levy, bankruptcy, or any other disposition of any kind,
whether voluntary or involuntary, prior to actual payment
of an award. No Participant, or any other person, shall
have any interest in any fund, or in any specific asset or
assets of the Company, by reason of an award that has been
made but has not been paid or distributed.
Nothing contained in MAAP shall be construed as a contract
of employment or as a right of any Participant to be
continued in the employment of the Company, or as a
limitation on the right of the Company to discharge any
Participant with or without cause.
The Board may, at any time, amend this Plan, order the
temporary suspension of its application, or terminate
it in its entirety, provided, however, that no such
action shall adversely affect the rights or interests
of Participants theretofore vested hereunder.
MAAP is hereby adopted effective as of January 1, 1993.
KIMBERLY-CLARK CORPORATION
1986 EQUITY PARTICIPATION PLAN
(as amended effective February 11, 1993)
1. PURPOSE
This 1986 Equity Participation Plan (the "Plan") of
Kimberly-Clark Corporation (the "Corporation") is intended to
encourage those employees who materially contribute, by
managerial, scientific or other innovative means, to the
success of the Corporation, or of a consolidated subsidiary or
an equity company of the Corporation (collectively, the
"Subsidiaries"), to acquire an ownership interest in the
Corporation, thereby increasing their motivation for and
interest in the Corporation's or Subsidiaries' long-term
success.
2. EFFECTIVE DATE
The Plan is effective as of April 17, 1986 upon (a)
approval by the Board of Directors of the Corporation (the
"Board of Directors"), and (b) approval by the stockholders of
the Corporation at the 1986 Annual Meeting.
3. ADMINISTRATION
The Plan shall be administered by the Compensation
Committee of the Board of Directors consisting of not less than
three (3) members of the Board of Directors, provided that if
all members of the Committee are not disinterested persons, the
Plan shall be administered by a committee, all of whom are
disinterested persons, appointed by the Board of Directors and
consisting of three (3) or more directors with full authority
to act in the matter.
For purposes of this section, a "disinterested person"
shall mean a person who, at the time action is taken, is so
defined for purposes of rule 16b-3 under the Securities
Exchange Act of 1934, or any successor provision.
The term 'Committee' shall mean the Compensation Committee
or the committee appointed by the Board of Directors under this
section 3, as the case may be.
The Committee shall have the power to interpret and
construe the Plan. Any interpretation or construction of any
provisions of this Plan by the Committee shall be final. No
member of the Board of Directors or the Committee shall be
liable for any action or determination made in good faith.
Within 60 days following the close of each calendar year that
the Plan is in operation, the Committee shall make a report to
the Board of Directors. The report shall specify the employees
who received awards under the Plan during the prior year, the
form and size of the awards to the individual employees, and
the status of prior awards.
The Committee shall have the power to promulgate rules in
connection with the performance of its obligations, powers and
duties under the Plan, including its duty to administer and
construe the Plan.
4. ELIGIBILITY
The Committee shall from time to time select the employees
who are to receive awards under the Plan (collectively, the
"Participants") from those employees whom the Committee
determines either to be in a position to contribute materially
to the success of the Corporation or a Subsidiary, or to have
in the past so contributed. Only full-time employees
(including officers and directors who are full-time employees)
of the Corporation and its Subsidiaries are eligible to
participate in the Plan. Employees of a Subsidiary shall
participate in the Plan under such conditions as the Committee
shall prescribe.
5. FORMS OF AWARDS
All awards under the Plan shall be made in the form of
Participation Shares as described in Section 6(a), or options
to purchase shares of common stock, par value $2.50 per share,
of the Corporation (the "Common Stock"). Generally, an award
will consist of an equal number of Participation Shares and
optioned shares, but the Committee may make awards solely in
stock options or Participation Shares, or in any combination of
the two.
6. PARTICIPATION SHARES
The Committee shall from time to time designate those
Participants who shall receive Participation Share awards. The
Committee shall advise such Participants of their Participation
Share awards by a letter indicating the number of Participation
Shares awarded and the following terms and conditions of the
award.
(a) Base Value of Participation Shares. The number
of Participation Shares awarded to a Participant shall be
entered in such Participant's memorandum account (the
"Account") established for this purpose as of the date of the
award. Each Participation Share shall be assigned a base value
equal to the book value of one share of Common Stock as of the
close of the fiscal year of the Corporation preceding the date
of the award (the "Base Value"). Book value per share shall be
defined for purposes of the Plan as common stockholders'
equity, as reported in the year-end audited consolidated
financial statements, or in the quarter-end unaudited
consolidated financial statements, of the Corporation (as the
case may be), divided by the number of shares of Common Stock
outstanding as of the date of such financial statements, as
adjusted pursuant to the provisions of the Plan (the "Book
Value"). The term "book value", when used without initial
capital letters, shall be defined as in the preceding sentence
without the adjustments.
(b) Maturation of Participation Shares. An award of
Participation Shares shall reach maturity at the close of the
fiscal year in which (i) the fifth anniversary of the date of
the award occurs, (ii) the Participant who holds such award
dies, retires, or becomes totally and permanently disabled, or
(iii) the events described in subsection 8(a) occur, whichever
is earlier (the "Maturity Date"). The Book Value at the
Maturity Date shall be the Book Value as of the close of the
fiscal year of the Corporation in which such Maturity Date
occurs.
(c) Participation Share Payments. Each Participant
shall be entitled to receive a cash payment for his
Participation Share award, payable as provided in subsection
6(g), equal to the sum of the Maturity Value and the Dividend
Share Value.
The "Maturity Value" of an award shall be equal to the
Book Value of the Participation Shares subject to such award at
the Maturity Date less the Base Value of such Participation
Shares.
Participants are not entitled to receive current
dividends on their Participation Shares, but in lieu thereof
their Accounts shall be credited with dividend shares (the
"Dividend Shares"). The "Dividend Share Value" of an award
shall be equal to the product of (A) the number of Dividend
Shares credited to a Participant's Account and (B) the book
value per share of the Common Stock at the Maturity Date. The
amount available for the acquisition of Dividend Shares for a
Participant's Account at the end of each fiscal quarter of the
Corporation shall be determined by multiplying the total cash
dividend declared per share of Common Stock during such quarter
(but subsequent to the date of the award in the case of
Participation Shares and subsequent to the date of crediting in
the case of Dividend Shares) by the total of the Participation
Shares and Dividend Shares in the Participant's Account. The
amount so determined shall be divided by the book value of one
share of Common Stock as of the close of such fiscal quarter,
and the quotient shall represent the number of full and
fractional Dividend Shares credited to the Participant's
Account for that quarter.
(d) Dividend Maintenance. No Dividend Shares shall
be credited to a Participant's Account in any quarter (i) in
which the total cash dividends declared per share of Common
Stock are less than $.62, or (ii) in which the total cash
dividends declared per share of Common Stock are less than the
total cash dividends declared per share of Common Stock in the
same quarter of the immediately preceding year, except that in
the final three quarters of 1987 and thereafter the
determination of whether the total cash dividends per share of
Common Stock are less than in the immediately preceding year
shall be made after adjustment for the two-for-one stock split
which occurred in 1987, and the two-for-one stock split which
was declared on November 12, 1991, in accordance with generally
accepted accounting princples. When total cash dividends
declared per share of Common Stock are less than total cash
dividends declared per share of common Stock in the same
quarter of the immediately preceding year as described in
clause (ii) immediately above, the book value of each
Participation Share held by a Participant shall be reduced by
an amount equal to the difference between the cash dividend
declared in such immediately preceding quarter less the cash
dividend declared in the quarter the cash dividend is reduced.
This subsection 6(d) shall be inoperative during such fiscal
years of the Corporation as the Committee in its discretion
shall determine.
(e) Adjustments. The Committee may adjust Book
Value, for purposes of the Plan, to preserve the benefit to the
Participant and the Corporation contemplated hereby if, in the
opinion of the Committee after consultation with the
Corporation's independent accountants, changes in the
Corporation's accounting policies, acquisitions, divestitures
or other unusual or extraordinary transactions or events have
materially affected the Corporation's net income, book value,
shares of Common Stock outstanding, or stockholders' equity
(collectively, the "Events"), provided that any decisions or
actions of the management of the Corporation which resulted in
an Event were made or taken in the best interests of the
Corporation's stockholders. To preserve the benefit to the
Participant and the Corporation contemplated hereby, if a cash
dividend is declared in any quarter and the payment date for
such cash dividend is later than the immediately subsequent
quarter, then such cash dividend will be deemed to be declared
in the quarter immediately preceding the payment date for all
purposes of this Plan, as of the first date the Board meets in
such quarter, or if the Board does not meet in such quarter, on
the first business day of such quarter, including, but not
limited to, the determination of (i) Book Value in subsection
6(a), (ii) Dividend Shares in subsection 6(c) and (iii) whether
the total cash dividends declared per share of Common Stock in
a quarter is less than $.31 or whether the total cash dividends
declared per share of Common Stock are less than the total cash
dividends declared per share of Common Stock in the same
quarter of the immediately preceding year in subsection 6(d).
(f) Absence of Rights as a Stockholder. A
Participant shall not be entitled, on the basis of a
Participation Share award, to any of the rights of a
stockholder of the Corporation, including the right to vote and
receive dividends on Common Stock.
(g) Date of Payment. Except as provided in
subsection 14(j), the cash payment provided for in subsection
6(c) shall be payable within 90 days following the Maturity
Date. The Corporation shall deduct applicable withholding and
employment taxes from all payments made to Participants.
(h) Termination of Employment. Except as provided in
subsections 6(b), 8(a) and 14(j), any Participation or Dividend
Shares credited to a Participant's Account shall be subject to
forfeiture if the Participant is dismissed or leaves the
service of the Corporation or a Subsidiary prior to the
maturity of the award for any reason other than death,
retirement or total and permanent disability.
(i) Termination of Award. After the Corporation
makes the cash payment provided for in subsection 6(c), any
rights of the Participant (or the Participant's estate or
beneficiaries) in the Participation Share award shall end.
7. STOCK OPTIONS
The Committee shall determine and designate from time to
time those Participants to whom options are to be granted and
the number of shares of Common Stock to be optioned to each (an
"Option"). Such Options may be in the form of "incentive stock
options" as that term is defined in Section 422A of the
Internal Revenue Code, as amended (an "Incentive Stock Option")
or in the form of options which are not Incentive Stock Options
("Nonqualified Stock Options"). After granting an Option to a
Participant, the Committee shall cause to be delivered to the
Participant a document to be executed by the Corporation and
the Participant evidencing the granting of the Option and the
terms and conditions of such Option. The document shall be in
such form as the Committee shall from time to time approve.
The terms and conditions of all Options granted under the Plan
need not be the same, but all Options must meet the applicable
terms and conditions specified in subsections 7(a) through
7(h). Unless indicated otherwise, when the term Option appears
in subsections 7(a) through 7(h), such term shall include
Incentive Stock Options.
(a) Period of Option. The Period of each Incentive
Stock Option shall be no more than 10 years, and the period of
each Nonqualified Stock Option shall be no more than 10 years
and one day, from the date it is granted.
(b) Option Price. The Option price shall be
determined by the Committee, but shall not in any instance be
less than the Fair Market Value of the Common Stock at the time
that the Option is granted (the "Option Price"). Fair Market
Value shall be defined as the reported closing price of the
Common Stock on the date the Option is granted as reported on
the composite list used by The Wall Street Journal for
reporting stock prices, or if no such sale shall have been made
on that day, on the last preceding day on which there was such
a sale.
(c) Limitations on Exercise
(i) In General. The Option shall not be
exercisable until at least one year has expired after the
granting of the Option, during which time the Participant shall
have been in the continuous employ of the Corporation or a
Subsidiary. At any time during the period of the Option after
the end of the first year, the Participant may purchase up to
30 percent of the shares covered by the Option; after the end
of the second year, an additional 30 percent; and after the end
of the third year, the remaining 40 percent of the total number
of shares covered by the Option; provided, however, that if the
Participant's employment is terminated for any reason other
than death, retirement, or total and permanent disability, the
Option shall be exercisable only for three months following
such termination and only for the number of shares of Common
Stock which were exercisable on the date of such termination.
In no event, however, may an Incentive Stock Option be
exercised more than 10 years, and in no event may a
Nonqualified Stock Option be exercised more than 10 years and
one day, after the date of its grant.
(ii) Prior Option Rule. An Incentive Stock
Option granted before January 1, 1987 shall not be exercisable
while there is outstanding any prior Incentive Stock Option
which was granted to such Participant to purchase stock in the
Corporation, a Subsidiary or a predecessor corporation of the
Corporation or a Subsidiary.
(d) Exercise after Death, Retirement, or Disability.
If a Participant dies, retires or becomes totally and
permanently disabled without having exercised the Option in
full, the remaining portion of such Option may be exercised,
without regard to the limitations in subsection 7(c)(i), within
(i) three years from the date of any such event or (ii) the
remaining period of the Option, whichever is earlier. Upon a
Participant's death, the Option may be exercised by the person
or persons to whom such Participant's rights under the Option
shall pass by will or by applicable law or, if no such person
has such rights, by his executor or administrator.
(e) Non-transferability. During the Participant's
lifetime, Options shall be exercisable only by such
Participant. Options shall not be transferable other than by
will or the laws of descent and distribution upon Participant's
death.
(f) Exercise; Notice Thereof. Options shall be
exercised by delivering to the Corporation, at the office of
the Treasurer at the Dallas World Headquarters, written notice
of the number of shares with respect to which Option rights are
being exercised and by paying in full the Option Price of the
shares at the time being acquired. Payment may be made in
cash, a check payable to the Corporation or, if the Committee
so determines, pursuant to rules adopted by the Committee, in
shares of Common Stock transferable to the Corporation and
having a Fair Market Value on the transfer date equal to the
amount payable to the Corporation. The date of exercise shall
be deemed to be the date the Corporation receives the written
notice and payment for the shares being purchased. A
Participant shall have none of the rights of a stockholder with
respect to shares covered by such Option until the Participant
becomes the record holder of such shares.
(g) Purchase for Investment. It is contemplated that
the Corporation will register shares sold to Participants
pursuant to the Plan under the Securities Act of 1933. In the
absence of an effective registration, however, a Participant
exercising an Option hereunder may be required to give a
representation that he/she is acquiring such shares as an
investment and not with a view to distribution thereof.
(h) Limitations on Incentive Stock Option Grants.
(i) An Incentive Stock Option shall be granted
only to an individual who, at the time the Option is granted,
does not own stock possessing more than 10 percent of the total
combined voting power of all classes of stock of the
Corporation or Subsidiaries.
(ii) The aggregate Fair Market Value of all
shares covered by the Incentive Stock Options granted to a
Participant by the Corporation and any of its Subsidiaries in
any calendar year prior to 1987 shall not exceed $100,000 plus
any unused limit carryover carried to such year. The unused
limit carryover shall be one-half of the amount by which
$100,000 exceeds the aggregate Fair Market Value of such stock
Options granted in any calendar year. The unused limit
carryover from any year is the amount of unused limit carryover
reduced by the amount of such carryover which was used in prior
calendar years. Such unused limit carryover may only be
carried over to each of the three calendar years succeeding the
year in which the limit carryover arises, and the amount of any
Options granted during any calendar year shall be treated as
first using up the $100,000 limitation and then shall be
treated as using up unused limit carryovers to such year in the
order of the calendar years in which such carryovers arose.
The aggregate Fair Market Value of such stock shall be
determined as of the time the Option is granted. This
paragraph 7(h)(ii) shall be construed in accordance with
subsection (b) of Section 422A of the Internal Revenue Code as
in effect on April 17, 1986.
(iii) With respect to Incentive Stock Options
granted on or after January 1, 1987, the aggregate Fair Market
Value of all shares with respect to which such Incentive Stock
Options are exercisable by a Participant for the first time
during any year shall not exceed $100,000. The aggregate Fair
Market Value of such shares shall be determined at the time the
Option is granted.
(i) Options for Nonresident Aliens. In the case of
any Option awarded to a Participant who is not a resident of
the United States or who is employed by a Subsidiary other than
a Subsidiary that is incorporated, or whose place of business
is, in a State of the United States, the Committee may (i)
waive or alter the conditions set forth in subsections 7(a)
through 7(h) to the extent that such action is necessary to
conform such Option to applicable foreign law, or (ii) take any
action, either before or after the award of such Option, which
it deems advisable to obtain approval of such Option by an
appropriate governmental entity; provided, however, that no
action may be taken hereunder if such action would (1)
materially increase any benefits accruing to any Participants
under the Plan, (2) materially increase the number of
securities which may be issued under the Plan, (3) materially
modify the requirements for eligibility to participate in the
Plan or (4) result in a failure to comply with applicable
provisions of the Securities Act of 1933, the Securities and
Exchange Act of 1934 or the Internal Revenue Code.
8. GOVERNMENT SERVICE, LEAVES OF ABSENCE AND OTHER
TERMINATIONS
(a) In the sole and absolute discretion of the
Committee, a Participation Share award may be considered to
reach maturity as of the close of the fiscal year in which (i)
a Participant enters such governmental or military service as
may be approved by the Committee or (ii) the Participant's
employment with the Corporation is terminated by reason of a
shutdown or divestiture of a portion of the Corporation's
business.
(b) A leave of absence approved by the Committee
shall not be deemed to be a termination of employment for the
purposes of the Plan. A termination of employment with the
Corporation or a Subsidiary to accept immediate reemployment
with the Corporation or a Subsidiary likewise shall not be
deemed to be a termination of employment for purposes of the
Plan.
9. SHARES SUBJECT TO THE PLAN
The number of shares of common Stock available for option
and sale under the Plan and the number of Participation Shares
which may be awarded shall not exceed 8,000,000 in the
aggregate, of which not more than 6,000,000 shall be available
for option and sale. If an Option ceases to be exercisable in
whole or in part by reason of expiration of time permitted for
its exercise, termination of employment of a Participant who
has been granted an Option, cancellation, surrender, or for any
other reason, the shares which had been subject to such Option
shall continue to be available for Options or Participation
Share awards under the Plan. The shares of Common Stock
subject to the Plan may consist in whole or in part of
authorized but unissued shares or of treasury shares, as the
Board of Directors may from time to time determine.
Participation Shares which are retired through forfeiture or
maturity shall again be available for awards of Participation
Shares or grants of Options under the Plan.
10. INDIVIDUAL LIMITS
The maximum number of Participation Shares or shares of
Common Stock covered by Options which may be granted to any
Participant shall be determined from time to time by the
Committee.
11. CHANGES IN CAPITALIZATION
In the event there are any changes in the Common Stock or
the capitalization of the Corporation through merger,
consolidation, reorganization, recapitalization, stock
dividend, stock split or other change in the corporate
structure, appropriate adjustments and changes may be made by
the Committee in (a) the aggregate number of shares subject to
the Plan, (b) the maximum number of shares for which Options of
Participation Shares may be granted or awarded to any
Participant, (c) the number of shares and the Option Price per
share of all shares of Common Stock subject to outstanding
Options, (d) the number of Participation Shares, the Base Value
per Participation Share awarded to Participants, and Dividend
Shares credited to Participants' Accounts, and (e) such other
provisions of the Plan as may be necessary and equitable to
carry out its purposes.
12. EFFECT ON OTHER PLANS
All payments and benefits under the Plan shall constitute
special compensation and shall not affect the level of benefits
provided to or received by any Participant (or the
Participant's estate or beneficiaries) as part of any employee
benefit plan of the Corporation or a Subsidiary. The Plan
shall not be construed to affect in any way a Participant's
rights and obligations under any other plan maintained by the
Corporation or a Subsidiary on behalf of employees.
13. TERM OF THE PLAN
The term of the Plan shall be six years, beginning April
17, 1986 and ending April 16, 1992, unless the Plan is
terminated sooner by action of the Board of Directors or
extended by action of the stockholders of the Corporation. No
Option may be granted or Participation Share awarded after the
termination date of the Plan, but Options and Participation
Shares theretofore granted or awarded shall continue in force
beyond that date pursuant to their terms.
14. GENERAL PROVISIONS
(a) Designated Beneficiary. Each Participant who
shall be granted a Participation Share award under the Plan may
designate a beneficiary or beneficiaries with the Committee on
a form to be prescribed by it; provided that no such
designation shall be effective unless so filed prior to the
death of such Participant.
(b) No Right of Continued Employment. Neither the
establishment of the Plan nor the payment of any benefits
hereunder nor any action of the Corporation, the Subsidiaries,
the Board of Directors of the Corporation or its Subsidiaries,
or the Committee shall be held or construed to confer upon any
person any legal right to be continued in the employ of the
Corporation or its Subsidiaries, and the Corporation and its
Subsidiaries expressly reserve the right to discharge any
Participant without liability to the Corporation, its
Subsidiaries, the Board of Directors of the Corporation or its
Subsidiaries or the Committee, except as to any rights which
may be expressly conferred upon a Participant under the Plan.
(c) Discretion of the Corporation, Board of Directors
and the Committee. Any decision made or action taken by the
Corporation, the Board of Directors of the Corporation or by
the Committee arising out of or in connection with the
construction, administration, interpretation and effect of the
Plan shall be within the absolute discretion of the
Corporation, the Board of Directors or the Committee, as the
case may be, and shall be conclusive and binding upon all
persons. Except as provided in the sentence immediately below,
the Committee shall determine in its sole discretion whether a
termination of employment for purposes of the Plan is caused by
disability, retirement or for other reasons. Any Participant
who is entitled to receive immediate payments under a qualified
retirement plan of the Corporation or a Subsidiary upon the
termination of his employment shall be deemed to be retired
under the Plan; provided, however, that any Participant who is
employed by a competitor of the Corporation or a Subsidiary
within one year after leaving the employ of the Corporation or
a Subsidiary shall not be considered, in the discretion of the
Committee, to be retired under the Plan.
(d) Modification of Awards. The Committee may in its
sole and absolute discretion, by written notice to a
Participant, (i) limit or eliminate the ability of the
Participant's Participation and Dividend Shares to generate
additional Dividend Shares, and/or (ii) fix the Book Value of
all or any portion of the Participant's existing Participation
and Dividend Shares for the purposes of any payments that might
be made under subsection 6(c) at their Book Value as of the end
of the fiscal year of the Corporation in which such notice is
dated, and/or (iii) limit the period in which an Option may be
exercised to a period ending at least three months following
the date of such notice, and/or (iv) limit or eliminate the
number of shares subject to Option after a period ending at
least three months following the date of such notice. The
Committee may credit Participation and Dividend Shares which
are affected under this subsection 14(d)(i) or (ii), with
interest at a rate and in a manner determined from time to time
by the Committee.
(e) No Segregation of Cash or Stock. The Accounts
established for Participants are merely a bookkeeping
convenience and neither the Corporation nor its Subsidiaries
shall be required to segregate any cash or stock which may at
any time be represented by awards. Nor shall anything provided
herein be construed as providing for such segregation. Neither
the Corporation, its Subsidiaries, the Board of Directors nor
the Committee shall, by any provisions of the Plan, be deemed
to be a trustee of any property, and the liability of the
Corporation or its Subsidiaries to any Participant pursuant to
the Plan shall be those of a debtor pursuant to such contract
obligations as are created by the Plan, and no such obligation
of the Corporation or its Subsidiaries shall be deemed to be
secured by any pledge or other encumbrance on any property of
the Corporation or its Subsidiaries.
(f) Inalienability of Benefits and Interest. Except
as provided in subsection 14(a), no benefit payable under or
interest in the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, and any such attempted action shall be
void and no such benefit or interest shall be in any manner
liable for or subject to debts, contracts, liabilities,
engagements, or torts of any Participant or beneficiary.
(g) Delaware Law to Govern. All questions pertaining
to the construction, regulation, validity and effect of the
provisions of the Plan shall be determined in accordance with
the laws of the State of Delaware.
(h) Change in Conditions of Federal Income Tax Laws.
In the event of relevant changes in the Federal income tax
laws, regulations and rulings or other factors affecting the
continued appropriateness of Participation Share awards or
Options under the Plan, the Committee may, in its sole
discretion, accelerate or change the form of payment,
distribution or exercise of such awards or Options. In
addition, the Committee shall have the power to take such
action as it deems necessary and desirable to amend the Plan
and any Options granted hereunder, for the purpose of
permitting the Participant to obtain favorable Federal income
tax treatment in connection with the Options or the disposition
of shares obtained through exercise of Options.
(i) Election to Receive Cash Rather than Stock. The
Committee, in its sole and absolute discretion, may allow
selected Participants the right to convert their unexercised
Options to a cash payment. For each such Option so converted,
the Participant shall be entitled to receive cash equal to the
difference between the Participant's Option Price and the fair
market value of the Common Stock on the date of conversion. In
order to make such a conversion, however, the Participant must
at the time of such conversion also elect to exercise an
equivalent number of Option shares for Common Stock on the same
date. Fair market value at the date of conversion shall be
defined as the reported closing price of Common Stock on the
day of conversion as reported on the composite list used by The
Wall Street Journal for reporting stock prices, or if no such
sale shall have been made on that day, on the last preceding
day on which there was such a sale.
(j) Election to Defer Receipt. Under rules
established by the Committee in its sole and absolute
discretion, the Committee may permit a Participant to elect to
defer the receipt of all or any portion of amounts which may
otherwise become payable under subsection 6(c). This election
shall be evidenced by a letter from the Participant to the
Committee, which letter shall be signed by the Participant and
accepted by the Committee before the Maturity Date. The period
of deferral specified in the letter shall be set forth in
accordance with the rules of the Committee and may extend to a
period following retirement. If accepted by the Committee,
such letter may provide that the amount otherwise payable to
the Participant shall be valued at the Maturity Date and earn
interest from that date at a rate and in a manner determined
from time to time by the Committee. After adjustment for any
resulting interest, the deferred amount shall be paid at the
date or dates specified in the Participant's letter, and such
adjusted amount shall not be subject to forfeiture as otherwise
provided in subsection 6(h). In the discretion of the
Committee, the balance of a Participant's deferred amount may
be paid earlier than the date or dates specified in the
Participant's letter, but only in the case of severe financial
hardship.
(k) Purchase of Common Stock. The Corporation and
its Subsidiaries may purchase from time to time shares of
Common Stock in such amounts as they may determine for purposes
of the Plan. The Corporation and its Subsidiaries shall have
no obligation to retain, and shall have the unlimited right to
sell or otherwise deal with for their own account, any shares
of Common Stock purchased pursuant to this paragraph.
(l) Use of Proceeds. The proceeds received by the
Corporation from the sale of Common Stock pursuant to the
exercise of Options shall be used for general corporate
purposes.
(m) Amendments. The Committee shall have the power
to amend the Plan and any Options or Participation Share awards
granted hereunder (i) for the purposes described in subsection
14(h) and (ii) to make administrative changes in the Plan which
are not material either individually or in the aggregate and
which do not increase the cost of the Plan to the Corporation
or alter the allocation of benefits as between the
Participants.
KIMBERLY-CLARK CORPORATION
1992 EQUITY PARTICIPATION PLAN
(as amended effective February 11, 1993)
1. PURPOSE
This 1992 Equity Participation Plan (the "Plan") of
Kimberly-Clark Corporation (the "Corporation") is intended to
aid in attracting and retaining highly qualified personnel and
to encourage those employees who materially contribute, by
managerial, scientific or other innovative means, to the
success of the Corporation or of a Subsidiary, to acquire an
ownership interest in the Corporation, thereby increasing their
motivation for and interest in the Corporation's or
Subsidiary's long-term success.
2. EFFECTIVE DATE
The Plan is effective as of April 24, 1992, upon (a)
approval by the Board and (b) approval by the stockholders of
the Corporation at the 1992 Annual Meeting.
3. DEFINITIONS
"Award" means an Award described in section 6 of this Plan.
"Award Agreement" means an agreement entered into between
the Corporation and a Participant setting forth the terms and
conditions applicable to the Award granted to the Participant.
"Board" means the Board of Directors of the Corporation.
"Code" means the Internal Revenue Code of 1986 and the
regulations thereunder, as amended from time to time.
"Committee" means the Compensation Committee of the Board,
provided that if the requisite number of members of the
Compensation Committee are not Disinterested Persons, the Plan
shall be administered by a committee, all of whom are
Disinterested Persons, appointed by the Board and consisting of
two or more directors with full authority to act in the matter.
The term "Committee" shall mean the Compensation Committee or
the committee appointed by the Board, as the case may be.
"Committee Rules" means the interpretative guidelines
approved by the Committee providing the foundation for
administration of this Plan.
"Common Stock" means the common stock, par value $1.25 per
share, of the Corporation and shall include both treasury
shares and authorized but unissued shares and shall also
include any security of the Corporation issued in substitution,
in exchange for, or in lieu of the Common Stock.
"Disinterested Person" means a person who is so defined for
purposes of rule 16b-3 under the Exchange Act, or any successor
provision.
"Exchange Act" means the Securities Exchange Act of 1934
and the regulations thereunder, as amended from time to time.
"Fair Market Value" means the reported closing price of the
Common Stock, on the relevant date as reported on the composite
list used by The Wall Street Journal for reporting stock
prices, or if no such sale shall have been made on that day, on
the last preceding day on which there was such a sale.
"Incentive Stock Option" means an Option which is so
defined for purposes of section 422A of the Code or any
successor section.
"Option" means a right to purchase a specified number of
shares of Common Stock at a fixed option price equal to no less
than 100% of the Fair Market Value of the Common Stock on the
date the Award is granted.
"Nonqualified Stock Option" means any Option which is not
an Incentive Stock Option.
"Participant" means an employee who the Committee selects
to participate in and receive Awards under the Plan
(collectively, the "Participants").
"Participation Shares" means the right, as described in
section 7, to receive an amount equal to the increase in book
value on a specified number of shares of Common Stock.
"Subsidiary" means any company in which the Corporation
owns a majority of the equity interest (collectively, the
"Subsidiaries").
4. ADMINISTRATION
The Plan and all Awards granted pursuant thereto shall be
administered by the Committee. The Committee, in its absolute
discretion, shall have the power to interpret and construe the
Plan and any Award Agreements. Any interpretation or
construction of any provisions of this Plan or the Award
Agreements by the Committee shall be final and conclusive upon
all persons. No member of the Board or the Committee shall be
liable for any action or determination made in good faith.
Within 60 days following the close of each calendar year that
the Plan is in operation, the Committee shall make a report to
the Board. The report shall specify the employees who received
Awards under the Plan during the prior year, the form and size
of the Awards to the individual employees, and the status of
prior Awards.
The Committee shall have the power to promulgate Committee
Rules and other guidelines in connection with the performance
of its obligations, powers and duties under the Plan, including
its duty to administer and construe the Plan and the Award
Agreements.
The Committee may authorize persons other than its members
to carry out its policies and directives subject to the
limitations and guidelines set by the Committee, except that:
(a) the authority to grant Awards shall not be delegated by the
Committee; (b) the authority to administer Awards with respect
to persons who are subject to section 16 of the Exchange Act
shall not be delegated by the Committee; and (c) any delegation
shall satisfy any other applicable requirements of rule 16b-3
of the Exchange Act, or any successor provision. Any person to
whom such authority is granted shall continue to be eligible to
receive Awards under the Plan.
5. ELIGIBILITY
The Committee shall from time to time select the Plan
Participants from those employees whom the Committee determines
either to be in a position to contribute materially to the
success of the Corporation or a Subsidiary, or to have in the
past so contributed. Only employees (including officers and
directors who are employees) of the Corporation and its
Subsidiaries are eligible to participate in the Plan.
6. FORMS OF AWARDS
All Awards under the Plan shall be made in the form of
Participation Shares or Options. The Committee may make Awards
solely in Options or Participation Shares, or in any
combination of the two. Notwithstanding anything in this Plan
to the contrary, any Awards shall contain the restriction on
assignability in section 15(f) of this Plan to the extent
required under rule 16b-3 of the Exchange Act.
7. PARTICIPATION SHARES
The Committee shall from time to time designate those
Participants who shall receive Participation Share awards. The
Committee shall advise such Participants of their Participation
Share awards by a letter indicating the number of Participation
Shares awarded and the following terms and conditions of the
award.
(a) Base Value of Participation Shares. The number
of Participation Shares awarded to a Participant shall be
entered in such Participant's memorandum account (the
"Account") established for this purpose as of the date of the
award. Each Participation Share shall be assigned a base value
equal to the book value of one share of Common Stock as of the
close of the fiscal year of the Corporation preceding the date
of the award (the "Base Value"). Book value per share shall be
defined for purposes of the Plan as common stockholders'
equity, as reported in the year-end audited consolidated
financial statements, or in the quarter-end unaudited
consolidated financial statements, of the Corporation (as the
case may be), divided by the number of shares of Common Stock
outstanding as of the date of such financial statements, as
adjusted pursuant to the provisions of the Plan (the "Book
Value"). The term "book value", when used without initial
capital letters, shall be defined as in the preceding sentence
without the adjustments.
(b) Maturation of Participation Shares. An Award of
Participation Shares shall reach maturity at the close of the
fiscal year (i) in which either the fifth or seventh
anniversary, as determined by the Committee when the Award is
granted, of the date the Award occurs, (ii) the Participant who
holds such Award dies, retires, or becomes totally and
permanently disabled, or (iii) the events described in
subsection 9(a) occur, whichever is earlier (the "Maturity
Date"). The Book Value at the Maturity Date shall be the Book
Value as of the close of the fiscal year of the Corporation in
which such Maturity Date occurs.
(c) Participation Share Payments. Each Participant
shall be entitled to receive a cash payment for his
Participation Share award, payable as provided in subsection
7(g), equal to the sum of the Maturity Value and the Dividend
Share Value.
The "Maturity Value" of an Award of Participation
Shares shall be equal to the Book Value of the Participation
Shares subject to such Award at the Maturity Date less the Base
Value of such Participation Shares.
Participants are not entitled to receive current
dividends on their Participation Shares, but in lieu thereof
their Accounts shall be credited with dividend shares (the
"Dividend Shares"). The "Dividend Share Value" of an award
shall be equal to the product of (A) the number of Dividend
Shares credited to a Participant's Account and (B) the Book
Value per share of the Common Stock at the Maturity Date. The
amount available for the acquisition of Dividend Shares for a
Participant's Account at the end of each fiscal quarter of the
Corporation shall be determined by multiplying the total cash
dividend declared per share of Common Stock during such quarter
(but subsequent to the date of the award in the case of
Participation Shares and subsequent to the date of crediting in
the case of Dividend Shares) by the total of the Participation
Shares and Dividend Shares in the Participant's Account. The
amount so determined shall be divided by the Book Value of one
share of Common Stock as of the close of such fiscal quarter,
and the quotient shall represent the number of full and
fractional Dividend Shares credited to the Participant's
Account for that quarter.
(d) Dividend Maintenance. No Dividend Shares shall
be credited to a Participant's Account in any quarter (i) in
which the total cash dividends declared per share of Common
Stock are less than $.41 or (ii) in which the total cash
dividends declared per share of Common Stock are less than the
total cash dividends declared per share of Common Stock in the
same quarter of the immediately preceding year, except that the
determination of whether the total cash dividends per share of
Common Stock are less than in the immediately preceding year
shall be made after adjustment for the two-for-one stock split
which occured in 1992 in accordance with generally accepted
accounting principles. When total cash dividends declared per
share of Common Stock are less than total cash dividends
declared per share of Common Stock in the same quarter of the
immediately preceding year as described above, the book value
of each Participation Share held by a Participant shall be
reduced by an amount equal to the difference between the cash
dividend declared in such immediately preceding quarter less
the cash dividend declared in the quarter the cash dividend is
reduced. This subsection 7(d) shall be inoperative during such
fiscal years of the Corporation as the Committee in its
discretion shall determine.
(e) Adjustments. The Committee may adjust Book
Value, for purposes of the Plan, to preserve the benefit to the
Participant and the Corporation contemplated hereby if, in the
opinion of the Committee after consultation with the
Corporation's independent accountants, changes in the
Corporation's accounting policies, acquisitions, divestitures
or other unusual or extraordinary transactions or events have
materially affected the Corporation's net income, book value,
shares of Common Stock outstanding, or stockholders' equity
(collectively, the "Events"), provided that any decisions or
actions of the management of the Corporation which resulted in
an Event were made or taken in the best interests of the
Corporation's stockholders. To preserve the benefit to the
Participant and the Corporation contemplated hereby, if a cash
dividend is declared in any quarter and the payment date for
such cash dividend is later than the immediately subsequent
quarter, then such cash dividend will be deemed to be declared
in the quarter immediately preceding the payment date for all
purposes of this Plan, as of the first date the Board meets in
such quarter, or if the Board does not meet in such quarter, on
the first business day of such quarter, including, but not
limited to, the determination of (i) Book Value in subsection
7(a), (ii) Dividend Shares in subsection 7(c) and (iii) whether
the total cash dividends declared per share of Common Stock in
a quarter is less than $.41 or whether the total cash dividends
declared per share of Common Stock are less than the total cash
dividends declared per share of Common Stock in the same
quarter of the immediately preceding year in subsection 7(d).
(f) Absence of Rights as a Stockholder. A
Participant shall not be entitled, on the basis of a
Participation Share award, to any of the rights of a
stockholder of the Corporation, including the right to vote and
receive dividends on Common Stock.
(g) Date of Payment. Except as provided in
subsection 15(j), the cash payment provided for in subsection
7(c) shall be payable within 90 days following the Maturity
Date.
(h) Termination of Employment. Except as provided in
subsections 9(a) and 15(j) any Participation or Dividend Shares
credited to a Participant's Account shall be subject to
forfeiture if the Participant is dismissed or leaves the
service of the Corporation or a Subsidiary prior to the
maturity of the award for any reason other than death,
retirement or total and permanent disability.
(i) Termination of Award. After the Corporation
makes the cash payment provided for in subsection 6(c), any
rights of the Participant (or the Participant's estate or
beneficiaries) in the Participation Share award shall end.
8. STOCK OPTIONS
The Committee shall determine and designate from time to
time those Participants to whom Options are to be granted and
the number of shares of Common Stock to be optioned to each.
Such Options may be in the form of Incentive Stock Options or
in the form of Nonqualified Stock Options. After granting an
Option to a Participant, the Committee shall cause to be
delivered to the Participant an Award Agreement evidencing the
granting of the Option. The Award Agreement shall be in such
form as the Committee shall from time to time approve. The
terms and conditions of all Options granted under the Plan need
not be the same, but all Options must meet the applicable terms
and conditions specified in subsections 8(a) through 8(h).
(a) Period of Option. The Period of each Option
shall be no more than 10 years from the date it is granted.
(b) Option Price. The Option price shall be
determined by the Committee, but shall not in any instance be
less than the Fair Market Value of the Common Stock at the time
that the Option is granted (the "Option Price").
(c) Limitations on Exercise. The Option shall not be
exercisable until at least one year has expired after the
granting of the Option, during which time the Participant shall
have been in the continuous employ of the Corporation or a
Subsidiary. At any time during the period of the Option after
the end of the first year, the Participant may purchase up to
30 percent of the shares covered by the Option; after the end
of the second year, an additional 30 percent; and after the end
of the third year, the remaining 40 percent of the total number
of shares covered by the Option; provided, however, that if the
Participant's employment is terminated for any reason other
than death, retirement, or total and permanent disability, the
Option shall be exercisable only for three months following
such termination and only for the number of shares of Common
Stock which were exercisable on the date of such termination.
In no event, however, may an Incentive Stock Option be
exercised more than 10 years, and in no event may a
Nonqualified Stock Option be exercised more than 10 years and
one day, after the date of its grant.
(d) Exercise after Death, Retirement, or Disability.
If a Participant dies, retires or becomes totally and
permanently disabled without having exercised the Option in
full, the remaining portion of such Option may be exercised,
without regard to the limitations in subsection 8(c), within
(i) three years from the date of any such event or (ii) the
remaining period of the Option, whichever is earlier. Upon a
Participant's death, the Option may be exercised by the person
or persons to whom such Participant's rights under the Option
shall pass by will or by applicable law or, if no such person
has such rights, by his executor or administrator.
(e) Non-transferability. During the Participant's
lifetime, Options shall be exercisable only by such
Participant. Options shall not be transferable other than by
will or the laws of descent and distribution upon the
Participant's death.
(f) Exercise; Notice Thereof. Options shall be
exercised by delivering to the Corporation, at the office of
the Treasurer at the World Headquarters, written notice of the
number of shares with respect to which Option rights are being
exercised and by paying in full the Option Price of the shares
at the time being acquired. Payment may be made in cash, a
check payable to the Corporation or, if the Committee so
determines, pursuant to the Committee Rules, in shares of
Common Stock transferable to the Corporation and having a Fair
Market Value on the transfer date equal to the amount payable
to the Corporation. The date of exercise shall be deemed to be
the date the Corporation receives the written notice and
payment for the shares being purchased. A Participant shall
have none of the rights of a stockholder with respect to shares
covered by such Option until the Participant becomes the record
holder of such shares.
(g) Purchase for Investment. It is contemplated that
the Corporation will register shares sold to Participants
pursuant to the Plan under the Securities Act of 1933. In the
absence of an effective registration, however, a Participant
exercising an Option hereunder may be required to give a
representation that he/she is acquiring such shares as an
investment and not with a view to distribution thereof.
(h) Limitations on Incentive Stock Option Grants.
(i) An Incentive Stock Option shall be granted
only to an individual who, at the time the Option is granted,
does not own stock possessing more than 10 percent of the total
combined voting power of all classes of stock of the
Corporation or Subsidiaries.
(ii) The aggregate Fair Market Value of all
shares with respect to which Incentive Stock Options are
exercisable by a Participant for the first time during any year
shall not exceed $100,000. The aggregate Fair Market Value of
such shares shall be determined at the time the Option is
granted.
(i) Options for Nonresident Aliens. In the case of
any Option awarded to a Participant who is not a resident of
the United States or who is employed by a Subsidiary other than
a Subsidiary that is incorporated, or whose place of business
is, in a State of the United States, the Committee may (i)
waive or alter the conditions set forth in subsections 8(a)
through 8(h) to the extent that such action is necessary to
conform such Option to applicable foreign law, or (ii) take any
action, either before or after the award of such Option, which
it deems advisable to obtain approval of such Option by an
appropriate governmental entity; provided, however, that no
action may be taken hereunder if such action would (1)
materially increase any benefits accruing to any Participants
under the Plan, (2) materially increase the number of
securities which may be issued under the Plan, (3) materially
modify the requirements for eligibility to participate in the
Plan or (4) result in a failure to comply with applicable
provisions of the Securities Act of 1933, the Exchange Act or
the Code.
9. GOVERNMENT SERVICE, LEAVES OF ABSENCE AND OTHER
TERMINATIONS
(a) In the sole and absolute discretion of the
Committee, a Participation Share award may be considered to
reach maturity as of the close of the fiscal year in which (i)
a Participant enters such governmental or military service as
may be approved by the Committee or (ii) the Participant's
employment with the Corporation or a Subsidiary is terminated
by reason of a shutdown or divestiture of all or a portion of
the Corporation's or its Subsidiary's business.
(b) A leave of absence approved by the Committee
shall not be deemed to be a termination of employment for
purposes of the Plan. A termination of employment with the
Corporation or a Subsidiary to accept immediate reemployment
with the Corporation or a Subsidiary likewise shall not be
deemed to be a termination of employment for purposes of the
Plan.
10. SHARES SUBJECT TO THE PLAN
The number of shares of Common Stock available with respect
to all Awards granted under this Plan shall not exceed
10,000,000 in the aggregate, of which not more than 10,000,000
shall be available for option and sale, subject to the
adjustment provision set forth in section 12 hereof. If an
Option ceases to be exercisable in whole or in part by reason
of expiration of time permitted for its exercise, termination
of employment of a Participant who has been granted an Option,
cancellation, surrender, or for any other reason, the shares
which had been subject to such Option shall continue to be
available for Awards under the Plan. The shares of Common
Stock subject to the Plan may consist in whole or in part of
authorized but unissued shares or of treasury shares, as the
Board may from time to time determine. Participation Shares
which are retired through forfeiture or maturity shall again be
available for awards of Participation Shares or grants of
Options under the Plan.
11. INDIVIDUAL LIMITS
The maximum number of Participation Shares or shares of
Common Stock covered by Options which may be granted to any
Participant shall be determined from time to time by the
Committee.
12. CHANGES IN CAPITALIZATION
In the event there are any changes in the Common Stock or
the capitalization of the Corporation through merger,
consolidation, reorganization, recapitalization, stock
dividend, stock split or other change in the corporate
structure, appropriate adjustments and changes may be made by
the Committee in (a) the aggregate number of shares subject to
the Plan, (b) the maximum number of shares for which Options of
Participation Shares may be granted or awarded to any
Participant, (c) the number of shares and the Option Price per
share of all shares of Common Stock subject to outstanding
Options, (d) the number of Participation Shares, the Base Value per
Participation Share awarded to Participants, and Dividend
Shares credited to Participants' Accounts, and (e) such other
provisions of the Plan as may be necessary and equitable to
carry out its purposes.
13. EFFECT ON OTHER PLANS
All payments and benefits under the Plan shall constitute
special compensation and shall not affect the level of benefits
provided to or received by any Participant (or the
Participant's estate or beneficiaries) as part of any employee
benefit plan of the Corporation or a Subsidiary. The Plan
shall not be construed to affect in any way a Participant's
rights and obligations under any other plan maintained by the
Corporation or a Subsidiary on behalf of employees.
14. TERM OF THE PLAN
The term of the Plan shall be ten years, beginning April
24, 1992, and ending April 23, 2002, unless the Plan is
terminated or extended by action of the Committee. No Option
may be granted or Participation Share awarded after the
termination date of the Plan, but Options and Participation
Shares theretofore granted or awarded shall continue in force
beyond that date pursuant to their terms.
15. GENERAL PROVISIONS
(a) Designated Beneficiary. Each Participant who
shall be granted a Participation Share award under the Plan may
designate a beneficiary or beneficiaries with the Committee on
a form to be prescribed by it; provided that no such
designation shall be effective unless so filed prior to the
death of such Participant.
(b) No Right of Continued Employment. Neither the
establishment of the Plan nor the payment of any benefits
hereunder nor any action of the Corporation, the Subsidiaries,
the Board of Directors of the Corporation or its Subsidiaries,
or the Committee shall be held or construed to confer upon any
person any legal right to be continued in the employ of the
Corporation or its Subsidiaries, and the Corporation and its
Subsidiaries expressly reserve the right to discharge any
Participant without liability to the Corporation, its
Subsidiaries, the Board of Directors of the Corporation or its
Subsidiaries or the Committee, except as to any rights which
may be expressly conferred upon a Participant under the Plan.
(c) Discretion of the Corporation, Board and the
Committee. Any decision made or action taken by the
Corporation, the Board or by the Committee arising out of or in
connection with the construction, administration,
interpretation and effect of the Plan shall be within the
absolute discretion of the Corporation, the Board or the
Committee, as the case may be, and shall be conclusive and
binding upon all persons. Except as provided in the sentence
immediately below, the Committee shall determine in its sole
discretion whether a termination of employment for purposes of
the Plan is caused by disability, retirement or for other
reasons.
(d) Modification of Awards. The Committee may in its
sole and absolute discretion, by written notice to a
Participant, (i) limit or eliminate the ability of the
Participant's Participation and Dividend Shares to generate
additional Dividend Shares, and/or (ii) fix the Book Value of
all or any portion of the Participant's existing Participation
and Dividend Shares for the purposes of any payments that might
be made under subsection 7(c) at their Book Value as of the end
of the fiscal year of the Corporation in which such notice is
dated, and/or (iii) limit the period in which an Option may be
exercised to a period ending at least three months following
the date of such notice, and/or (iv) limit or eliminate the
number of shares subject to Option after a period ending at
least three months following the date of such notice. The
Committee may credit Participation and Dividend Shares which
are affected under this subsection 15(d)(i) or (ii), with
interest at a rate and in a manner determined from time to time
by the Committee.
(e) No Segregation of Cash or Stock. The Accounts
established for Participants are merely a bookkeeping
convenience and neither the Corporation nor its Subsidiaries
shall be required to segregate any cash or stock which may at
any time be represented by Awards. Nor shall anything provided
herein be construed as providing for such segregation. Neither
the Corporation, its Subsidiaries, the Board nor the Committee
shall, by any provisions of the Plan, be deemed to be a trustee
of any property, and the liability of the Corporation or its
Subsidiaries to any Participant pursuant to the Plan shall be
those of a debtor pursuant to such contract obligations as are
created by the Plan, and no such obligation of the Corporation
or its Subsidiaries shall be deemed to be secured by any pledge
or other encumbrance on any property of the Corporation or its
Subsidiaries.
(f) Inalienability of Benefits and Interest. Except
as provided in subsection 15(a), no benefit payable under or
interest in the Plan shall be subject in any manner to
anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, and any such attempted action shall be
void and no such benefit or interest shall be in any manner
liable for or subject to debts, contracts, liabilities,
engagements, or torts of any Participant or beneficiary.
(g) Delaware Law to Govern. All questions pertaining
to the construction, regulation, validity and effect of the
provisions of the Plan shall be determined in accordance with
the laws of the State of Delaware.
(h) Change in Conditions of Federal Income Tax Laws.
In the event of relevant changes in the Federal income tax
laws, regulations and rulings or other factors affecting the
continued appropriateness of Awards under the Plan, the
Committee may, in its sole discretion, accelerate or change the
form of payment, distribution or exercise of such Awards. In
addition, the Committee shall have the power to take such
action as it deems necessary and desirable to amend the Plan
and any Options granted hereunder, for the purpose of
permitting the Participant to obtain favorable Federal income
tax treatment in connection with the Options or the disposition
of shares obtained through exercise of Options.
(i) Election to Receive Cash Rather than Stock. The
Committee, in its sole and absolute discretion, may allow
selected Participants the right to convert their unexercised
Options to a cash payment. For each such Option so converted,
the Participant shall be entitled to receive cash equal to the
difference between the Participant's Option Price and the Fair
Market Value of the Common Stock on the date of conversion. In
order to make such a conversion, however, the Participant must
at the time of such conversion also elect to exercise an
equivalent number of Option shares for Common Stock on the same
date.
(j) Election to Defer Receipt. The Committee Rules
may, in the Committee's sole and absolute discretion, permit a
Participant to elect to defer the receipt of all or any portion
of amounts which may otherwise become payable under subsection
7(c). This election shall be evidenced by a letter from the
Participant to the Committee, which letter shall be signed by
the Participant and accepted by the Committee before the
Maturity Date. The period of deferral specified in the letter
shall be set forth in accordance with the Committee Rules and
may extend to a period following retirement. If accepted by
the Committee, such letter may provide that the amount
otherwise payable to the Participant shall be valued at the
Maturity Date and earn interest from that date at a rate and in
a manner determined from time to time by the Committee. After
adjustment for any resulting interest, the deferred amount
shall be paid at the date or dates specified in the
Participant's letter, and such adjusted amount shall not be
subject to forfeiture as otherwise provided in subsection 7(h).
In the discretion of the Committee, the balance of a
Participant's deferred amount may be paid earlier than the date
or dates specified in the Participant's letter, but only in the
case of severe financial hardship.
(k) Purchase of Common Stock. The Corporation and
its Subsidiaries may purchase from time to time shares of
Common Stock in such amounts as they may determine for purposes
of the Plan. The Corporation and its Subsidiaries shall have
no obligation to retain, and shall have the unlimited right to
sell or otherwise deal with for their own account, any shares
of Common Stock purchased pursuant to this paragraph.
(l) Use of Proceeds. The proceeds received by the
Corporation from the sale of Common Stock pursuant to the
exercise of Options shall be used for general corporate
purposes.
(m) Withholding. The Committee may require the
withholding of all taxes as required by law. In the case of
payments of Awards in shares of Common Stock or other
securities, withholding shall be as required by law and in the
Committee Rules.
(n) Amendments. The Committee may at any time amend,
suspend, or discontinue the Plan or alter or amend any or all
Award Agreements under the Plan to the extent permitted by law
and the rules of any stock exchange on which the Common Stock
or any other security of the Corporation or its subsidiaries is
listed; provided, however, that no action may be taken
hereunder if such action would (1) materially increase any
benefits accruing to any Participants under the Plan, (2)
materially increase the number of securities which may be
issued under the Plan, (3) materially modify the requirements
for eligibility to participate in the Plan or (4) result in a
failure to comply with applicable provisions of the Securities
Act of 1933, the Exchange Act (including the rules and
regulations promulgated thereunder) or the Code.
Notwithstanding the foregoing, in the event of relevant changes
in rule 16b-3 of the Exchange Act, or in the interpretation
thereof by appropriate governmental bodies, the Committee may,
in its sole discretion, take such action as it deems necessary
and desirable to amend, suspend, or discontinue the Plan or
alter or amend any or all Award Agreements under the Plan to
the extent permitted by rule 16b-3 of the Exchange Act. Except
as provided in subsections 8(i), 15(d), and 15(h), no such
amendment, suspension, or termination of the Plan shall,
without the consent of the Participant, adversely alter or
change any of the rights or obligations under any Awards or
other rights previously granted the Participant under the Plan.
However, the Committee may not take any action without approval
of the Corporation's stockholders if such approval is required
by law, rule 16b-3 of the Exchange Act, or the rules of any
stock exchange on which the Common Stock or any other security
of the Corporation or its Subsidiaries are listed.
KIMBERLY-CLARK CORPORATION
DEFERRED COMPENSATION PLAN
I. PURPOSE
The purpose of this Kimberly-Clark Corporation Deferred
Compensation Plan is to permit a select group of management or
highly compensated employees of Kimberly-Clark Corporation and its
subsidiaries to defer income which would otherwise become payable
to them.
II. DEFINITIONS AND CERTAIN PROVISIONS
2.1 "Agreement" means the Plan Agreement(s) executed between
a Participant and the Company, whereby a Participant agrees
to defer a portion of his Salary or Bonus, or both, pursuant to
the provisions of the Plan, and the Company agrees to make
benefit payments in accordance with the provisions of the Plan.
In the event the terms of the Agreement conflict with the terms
of the Plan, the terms of the Plan shall be controlling.
2.2 "Beneficiary" means the person or persons who under this Plan
becomes entitled to receive a Participant's interest in the
event of the Participant's death.
2.3 "Board of Directors" means the Board of Directors of the
Company.
2.4 "Bonus" means any amount(s) paid during a calendar year to
the Participant under the Company's Management Achievement
Award Program.
2.5 A "Change of Control" of the Company 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 Company having
20% or more of the total number of votes that may be cast for
the election of Directors of the Company; 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 Company before the
Transaction shall cease to constitute a majority of the Board of
Directors of the Company or any successor to the Company.
2.6 "Code" means the Internal Revenue Code for 1986, as
amended and any lawful regulations or other pronouncements
promulgated thereunder.
2.7 "Committee" means the Retirement Trust Committee named
under the Kimberly-Clark Corporation Salaried Employers'
Retirement Plan.
2.8 "Company" means Kimberly-Clark Corporation, a Delaware
corporation, and its subsidiaries and any successor in interest.
For purposes of the Plan, a subsidiary is a corporation, 50%
or more of the voting shares of which are owned directly or
indirectly by the Company, which is incorporated under the
laws of one of the states of the United States.
2.9 "Compensation Committee" means the Compensation
Committee of the Board of Directors.
2.10 "Deferral Year" means any calendar year, 1995 through 2000.
For purposes of 1994, Deferral Year means the Effective Date
of the Plan through December 31, 1994.
2.11 "Deferred Benefit Account" means the cumulative total dollar
amount that a Participant elects to defer in the Agreement,
including gains and losses pursuant to Section 3 as maintained
on the books of the Company for a Participant under this Plan.
A Participant's Deferred Benefit Account shall not constitute
or be treated as a trust fund of any kind.
2.12 "Determination Date" means the date on which the amount of
a Participant's Deferred Benefit Account is determined as
provided in Article III hereof. The last day of each calendar
quarter shall be a Determination Date.
2.13 "Disability" shall have the same meaning as the phrase
"Totally and Permanently Disabled" under the Kimberly-Clark
Corporation Salaried Employees' Retirement Plan. The
determination of a Participant's having become Disabled shall
be made by the Retirement Committee of the Kimberly-Clark
Corporation Salaried Employees' Retirement Plan.
2.14 "Effective Date" means October 1, 1994.
2.15 "IIP" means the Kimberly-Clark Corporation Salaried
Employees Incentive Investment Plan and the Kimberly-Clark
Corporation Hourly Employees Incentive Investment Plan,
collectively.
2.16 "Investment Grade" means a bond rating of BBB minus, or its
equivalent, by one of the nationally recognized rating agencies.
2.17 "Participant" means an employee of the Company, or its
subsidiaries or affiliated companies, who is eligible to
participate in the Plan pursuant to Article III, who has
executed an Agreement with the Company, and who has commenced
Salary or Bonus, or both Salary and Bonus, reductions pursuant
to such Agreement.
2.18 "Plan" means the Kimberly-Clark Corporation Deferred
Compensation Plan as amended from time to time.
2.19 "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 Company.
2.20 "Salary" means the Participant's base salary which would be
received during a calendar year if no election to defer were
made, including any 401(k) Contributions under the IIP or pre-
tax contributions under the Company's Flexible Benefit Plan.
2.21 "Termination of Service" means the Participant's cessation of
his service with the Company for any reason whatsoever,
whether voluntarily or involuntarily, including by reason of
retirement, death, or Disability.
2.22 "Tier 1 Participants" shall include the Chief Executive Officer
and all elected officers of the Company who report directly to
the Chief Executive Officer.
2.23 "Tier 2 Participants" shall include all employees of the
Company (excluding Tier 1 Participants) whose Salary at the
beginning of the Deferral Year is greater than the considered
compensation limit pursuant to Section 401(a)(17) of the Code.
For the 1994 Deferral Year, the considered compensation limit
is $150,000.
2.24 "Years of Service" shall have the same meaning as defined
under the Kimberly-Clark Corporation Salaried Employees'
Retirement Plan.
III. PARTICIPATION AND COMPENSATION REDUCTION
3.1 Participation. Participation in the Plan shall be limited to
employees of the Company who are either a Tier 1 Participant
or a Tier 2 Participant and who elect to participate in the Plan
by filing an Agreement with the Committee prior to the first
day of the deferral period in which a Participant's participation
commences in the Plan. The election to participate shall be
effective upon receipt by the Committee of the Agreement that
is properly completed and executed in conformity with the
Plan.
3.2 Minimum and Maximum Deferral and Length of Participation.
Tier 1 Participants - A Tier 1 Participant may elect to defer
any amount of his Salary or Bonus, or both, to the extent that
any portion of such amounts would not be deductible by the
Company pursuant to Section 162(m) of the Code. In addition,
a Tier 1 Participant may elect to defer an amount of Salary or
Bonus, or both, to the extent that the total of any such amounts
would not exceed the dividend distributed under Section 7.12
of the IIP during a Deferral Year. The amount of Salary
which may be deferred related to the dividend payment from
the IIP during a Deferral Year shall be equal to 25% to 100%
(in 25% increments) of the IIP dividend received. A Tier 1
Participant may also elect to defer up to 100% of his Bonus
paid during a Deferral Year in 25% increments.
Tier 2 Participants - A Tier 2 Participant may elect to defer an
amount of his Bonus up to the dividend distributed under
Section 7.12 of the IIP during a Deferral Year. The amount
of Bonus which may be deferred related to the dividend
payment from the IIP shall be equal to 25% to 100% (in 25%
increments) of the IIP dividend received. A Tier 2 Participant
may not defer any part of his Salary pursuant to this Plan.
In no event may the amount of a Participant's deferral be less
than $5,000 in any Deferral Year during which a Participant
has elected to defer a portion of his Salary or Bonus, or both.
The deferral opportunity shall extend through December 31,
2000. A Participant shall make an annual election for the
upcoming Deferral Year in the year preceding the Deferral
Year for which the election is being made. Except as provided
in Section 3.5, "Emergency Benefit: Waiver of Deferral," any
election so made shall be irrevocable with respect to Salary and
Bonus applicable to that Deferral Year.
3.3 Timing of Deferral Credits. The amount of Salary or Bonus,
or both that a Participant elects to defer in the Agreement shall
cause an equivalent reduction in the Participant's Salary and
Bonus, respectively. Deferrals shall be credited throughout
each Deferral Year as the Participant is paid the non-deferred
portion of Salary and Bonus for such Deferral Year.
3.4 New Participants. Subsequent to October 1, 1994, an
individual who is hired into a position which satisfies the
requirements of a Tier 1 Participant or a Tier 2 Participant
shall be eligible to participate in the Plan thirty (30) days
after satisfying the criteria for participation. The eligible
employee shall be bound by all terms and conditions of the Plan,
provided, however, that his Agreement must be filed no later
than thirty (30) days following his eligibility to participate.
Employees who satisfy the criteria of a Tier 1 Participant or a
Tier 2 Participant as a result of a promotion or Salary increase
will be eligible to participate in the Plan beginning on January
1st of the calendar year following eligibility.
3.5 Emergency Benefit: Waiver of Deferral. In the event that the
Committee, upon written petition of the Participant or his
Beneficiary, determines in its sole discretion, that the
Participant or his Beneficiary has suffered an unforeseeable
financial emergency, the Company shall pay to the Participant
or his Beneficiary as soon as possible following such
determination, an amount from the Participant's Deferred
Benefit Account not in excess of the amount necessary to
satisfy the emergency. For purposes of this Plan, an
"unforeseeable financial emergency" is an unanticipated
emergency that is caused by an event beyond the control of the
Participant or Beneficiary and that would result in severe
financial hardship to the individual if the emergency
distribution were not permitted. Cash needs arising from
foreseeable events, such as the purchase of a residence or
education expenses for children shall not be considered the
result of an unforeseeable financial emergency. For purposes
of this Plan, an "unforeseeable financial emergency" is limited
to an event described in Treasury Regulation section 1.401(k)-
1(d)(2)(iv)(A)(1) or (4). For purposes of this Plan, a
distribution is in "the amount necessary to satisfy the
emergency" only if the requirements of Treasury Regulation
section 1.401(k)-1(d)(2)(iv)(B) are satisfied. The Committee
shall also grant a waiver of the Participant's agreement to
defer a stated amount of Salary and Bonus upon finding that the
Participant has suffered an unforeseeable financial emergency.
The waiver shall be for such period of time as the Committee
deems necessary under the circumstances to relieve the
hardship.
3.6 Crediting of Earnings - As of the close of business on each
Determination Date the designated Deferred Benefit Account of
each Participant shall be valued and adjusted to preserve for
each Participant his proportionate interest in the related funds
as if such accounts held actual assets and such assets were
among such investment funds as the Participant, retired
Participant or Beneficiary elected pursuant to Section 3.8. As
of each Determination Date the Deferred Benefit Accounts of
each Participant shall be adjusted to reflect the effect of
income, collected and accrued, realized and unrealized profits
and losses, expenses which would have been incurred in
connection with the sale, investment and reinvestment of the
investment funds (such as brokerage, postage, express and
insurance charges and transfer taxes), and all other transactions
with respect to the related fund as follows:
(a) The current market value of the assets which would
have been held in each of the funds shall be determined
by the Committee, and
(b) The separate balances of each Participant's Deferred
Benefit Accounts under each of the related funds shall
be adjusted by multiplying by the ratio that the current
market value of such funds as determined above bears
to the aggregate of the Deferred Benefit Account
balances which would have been held under such fund
if such fund held actual assets.
The current market value shall be fair market value on the
Determination Date as determined by the Committee in
accordance with generally accepted valuation principles applied
on a consistent basis. Each Participant's Deferred Benefit
Account shall then be appropriately credited with his deferred
amounts as set forth in Section 3.7.
3.7 Determination of Account. The balance of each Participant's
Deferred Benefit Account as of each Determination Date shall
be calculated as follows, using the terms and methods in the
order defined below:
(a) Beginning Balance:
The balance on the beginning of the first day of
the quarter. This equals the Ending Balance as
of the end of the day on the prior Determination
Date.
(b) Sub-Ending Balance:
The Beginning Balance, less any distributions
made after the prior Determination Date and up
through and including the current Determination
Date.
(c) Investment Earnings:
Investment earnings, gains and losses determined
pursuant to Section 3.6 will be credited to each
Participant's Deferred Benefit Account as of
each Determination Date.
(d) Participant Deferrals and Interest:
Participant deferrals made after the prior Determination
Date and up through and including the current
Determination Date, plus interest from the date credited
pursuant to Section 3.3 through such Determination
Date at a rate yielding interest equivalent to the per
annum secondary market discount rate for six-month
U.S. Treasury Bills as published by the Federal Reserve
Board for the calendar week ending prior to January 1
(for interest to be credited for either of the two
subsequent fiscal quarters ending March 31 or June 30)
or prior to July 1 (for interest to be credited for
either of the subsequent fiscal quarters ending on
September 30 or October 31).
(e) Ending Balance:
The Sub-Ending Balance plus investment
earnings, gains and losses and Participant
Deferrals and Interest.
3.8 Investment Funds and Elections - Participants, retired
Participants, and Beneficiaries may elect that their Deferred
Benefit Account be credited with earnings, gains and losses as
if such accounts held actual assets and such assets were among
such investment funds as the Company may designate. Any
such direction of investment shall be subject to such rules as
the Company and the Committee may prescribe, including,
without limitation, rules concerning the manner of providing
investment directions, the frequency of changing such
investment directions, and method of crediting earnings, gains
and losses for any portion of a Deferred Benefit Account which
is not covered by any valid investment directions. The
investment funds which the Company may designate shall
include but not be limited to the following types of funds,
which can be managed on an individual basis or as part of a
mutual fund, as the Company shall determine:
(a) money market funds;
(b) common stock funds;
(c) bond funds;
(d) balanced funds;
(e) investment funds which are primarily invested in
insurance contracts; and
(f) investment funds which are provided for under
insurance contracts.
The Company shall have the sole discretion to determine the
number of investment funds to be designated hereunder and the
nature of the funds and may change or eliminate the investment
funds provided hereunder from time to time. The Committee
shall determine the rate of earnings, gains and losses to be
credited to Participant's Deferred Benefit Accounts under this
Plan with respect to any such investment fund for any period,
taking into account the return, net of any expenses which
would have been incurred in connection with the sale,
investment and reinvestment of the investment funds (such as
brokerage, postage, express and insurance charges and transfer
taxes), of such investment funds for such period.
3.9 Reallocations. A Participant may elect to reallocate, effective
as of the first Determination Date following his election, all or
any whole percentage portion of his Deferred Benefit Account.
3.10 Vesting of Deferred Benefit Account. A Participant shall be
100 percent vested in his Deferred Benefit Account equal to the
amount of Salary and Bonus he deferred into the Deferred
Benefit Account and the earnings, gains or losses credited
thereon.
IV. BENEFITS
4.1 Inservice Distribution. At the time a Participant executes an
Agreement, he may elect to receive a return of his deferrals.
The amount of the return of deferral shall be equal to the lesser
of the amount deferred in a specific year or the Participant's
Deferred Benefit Account. Each such return of deferral shall
be made in a lump sum as soon as administratively feasible on
or after the last business day of October of the fifth, tenth or
fifteenth year following the year in which the deferral is
earned, provided that the Participant continues in the employ
of the Company, its subsidiary or affiliated company until such
date. Once the Participant elects to receive his return of
deferral, the election shall be irrevocable. A return of
deferral pursuant to this Section 4.1 shall only be paid
prior to a Participant's Termination of Service. Any return
of deferral paid shall be deemed a distribution, and shall be
deducted from the Participant's Deferred Benefit Account. A
separate return of deferrals election shall be made for each
Deferral Year.
4.2 Retirement Benefit. Subject to Section 4.6 below, upon a
Participant's Retirement Date, he shall be entitled to receive
the amount of his Deferred Benefit Account. The form of
benefit payment, and the commencement of such benefit, shall
be as provided in Section 4.6.
4.3 Termination Benefit. Upon the Termination of Service of a
Participant prior to his Retirement Date, for reasons other than
death or Disability, the Company shall pay to the Participant,
a benefit equal to his Deferred Benefit Account.
Unless otherwise directed by the Committee, the termination
benefit shall be payable in a lump sum as set forth in Section
4.11 following the Participant's Termination of Service. Upon
a Termination of Service, the Participant shall immediately
cease to be eligible for any other benefit provided under this
Plan.
4.4 Death Benefits. Upon the death of a Participant or a retired
Participant, the Beneficiary of such Participant shall receive
the Participant's remaining Deferred Benefit Account. Payment
of a Participant's remaining Deferred Benefit Account shall be
in accordance with Section 4.6.
4.5 Disability. In the event of a Termination of Service due to
Disability prior to his Retirement Date, a disabled Participant
shall receive his remaining Deferred Benefit Account. Payment
of a Participant's remaining Deferred Benefit Account shall be
in accordance with Section 4.6.
4.6 Form of Benefit Payment.
(a) Upon the happening of an event described in Sections
4.1, 4.2, 4.3, 4.4, or 4.5, the Company 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 4.2, 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 discretion, grant the Participant's request.
(c) In the event of the death of the Participant, as
described in Section 4.4, the Participant's
Beneficiary may, with the consent of the Committee,
elect an installment 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 discretion, grant such Beneficiary's
request.
(d) In the event that a Participant terminates service due to
a Disability as described in Section 4.5, the
Participant may, with the consent of the Committee, elect
an installment form of benefit payment. The written
request must be made no later than thirty (30) days
after the date the Participant is determined to be
disabled by the Retirement Committee of the Kimberly-
Clark Salaried Employees' Retirement Plan. The
Committee may, in its discretion, grant the Participant's
request.
(e) In the event that installment payments are to be made
pursuant to Subsections 4.6(b), (c) or (d), such
payments shall be in quarterly installments commencing
as soon as administratively feasible after the Committee
grants the request for an installment form of benefit
payment. Such quarterly installments shall be payable
in approximately equal amounts over a period, no less
than two (2) calendar years and no more than ten (10)
calendar years.
Initially, the amount of any installments under the
installment form of payment described in this
Subsection 4.6(e) shall be equal to the balance of the
Participant's Deferred Benefit Account to be distributed
divided by the number of 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
Deferred Benefit Account due to fluctuations in
earnings, gains and losses on the remaining balance and
the number of remaining installments. Quarterly
installments payments will be made on the last business
day of January, April, July and October.
4.7 Limitations on the Annual Amount Paid to a Participant.
Notwithstanding any other provisions of this Plan to the
contrary, in the event that a portion of the payments due a
Participant pursuant to Sections 3.5, 4.1, 4.2, 4.3, 4.4, 4.5, or
4.6 would not be deductible by the Company pursuant to
Section 162(m) of the Code, the Company, at its discretion,
may postpone payment of such amounts to the Participant until
such time that the payments would be deductible by the
Company. Provided, however, that no payment postponed
pursuant to this Section 4.7 shall be postponed beyond the first
anniversary of such Participant's Termination of Service.
4.8 Change of Control and Lump Sum Payments
(a) If there is a Change of Control, notwithstanding any
other provision of this Plan, any Participant who has a
Deferred Benefit 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
Deferred Benefit Account, reduced by a penalty equal
to ten percent (10%) of the Participant's Deferred
Benefit Account as of the Determination Date. 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 Plan, any retired or disabled
Participant, or Beneficiary, who has a Deferred Benefit
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 Deferred Benefit
Account, reduced by a penalty equal to five percent
(5%) of the Participant's Deferred Benefit Account as
of the Determination Date. The five percent (5%)
penalty of the retired Participant's or Beneficiary's
Deferred Benefit 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 or disabled Participant or Beneficiary, the
Plan and Agreement shall remain in full force and effect.
4.9 Change In Credit Rating and Lump Sum Payments
In the event the Company's financial rating falls below
Investment Grade, a Participant, retired or disabled Participant,
or Beneficiary may at any time during a six (6) month period
following the reduction in the Company's financial rating, elect
to receive an immediate lump sum payment of the balance of
his Deferred Benefit Account reduced by a penalty equal to ten
percent (10%) of the Participant's Deferred Benefit Account or
five percent (5%) of the retired or disabled Participant's or
Beneficiary's Deferred Benefit Account. The penalties accrued
hereunder shall be permanently forfeited and shall not be paid
to, or in respect of, the Participant, retired or disabled
Participant or Beneficiary.
In the event no such request is made by a Participant, retired
or disabled Participant or Beneficiary, the Plan and Agreement
shall remain in full force and effect.
4.10 Tax Withholding. To the extent required by law in effect at
the time payments are made, the Company shall withhold any
taxes required to be withheld by any Federal, State or local
government.
4.11 Commencement of Payments. Unless otherwise provided,
commencement of payments under this Plan shall be as soon as
administratively feasible on or after the last business day of
the month following the Determination Date after receipt of
notice and approval by the Committee of an event which entitles
a Participant or a Beneficiary to payments under this Plan.
Amounts payable hereunder shall be credited with interest from
the Determination Date to the day prior to payment at a rate
yielding interest equivalent to the per annum secondary market
discount rate for six-month U.S. Treasury Bills as published by
the Federal Reserve Board for the calendar week ending prior
to January 1 (for interest to be credited for either of the
subsequent fiscal quarters ending March 31 or June 30) or
prior to July 1 (for interest to be credited for either of the
subsequent fiscal quarters ending on September 30 or
December 31).
4.12 Recipients of Payments: Designation of Beneficiary. All
payments to be made by the Company under the Plan 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 Plan shall be made by the
Company 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 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.
V. CLAIMS FOR BENEFITS PROCEDURE
5.1 Claim for Benefits. Any claim for benefits under the Plan shall
be made in writing to any member of the Committee. If such
claim is wholly or partially denied by the Committee, the
Committee shall, within a reasonable period of time, but not
later than sixty (60) days after receipt of the claim, notify the
claimant of the denial of the claim. Such notice of denial shall
be in writing and shall contain:
(a) The specific reason or reasons for denial of the claim;
(b) A reference to the relevant Plan provisions upon which
the denial is based;
(c) A description of any additional material or information
necessary for the claimant to perfect the claim, together
with an explanation of why such material or information
is necessary; and
(d) An explanation of the Plan's claim review procedure.
If no such notice is provided, the claim shall be deemed to
have been denied.
5.2 Request for Review of a Denial of a Claim for Benefits. Upon
the receipt by the claimant of written notice of denial of the
claim, the claimant may file a written request to the
Committee, requesting a review of the denial of the claim,
which review shall include a hearing if deemed necessary by
the Committee. In connection with the claimant's appeal of the
denial of his claim, he may review relevant documents and
may submit issues and comments in writing.
5.3 Decision Upon Review of Denial of Claim for Benefits. The
Committee shall render a decision on the claim review
promptly, but no more than sixty (60) days after the receipt of
the claimant's request for review, unless special circumstances
(such as the need to hold a hearing) require an extension of
time, in which case the sixty (60) day period shall be extended
to 120 days. Such decision shall:
(a) Include specific reasons for the decision;
(b) Be written in a manner calculated to be understood by
the claimant; and
(c) Contain specific references to the relevant Plan
provisions upon which the decision is based.
The decision of the Committee shall be final and binding in all
respects on both the Company and the claimant.
VI. ADMINISTRATION
6.1 Committee. The Plan shall be administered by the Committee.
The Committee shall elect one of its members as chairman.
Members of the Committee shall not receive compensation for
their services. Committee expenses shall be paid by the
Company. Members of the Committee or agents of the
Committee may be Participants under the Plan. No member of
the Committee who is also a Participant shall be involved in
the decisions of the Committee regarding any determination of
any claim for benefit with respect to himself.
6.2 General Rights, Powers, and Duties of Committee. The
Committee shall be responsible for the management, operation,
and administration of the Plan. The Committee may designate
a Committee member or an officer of the Company as Plan
Administrator. Absent such delegation, the Committee shall be
the Plan Administrator. The Plan Administrator shall perform
duties as designated by the Committee. In addition to any
powers, rights and duties set forth elsewhere in the Plan, it
shall have the following powers and duties:
(a) To adopt such rules and regulations consistent with the
provisions of the Plan as it deems necessary for the
proper and efficient administration of the Plan;
(b) To administer the Plan in accordance with its terms and
any rules and regulations it establishes;
(c) To maintain records concerning the Plan sufficient to
prepare reports, returns and other information required
by the Plan or by law;
(d) To construe and interpret the Plan including any
doubtful or contested terms and resolve all questions
arising under the Plan;
(e) To direct the Company to pay benefits under the Plan,
and to give such other directions and instructions as
may be necessary for the proper administration of the
Plan;
(f) To employ or retain agents, attorneys, actuaries,
accountants or other persons, who may also be
Participants in the Plan or be employed by or represent
the Company, as it deems necessary for the effective
exercise of its duties, and may delegate to such agents
any power and duties, both ministerial and
discretionary, as it may deem necessary and
appropriate; and
(g) To be responsible for the preparation, filing and
disclosure on behalf of the Plan of such documents and
reports as are required by any applicable Federal or
State law.
6.3 Information to be Furnished to Committee. The Company shall
furnish the Committee such data and information as it may
require. The records of the Company shall be determinative of
each Participant's period of employment, termination of
employment and the reason therefor, leave of absence,
reemployment, Years of Service, personal data, and Salary and
Bonus reductions. Participants and their Beneficiaries shall
furnish to the Committee such evidence, data, or information,
and execute such documents as the Committee requests.
6.4 Responsibility. No member of the Committee, the
Compensation Committee or the Board of Directors of the
Company shall be liable to any person for any action taken or
omitted in connection with the administration of this Plan.
6.5 Committee Review. Any action on matters within the
discretion of the Committee shall be final and conclusive as to
all Participants, retired Participants, Beneficiaries and other
persons claiming rights under the Plan. The Committee shall
exercise all of the powers, duties and responsibilities set forth
hereunder in its sole discretion.
VII. AMENDMENT AND TERMINATION
7.1 Amendment. The Plan may be amended in whole or in part by
either the Board of Directors or the Compensation Committee
at any time. Notice of any such amendment shall be given in
writing to the Committee and to each Participant and each
Beneficiary. No amendment shall decrease the value of a
Participant's Deferred Benefit Account.
7.2 Company's Right to Terminate. The Board of Directors may
terminate the Plan and may terminate any Agreements
pertaining to the Participant at any time after the Effective
Date of the Plan. In the event of any such termination, the
Participant shall be entitled to the amount of his Deferred
Benefit Account determined under Section 3.7 as of the date of
any such termination. Such benefit shall be paid to the
Participant in quarterly installments over a period of no more
than ten (10) years, except that the Company, in its sole
discretion, may pay out such benefit in a lump sum or in
installments over a period shorter than ten (10) years.
VIII. MISCELLANEOUS
8.1 No Implied Rights; Rights on Termination of Service. Neither
the establishment of the Plan nor any amendment thereof shall
be construed as giving any Participant, retired Participant,
Beneficiary, or any other person any legal or equitable right
unless such right shall be specifically provided for in the Plan
or conferred by specific action of the Company in accordance
with the terms and provisions of the Plan. Except as expressly
provided in this Plan, the Company shall not be required or be
liable to make any payment under the Plan.
8.2 No Right to Company Assets. Neither the Participant nor any
other person shall acquire by reason of the Plan any right in or
title to any assets, funds or property of the Company
whatsoever including, without limiting the generality of the
foregoing, any specific funds, assets, or other property which
the Company, in its sole discretion, may set aside. Any
benefits which become payable hereunder shall be paid from
the general assets of the Company. The Participant shall have
only a contractual right to the amounts, if any, payable
hereunder unsecured by any asset of the Company. Nothing
contained in the Plan constitutes a guarantee by the Company
that the assets of the Company shall be sufficient to pay any
benefit to any person.
8.3 No Employment Rights. Nothing herein shall constitute a
contract of employment or of continuing service or in any
manner obligate the Company to continue the services of the
Participant, or obligate the Participant to continue in the
service of the Company, or as a limitation of the right of the
Company to discharge any of its employees, with or without
cause. Nothing herein shall be construed as fixing or regulating
the Salary and Bonus payable to the Participant.
8.4 Offset. If, at the time payments or installments of payments are
to be made hereunder, the Participant, retired Participant or the
Beneficiary are indebted or obligated to the Company, then the
payments remaining to be made to the Participant, retired
Participant, or the Beneficiary may, at the discretion of the
Company, be reduced by the amount of such indebtedness or
obligation, provided, however, that an election by the Company
not to reduce any such payment or payments shall not
constitute a waiver of its claim for such indebtedness or
obligation.
8.5 Non-assignability. Neither the Participant nor any other person
shall have any voluntary or involuntary right to commute, sell,
assign, pledge, anticipate, mortgage or otherwise encumber,
transfer, hypothecate or convey in advance of actual receipt the
amounts, if any, payable hereunder, or any part thereof, which
are expressly declared to be unassignable and non-transferable.
No part of the amounts payable shall be, prior to actual
payment, subject to seizure or sequestration for the payment of
any debts, judgments, alimony or separate maintenance owed
by the Participant or any other person, or be transferable by
operation of law in the event of the Participant's or any other
person's bankruptcy or insolvency.
8.6 Successors, Mergers, and Consolidations. The Plan and any
Agreement thereunder shall inure to the benefit of and be
binding upon (i) the Company and its successors and assigns,
including without limitation, any corporation into which the
Company may be merged or consolidated, or which acquires
all or substantially all of the assets and business of the
Company and (ii) the Participant and his heirs, executors,
administrators and legal representatives.
8.7 Notice. Any notice required or permitted to be given under the
Plan shall be sufficient if in writing and hand delivered, or
sent by registered or certified mail, and if given to the
Company, delivered to the principal office of the Company,
directed to the attention of the Committee. Such notice shall
be deemed given as of the date of delivery or, if delivery is
made by mail, as of the date shown on the postmark or the
receipt for registration or certification.
8.8 Governing Laws. The Plan shall be construed and administered
according to the laws of the State of Wisconsin.
IN WITNESS WHEREOF, the Company has adopted this KIMBERLY-
CLARK CORPORATION DEFERRED COMPENSATION PLAN as of
October 1, 1994.
KIMBERLY-CLARK CORPORATION
By:
Wayne R. Sanders
Chairman of the Board
and Chief Executive Officer
KIMBERLY-CLARK CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
Computation of Ratio of Earnings to Fixed Charges
(Dollar amounts in millions)
Year Ended December 31
1994 1993 1992 1991 1990
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Consolidated Companies
Income before income taxes .................... $740.6 $713.0 $461.9 $684.3 $660.8
Interest expense .............................. 129.4 112.6 99.4 102.1 88.1
Interest factor in rent expense ............... 23.8 23.1 26.4 22.6 20.8
Amortization of capitalized interest .......... 6.5 5.7 5.7 4.7 4.1
Equity Affiliates
Share of 50%-owned:
Income before income taxes .................. 43.2 34.6 39.3 28.2 21.3
Interest expense ............................ 7.8 7.6 3.1 5.1 8.6
Interest factor in rent expense ............. .4 .6 .6 .7 .7
Amortization of capitalized interest ........ .6 .6 .3 .2 .2
Distributed income of less than 50%-owned ..... 41.4 41.4 41.7 43.4 33.2
Earnings ........................................ $993.7 $939.2 $678.4 $891.3 $837.8
Consolidated Companies
Interest expense .............................. $129.4 $112.6 $ 99.4 $102.1 $ 88.1
Capitalized interest .......................... 9.6 19.0 18.6 14.7 20.3
Interest factor in rent expense ............... 23.8 23.1 26.4 22.6 20.8
Equity Affiliates
Share of 50%-owned:
Interest expense and capitalized interest ... 8.1 8.1 8.1 7.1 9.0
Interest factor in rent expense ............. .4 .6 .6 .7 .7
Fixed charges ................................... $171.3 $163.4 $153.1 $147.2 $138.9
Ratio of earnings to fixed charges ........ 5.80 5.75 4.43(a) 6.06 6.03
</TABLE>
(a) The 1992 ratio of earnings to fixed charges excluding the
pretax restructuring charge of $250.0 million was 6.06.
EXHIBIT 13
CONSOLIDATED INCOME STATEMENT
Kimberly-Clark Corporation and Subsidiaries
<TABLE>
<CAPTION>
(Millions of dollars Year Ended December 31
except per share amounts) 1994 1993 1992
-------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net Sales ........................................... $7,364.2 $6,972.9 $7,091.1
Cost of products sold ............................. 4,925.1 4,581.4 4,534.5
-------- -------- --------
Gross Profit ........................................ 2,439.1 2,391.5 2,556.6
Advertising, promotion and selling expenses ....... 1,079.8 1,068.3 1,255.6
Research expense .................................. 167.1 158.5 156.1
General expense ................................... 373.1 371.2 351.8
Restructuring charge .............................. - - 250.0
-------- -------- --------
Operating Profit .................................... 819.1 793.5 543.1
Interest expense .................................. (129.4) (112.6) (99.4)
Other income (expense), net ....................... 50.9 32.1 18.2
-------- -------- --------
Income Before Income Taxes .......................... 740.6 713.0 461.9
Provision for income taxes ........................ 276.4 284.4 186.3
-------- -------- --------
Income Before Equity Interests ...................... 464.2 428.6 275.6
Share of net income of equity companies ........... 87.1 98.0 82.9
Minority owners' share of subsidiaries'
net income ...................................... (16.2) (15.7) (13.5)
-------- -------- --------
Income Before Cumulative Effects of Accounting Changes 535.1 510.9 345.0
Cumulative effects of accounting changes:
Other postretirement benefits, net of
income taxes .................................. - - (245.0)
Income taxes .................................... - - 35.0
-------- -------- --------
Net Income .......................................... $ 535.1 $ 510.9 $ 135.0
======== ======== ========
Per Share Basis
Income before cumulative effects of accounting
changes ......................................... $ 3.33 $ 3.18 $ 2.15
Cumulative effects of accounting changes:
Other postretirement benefits, net of
income taxes .................................. - - (1.53)
Income taxes .................................... - - .22
-------- -------- --------
Net income ........................................ $ 3.33 $ 3.18 $ .84
======== ======== ========
</TABLE>
See Notes to Financial Statements.
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET
Kimberly-Clark Corporation and Subsidiaries
December 31
(Millions of dollars) ASSETS 1994 1993
------------------------------------------------------------------------------------
<S> <C> <C>
Current Assets
Cash and cash equivalents ................................... $ 23.8 $ 34.8
Accounts receivable ......................................... 847.5 738.7
Inventories ................................................. 804.2 775.9
Deferred income tax benefits ................................ 89.8 93.7
Prepaid expenses ............................................ 44.6 32.1
-------- --------
Total Current Assets ...................................... 1,809.9 1,675.2
-------- --------
Property
Land and timberlands ........................................ 125.5 121.0
Buildings ................................................... 1,053.6 1,004.5
Machinery and equipment ..................................... 5,213.0 5,034.6
Construction in progress .................................... 211.9 212.7
-------- --------
6,604.0 6,372.8
Less accumulated depreciation ............................... 2,404.6 2,330.0
-------- --------
Net Property .............................................. 4,199.4 4,042.8
Investments in Equity Companies ............................... 376.2 398.3
Deferred Charges and Other Assets ............................. 330.2 264.4
-------- --------
$6,715.7 $6,380.7
======== ========
</TABLE>
See Notes to Financial Statements.
<TABLE>
<CAPTION>
December 31
LIABILITIES AND STOCKHOLDERS' EQUITY 1994 1993
------------------------------------------------------------------------------------
<S> <C> <C>
Current Liabilities
Debt payable within one year ............................... $ 771.8 $ 684.8
Trade accounts payable ..................................... 358.0 322.0
Other payables ............................................. 137.6 116.1
Accrued expenses ........................................... 633.9 594.6
Accrued income taxes ....................................... 87.0 121.8
Dividends payable .......................................... 70.5 69.2
-------- --------
Total Current Liabilities ................................ 2,058.8 1,908.5
-------- --------
Long-Term Debt ............................................... 929.5 933.1
-------- --------
Noncurrent Employee Benefit Obligations ...................... 438.7 430.0
-------- --------
Deferred Income Taxes ........................................ 612.8 585.0
-------- --------
Minority Owners' Interests in Subsidiaries ................... 80.1 66.9
-------- --------
Stockholders' Equity
Common stock-$1.25 par value-authorized 300.0 million
shares; issued 161.9 million ............................. 202.4 202.4
Additional paid-in capital ................................. 27.0 27.1
Common stock held in treasury, at cost - 1.7 million
and 1.0 million shares at December 31, 1994 and
1993, respectively ....................................... (76.8) (32.9)
Unrealized currency translation adjustments ................ (310.0) (240.6)
Retained earnings .......................................... 2,753.2 2,501.2
-------- --------
Total Stockholders' Equity ............................... 2,595.8 2,457.2
-------- --------
$6,715.7 $6,380.7
======== ========
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED CASH FLOW STATEMENT
Kimberly-Clark Corporation and Subsidiaries
Year Ended December 31
(Millions of dollars) 1994 1993 1992
------------------------------------------------------------------------------------
<S> <C> <C> <C>
Operations
Net income ......................................... $ 535.1 $ 510.9 $ 135.0
Depreciation ....................................... 329.6 295.9 289.0
Restructuring charge ............................... - - 250.0
Cumulative effects of accounting changes ........... - - 210.0
Deferred income tax provision (benefit) ............ 31.8 23.6 (3.4)
Equity companies' earnings in excess of
dividends paid ................................... (40.1) (49.0) (35.6)
Minority owners' share of subsidiaries'
net income ....................................... 16.2 15.7 13.5
Changes in operating working capital ............... (184.2) (41.8) (105.1)
Pension funding in excess of expense ............... (40.1) (41.0) (48.1)
Other .............................................. 20.7 32.4 48.7
------- ------ -------
Cash Provided by Operations .................... 669.0 746.7 754.0
------- ------ -------
Investing
Capital spending ................................... (485.2) (654.5) (690.5)
Acquisitions of businesses ......................... (118.0) - -
Proceeds from disposition of property and
businesses ....................................... 155.5 33.8 4.3
Other .............................................. 4.9 (44.9) (83.3)
------- ------ -------
Cash Used for Investing ........................ (442.8) (665.6) (769.5)
------- ------ -------
Financing
Cash dividends paid ................................ (281.8) (273.4) (262.8)
Changes in debt payable within one year ............ 102.9 239.5 138.7
Increases in long-term debt ........................ 176.6 83.9 237.4
Decreases in long-term debt ........................ (180.2) (145.4) (117.5)
Acquisition of common stock for the treasury ....... (52.2) (.8) (2.3)
Other .............................................. (2.5) 8.8 20.3
------- ------ -------
Cash (Used for) Provided by Financing .......... (237.2) (87.4) 13.8
------- ------ -------
Decrease in Cash and Cash Equivalents ................ $ (11.0) $ (6.3) $ (1.7)
======= ======= =======
</TABLE>
See Notes to Financial Statements.
Notes to Financial Statements
Note 1. Accounting Policies
Kimberly-Clark Corporation's accounting policies conform to
generally accepted accounting principles. Significant policies
followed are described below.
Basis of Presentation
The consolidated financial statements include the accounts of
Kimberly-Clark Corporation and all significant subsidiaries
which are more than 50 percent owned and controlled.
Investments in significant nonconsolidated companies which are
at least 20 percent owned are stated at cost plus equity in
undistributed net income. These latter companies are referred
to as equity companies.
Certain reclassifications have been made to conform prior
years' data to the current year presentation.
Start-Up and Preoperating Costs
Costs of bringing certain significant new or expanded
facilities into operation are recorded as deferred charges and
amortized to income over periods of not more than five years.
Advertising and Promotion Expenses
Advertising expenses are charged to income during the year in
which they are incurred. Promotion expenses are charged to
income over the period of the promotional campaign.
Per Share Data
Per share data are based on the average number of common shares
outstanding, which was 160.9 million for the years ended
December 31, 1994 and 1993, and 160.4 million for the year
ended December 31, 1992.
Inventories
U.S. inventories valued at cost on the Last-In, First-Out
(LIFO) method for U.S. income tax purposes are valued in the
same manner for accounting purposes. The balance of the U.S.
inventories and inventories of consolidated operations outside
the U.S. are valued at the lower of cost, using the First-In,
First-Out (FIFO) method, or market.
Property and Depreciation
Property, plant and equipment are stated at cost. Depreciable
property is depreciated on the straight-line or units-of-
production method for accounting purposes and generally on an
accelerated method for income tax purposes. When property is
sold or retired, the cost of the property and the related
accumulated depreciation are removed from the balance sheet and
any gain or loss on the transaction is included in income.
Environmental Expenditures
Environmental expenditures related to current operations which
qualify as property, plant and equipment or which substantially
increase the economic value or extend the useful life of an
asset are capitalized, and all other expenditures are expensed
as incurred. Environmental expenditures that relate to an
existing condition caused by past operations are expensed.
Liabilities are recorded when environmental assessments and/or
remedial efforts are probable, and the costs can be reasonably
estimated. Generally, the timing of these accruals coincides
with completion of a feasibility study or a commitment to a
formal plan of action.
Note 2. Income Taxes
Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes" (SFAS No. 109) was adopted in
1992, and the $35.0 million cumulative effect of adopting the
standard was credited to 1992 income as a separate item in the
consolidated income statement.
An analysis of the provision for income taxes follows:
Year Ended December 31
(Millions of dollars) 1994 1993 1992
---------------------------------------------------------------------------
Current income taxes:
United States ............................. $180.1 $181.9 $131.0
State ..................................... 23.1 38.8 34.0
Other countries ........................... 41.4 40.1 24.7
------ ------ ------
244.6 260.8 189.7
------ ------ ------
Deferred income taxes:
United States ............................. 35.4 34.2 12.9
State ..................................... 9.5 .6 (1.8)
Other countries ........................... (13.1) (11.2) (14.5)
------ ------ ------
31.8 23.6 (3.4)
------ ------ ------
Total ................................... $276.4 $284.4 $186.3
====== ====== ======
Deferred income tax assets (liabilities) as of December 31,
1994 and 1993 are comprised of the following:
<TABLE>
<CAPTION>
(Millions of dollars) 1994 1993
----------------------------------------------------------------------------------------
<S> <C> <C>
Current deferred income tax assets (liabilities) attributable to:
Advertising and promotion accruals ........................... $ 19.6 $ 13.9
Pension, postretirement and other employee benefits .......... 43.7 43.7
Other accrued liabilities .................................... 29.2 31.2
Prepaid expenses ............................................. (4.4) (3.5)
Other ........................................................ 3.4 13.0
Valuation allowances ......................................... (1.7) (4.6)
-------- -------
Net current deferred income tax asset ...................... $ 89.8 $ 93.7
======== =======
Noncurrent deferred income tax assets (liabilities) attributable to:
Accumulated depreciation ..................................... $(807.3) $(754.7)
Start-up and preoperating costs .............................. (22.9) (29.7)
Operating loss carryforwards ................................. 137.3 92.6
Other postretirement benefits ................................ 151.5 153.7
Prepaid pension asset ........................................ (34.5) (19.4)
Other ........................................................ (.7) (1.5)
Valuation allowances ......................................... (36.2) (26.0)
-------- -------
Net noncurrent deferred income tax liability ............... $(612.8) $(585.0)
======= =======
</TABLE>
The valuation allowances for deferred income tax assets
increased $7.3 million in 1994 and $7.7 million in 1993.
A reconciliation of income tax computed at the U.S. federal
statutory tax rate to the provision for income taxes is as
follows:
<TABLE>
<CAPTION>
(Millions of dollars) 1994 1993 1992
Amount Percent Amount Percent Amount Percent
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Tax at U.S. statutory rate ............. $259.2 35.0% $249.6 35.0% $157.0 34.0%
State income taxes, net of federal
tax benefit .......................... 22.1 3.0 25.4 3.6 21.0 4.5
Operating losses for which no tax
benefit was recognized ............... 10.0 1.4 10.0 1.4 10.8 2.3
U.S. federal income tax rate increase .. - - 8.8 1.2 - -
Other - net ............................ (14.9) (2.1) (9.4) (1.3) (2.5) (.5)
------ ---- ------ ---- ------ -----
Provision for income taxes ........... $276.4 37.3% $284.4 39.9% $186.3 40.3%
====== ==== ====== ==== ====== ====
</TABLE>
At December 31, 1994, income taxes have not been provided on
$969 million of permanently invested unremitted net income of
subsidiaries operating outside the U.S. These earnings could
become subject to additional tax if they were remitted as
dividends, were lent to the Corporation or a U.S. affiliate, or
if the Corporation were to sell its stock in the subsidiaries.
Any resulting U.S. or foreign tax liability would be largely
offset by U.S. foreign tax credits.
Income before income taxes included income of $14.4 million in
1994, income of $31.2 million in 1993 and a loss of
$23.5 million in 1992 from subsidiaries outside the U.S.
Net operating loss carryforwards of $405.7 million at
December 31, 1994 were applicable to certain subsidiaries
outside the U.S. If not utilized against taxable income,
$110.7 million of this amount will expire through the year
1999. The remaining $295.0 million has no expiration date.
Note 3. Postretirement and Other Benefits
Pension Benefits
The Corporation and its subsidiaries in North America and the
United Kingdom have defined-benefit retirement plans (the
principal plans) covering substantially all full-time
employees. Retirement benefits are based on years of service
and generally on the average compensation earned in the highest
five of the last 15 years of service. The funding policy is to
contribute assets that, at a minimum, fully fund the
accumulated benefit obligation, subject to regulatory and tax
deductibility limits. At December 31, 1994 and 1993, the fair
value of plan assets exceeded the accumulated benefit
obligation by $87.9 million and $57.2 million, respectively.
Assets held in the pension trusts are comprised principally of
common stocks, high-grade corporate and government bonds and
various short-term investments.
Most other subsidiaries outside the U.S. have pension plans
covering substantially all full-time employees. Obligations
under such plans are provided for by contributing to trusts,
purchasing insurance policies, or recording liabilities.
The components of net pension cost were as follows:
Year Ended December 31
(Millions of dollars) 1994 1993 1992
------------------------------------------------------------------------
Benefits earned ............................ $ 64.1 $ 56.2 $ 51.2
Interest on projected benefit obligation ... 109.8 106.3 102.2
Amortizations and other .................... 7.2 3.2 4.2
------ ------ ------
181.1 165.7 157.6
Less expected return on plan assets
(Actual return on plan assets was
a $2.0 million loss in 1994, and
gains of $152.5 million in 1993
and $66.7 million in 1992) ............... 121.8 115.3 106.1
------ ------ ------
Net pension cost ........................... $ 59.3 $ 50.4 $ 51.5
====== ====== ======
The assumed long-term rates of return on pension assets for
purposes of pension cost recognition for the principal plans
were as follows:
1994 1993 1992
------ ----- -----
United States plans .................. 9.25% 10.00% 10.00%
Canadian plans ....................... 10.00% 10.50% 10.50%
United Kingdom plan .................. 9.50% 10.50% 11.00%
Transition adjustments are being amortized on the straight-line
method over 14 to 18 years.
The funded status of the principal plans is presented below:
December 31
(Millions of dollars) 1994 1993
--------------------------------------------------------------------
Actuarial present value of plan benefits:
Accumulated benefit obligation:
Vested ............................... $1,160.0 $1,181.2
Nonvested ............................ 19.9 13.6
-------- --------
Total .............................. $1,179.9 $1,194.8
======== ========
Projected benefit obligation ........... $1,453.6 $1,428.8
Plan assets at fair value ................ 1,267.8 1,252.0
-------- --------
Plan assets less than projected
benefit obligation ..................... $ (185.8) $ (176.8)
======== ========
Consisting of:
Unfavorable actuarial experience ..... $ (263.9) $ (211.2)
Unamortized transition
adjustments ........................ (1.9) (2.2)
Unamortized prior service costs ...... (14.6) (14.1)
Net prepaid pension asset ............ 94.6 50.7
-------- --------
Total .......................... $ (185.8) $ (176.8)
======== ========
The assumed discount rates used to determine the projected
benefit obligation and accumulated benefit obligation for the
principal plans were as follows:
December 31
1994 1993
----- ------
United States plans .......... 8.75% 7.50%
Canadian plans ............... 10.00% 8.50%
United Kingdom plan .......... 9.50% 8.00%
The assumed long-term rates of compensation increases used to determine
the projected benefit obligation for the principal plans were as follows:
December 31
1994 1993
----- -----
United States plans .......... 5.50% 3.75%
Canadian plans ............... 6.25% 4.25%
United Kingdom plan .......... 6.00% 4.75%
Postretirement Health Care and Life Insurance Benefits
Substantially all retired employees of the Corporation and its
North American subsidiaries are covered by unfunded health care
and life insurance benefit plans. Benefits are based on years
of service and age at retirement. The plans are principally
noncontributory for current retirees, and are contributory for
most future retirees. The U.S. plans place a limit on the
Corporation's cost of future annual per capita retiree medical
benefits at no more than 200 percent of the 1992 annual per
capita cost.
Statement of Financial Accounting Standards No. 106,
"Employers' Accounting for Postretirement Benefits Other Than
Pensions" (SFAS No. 106) was adopted in 1992. The estimated
accumulated postretirement benefit obligation (i.e., transition
obligation) of $395.0 million, less related deferred income tax
benefits of $150.0 million, was charged to 1992 income as a
cumulative effect of adopting SFAS No. 106. The net charge of
$245.0 million is shown as a separate item in the consolidated
income statement.
The components of postretirement health care and life insurance
benefit costs were as follows:
<TABLE>
<CAPTION>
Year Ended December 31
(Millions of dollars) 1994 1993 1992
----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Benefits earned ........................................... $ 6.5 $ 6.3 $ 6.7
Interest on accumulated postretirement benefit
obligation .............................................. 26.8 28.3 32.4
Amortization .............................................. (.3) (1.9) -
------- ------ ------
Net postretirement benefit costs (of which
$26.2 million, $24.9 million and $24.1 million
were paid in 1994, 1993 and 1992, respectively) ......... $ 33.0 $ 32.7 $ 39.1
====== ====== ======
</TABLE>
The components of the postretirement health care and life
insurance benefit obligation are presented below:
<TABLE>
<CAPTION>
December 31
(Millions of dollars) 1994 1993
-----------------------------------------------------------------------------
<S> <C> <C>
Accumulated postretirement benefit obligation:
Retirees ................................................ $219.0 $243.2
Fully eligible active plan participants ................. 55.7 55.0
Other active plan participants .......................... 89.0 96.6
------ ------
Total ................................................. 363.7 394.8
Favorable actuarial experience ............................ 54.9 22.6
------ ------
Total accrued postretirement benefit liability ............ 418.6 417.4
Less current portion ...................................... 29.2 27.7
------ ------
Noncurrent portion ........................................ $389.4 $389.7
====== ======
</TABLE>
The December 31, 1994 accumulated postretirement benefit
obligation for the U.S. plans was determined using an assumed
health care cost trend rate of 10.4% in 1995, declining to zero
in 2002 and thereafter, which reflects the previously described
limit on the Corporation's cost of annual per capita retiree
medical benefits. The December 31, 1993 accumulated
postretirement benefit obligation was determined using an
assumed health care cost trend rate of 16% in 1994, declining
to zero in 2000 and thereafter. Assumed discount rates of
8.75% and 7.5% were used to determine the accumulated
postretirement benefit obligation at December 31, 1994 and
December 31, 1993, respectively.
A one-percentage point increase in the health care cost trend
rate would increase the accumulated postretirement benefit
obligation by $7.4 million at December 31, 1994 and expense by
$.5 million for the year then ended.
Other Benefits
Voluntary contributory investment plans are provided to
substantially all U.S. employees. Under the plans, the
Corporation matches a portion of employee contributions. Costs
under the plans were $17.8 million, $18.0 million and
$16.4 million in 1994, 1993 and 1992, respectively.
Note 4. Debt
<TABLE>
<CAPTION>
The major issues of long-term debt outstanding were:
December 31
(Millions of dollars) 1994 1993
-------------------------------------------------------------------------------
<S> <C> <C>
Kimberly-Clark Corporation
7 7/8% Debentures due 2023 ............................ $ 199.7 $ 199.7
8 5/8% Notes due 2001 ................................. 199.6 199.5
9 3/4% Notes due 1995 ................................. 100.1 100.3
9 1/8% Notes due 1997 ................................. 100.0 100.0
9% Notes due 2000 ..................................... 99.8 99.8
6 7/8% Debentures due 2014 ............................ 99.7 -
9 1/2% Sinking Fund Debentures due 2018 ............... 49.9 73.7
12% Notes ............................................. - 100.0
6 1/8% to 9.67% Industrial Development Revenue
Bonds maturing to 2023 .............................. 98.0 58.2
Other ................................................. 3.4 3.1
-------- -------
950.2 934.3
Subsidiaries
11% to 16.8% Debentures due 1995, 1996 and 1997 ....... 51.9 41.5
Bank loans in various currencies at fixed rates (8% to
13.69% at December 31, 1994) maturing to 2000 ....... 16.5 34.7
Bank loans at variable rates (6.25% to 7.81% at
December 31, 1994) maturing to 2003 ................. 21.4 21.4
Other ................................................. 37.0 30.9
-------- --------
1,077.0 1,062.8
Less current portion .................................... 147.5 129.7
-------- --------
Total ................................................. $ 929.5 $ 933.1
======== ========
</TABLE>
Scheduled maturities of long-term debt are $26.8 million in
1996, $127.9 million in 1997, $10.2 million in 1998 and
$13.8 million in 1999.
At December 31, 1994, the Corporation had $600 million of
revolving credit facilities with a group of U.S. and European
banks. These facilities, which were unused at
December 31, 1994, permit borrowing at competitive interest
rates and are available for general corporate purposes,
including backup for commercial paper borrowings. The
Corporation pays commitment fees on the unused portion but may
cancel the facilities without penalty at any time prior to
their expiration. Of these facilities, $300 million expires in
September 1995 and the remainder expires in December 1999.
<TABLE>
<CAPTION>
Debt payable within one year:
December 31
(Millions of dollars) 1994 1993
-------------------------------------------------------------------------------
<S> <C> <C>
Commercial paper .......................................... $520.2 $475.4
Current portion of long-term debt ......................... 147.5 129.7
Other short-term debt ..................................... 104.1 79.7
------ ------
Total ................................................... $771.8 $684.8
====== ======
</TABLE>
At December 31, 1994 and 1993, the weighted average interest
rate for commercial paper was 6.0 percent and 3.2 percent,
respectively. At December 31, 1994 and 1993, the weighted
average interest rate for other short-term debt was 9.5 percent
and 10.8 percent, respectively.
At December 31, 1994 and 1993, the estimated fair value of the
Corporation's long-term debt was $1,052.9 million and
$1,165.0 million compared with a carrying value of
$1,077.0 million and $1,062.8 million, respectively. The fair
value of the Corporation's commercial paper and other short-
term debt approximated the carrying amount. These fair values
were based on quoted market prices for the same or similar debt
or on current rates offered to the Corporation for obligations
with the same maturities.
Note 5. Foreign Currency
Foreign Exchange Risk
The Corporation and its subsidiaries and affiliates have
manufacturing facilities in more than 25 countries throughout
the world, as well as transactions denominated in numerous
currencies. Consequently, Kimberly-Clark is subject to both
foreign exchange translation and transaction risks as a result
of strengthening or weakening of various currencies against
each other and local currencies versus the U.S. dollar.
Foreign currency losses included in consolidated net income
were $54.9 million in 1994, $15.7 million in 1993 and $9.2
million in 1992. The 1994 loss includes a $39.2 million
nonoperating charge for the Corporation's share of a foreign
currency loss attributable to the effect of the devaluation of
the Mexican peso, as discussed below. The amounts also include
losses from other currency transactions and from the
translation of balance sheet accounts of operations in
hyperinflationary economies.
Translation Risk
The income statements of foreign operations other than those in
hyperinflationary economies are translated into U.S. dollars at
rates of exchange in effect each month. The balance sheets of
these operations are translated at period-end exchange rates,
and the differences from historical exchange rates are
reflected in stockholders' equity as unrealized currency
translation adjustments.
Summary of unrealized currency translation adjustments:
(Millions of dollars) 1994 1993
-----------------------------------------------------------------------
Balance, beginning of year ...................... $(240.6) $(197.9)
------- -------
Adjustments for the year:
Australian dollar ............................. 13.5 (1.0)
British pound ................................. 11.9 (5.4)
Canadian dollar ............................... (22.3) (16.5)
French franc .................................. 17.1 (9.2)
Mexican peso .................................. (102.4) (.8)
Other ......................................... 12.8 (9.8)
------- -------
(69.4) (42.7)
------- -------
Balance, end of year ............................ $(310.0) $(240.6)
======= =======
The income statements and balance sheets of operations in
hyperinflationary economies, i.e., Brazil (through July 1994
when the operation was sold) and Venezuela, are translated into
U.S. dollars using both current and historical rates of
exchange. For balance sheet accounts translated at current
exchange rates, such as cash and accounts receivable, the
differences from historical exchange rates are reflected in
income.
Translation exposure is not hedged. However, the risk to any
particular entity's net assets is minimized to the extent that
the entity is financed with local currency borrowing. In
addition, many of the Corporation's non-U.S. operations buy the
majority of their inputs and sell the majority of their outputs
in local currency, thereby minimizing the effect of currency
rate changes on their local operating profit margins.
Transaction Risk
Foreign currency risks arise from transactions and commitments
denominated in non-local currencies. These transactions and
commitments include the purchase of raw materials, finished
goods or items of property, plant and equipment, the sale of
products and the repayment of loans.
Management selectively hedges the Corporation's foreign
currency risks when it is practicable and economical to do so.
The instruments used to hedge foreign currency risks are
forward contracts and, to a lesser extent, option contracts.
These instruments are purchased from well-known money center
banks or government agencies (counterparties) throughout the
world. Usually the contracts extend for no more than 12
months, although their contractual term has been as long as 25
months. Credit risks with respect to the counterparties, and
the foreign currency risks that would not be hedged if the
counterparties fail to fulfill their obligations under the
contracts, are minimal in view of the financial strength of the
counterparties.
Gains and losses on instruments that hedge firm commitments are
deferred and included in the basis of the underlying hedged
items. Premiums paid for options are amortized ratably over the
life of the option. All other gains and losses are included in
current period income based on the period-end market price of
the instrument.
At December 31, 1994 there were outstanding forward and option
contracts, maturing at various dates in 1995, to purchase $199
million and to sell $312 million of various foreign currencies.
These contracts have not given rise to any significant net
deferred gains or losses as of December 31, 1994.
Certain equity affiliates and subsidiaries, located in Mexico
and Latin America, have financed a portion of their operations
with U.S. dollar-denominated liabilities, thereby creating
foreign currency transaction risks. The total U.S. dollar-
denominated liabilities of these entities at December 31, 1994
was approximately $400 million of which approximately $330
million was attributable to the Corporation's Mexican
affiliate. The Corporation's share of the foreign currency
transaction risk attributable to these liabilities was
approximately $170 million. During December 1994, the Mexican
peso was devalued. The Corporation's share of the
nonoperating, after-tax foreign currency loss attributable to
the effect of the devaluation on the U.S. dollar-denominated
liabilities of its Mexican affiliate was $39.2 million, or $.24
per share.
Note 6. Equity Participation Plans
Equity Participation Plans adopted in 1976, 1986 and 1992
provide for awards of participation shares and stock options to
key employees of the Corporation and its subsidiaries.
Upon maturity, participation share awards are paid in cash
based on the increase in the book value of the Corporation's
common stock during the award period. Participants do not
receive dividends on the participation shares, but their
accounts are credited with dividend shares payable in cash at
the maturity of the award. Neither participation nor dividend
shares are shares of common stock.
Data concerning participation and dividend shares follow:
<TABLE>
<CAPTION>
1994 1993 1992
----------------------------------------------------------------------------------------
<S> <C> <C> <C>
Outstanding - Beginning of year .............. 3,584,354 2,986,154 3,143,791
Awarded ...................................... - 1,351,100 -
Dividend shares credited - net ............... 358,499 432,788 303,317
Matured ...................................... (84,775) (1,142,988) (396,554)
Forfeited .................................... (62,400) (42,700) (64,400)
--------- --------- ---------
Outstanding - End of year .................... 3,795,678 3,584,354 2,986,154
========= ========= =========
</TABLE>
Stock options are granted at not less than market value, become
exercisable over three years and expire 10 years after the date
of the grant.
<TABLE>
<CAPTION>
Data concerning stock options follow:
1994 Number of Options
Price Range 1994 1993 1992
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Outstanding - Beginning of year ... $11 7/8-$58 5/8 3,576,935 2,451,973 3,190,498
Granted ........................... - 1,351,100 -
Exercised* ........................ $11 7/8-$46 1/4 (255,559) (208,658) (720,685)
Cancelled or expired .............. $41 3/8-$58 5/8 (38,100) (17,480) (17,840)
--------- --------- ---------
Outstanding - End of year ......... $15.22 -$58 5/8 3,283,276 3,576,935 2,451,973
========= ========= =========
Exercisable ....................... $15.22 -$58 5/8 2,363,516 2,107,995 1,624,073
========= ========= =========
</TABLE>
* Price ranges for options exercised were $11 7/8 to $46 1/4
per share in both 1993 and 1992.
At December 31, 1994, the number of additional shares of common
stock of the Corporation available for option and sale under
the 1992 Plan or for award as participation shares at such date
under the 1992 Plan was 7,397,500 shares. The 1976 and 1986
Plans have expired and no additional grants will be made under
these Plans. Amounts expensed for shares under the Plans were
$12.3 million, $10.6 million and $5.1 million in 1994, 1993 and
1992, respectively.
Note 7. Commitments
Operating Leases:
Future minimum rental payments under operating leases as of
December 31, 1994, were:
(Millions of dollars)
----------------------------------------------------------------------
Year Ending December 31:
1995 ....................................................... $ 52.8
1996 ....................................................... 36.1
1997 ....................................................... 27.9
1998 ....................................................... 20.6
1999 ....................................................... 15.4
Thereafter ................................................. 67.1
------
Total .................................................... $219.9
======
Consolidated rental expense under operating leases was
$113.1 million, $100.3 million and $118.9 million in 1994, 1993
and 1992, respectively.
Other:
The Corporation has entered into long-term contracts for the
purchase of certain raw materials. Minimum purchase
commitments, at current prices, are approximately
$230 million in each of the years 1995 and 1996. These
purchase commitments are not expected to result in losses.
Note 8. Stockholders' Equity
Changes in common stock issued, treasury stock, additional
paid-in capital and retained earnings are shown below:
<TABLE>
<CAPTION>
Additional
(Millions of dollars Common Stock Issued Treasury Stock Paid-In Retained
except share amounts) Shares Amount Shares Amount Capital Earnings
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31,
1991 ................ 161,906,544 $202.4 1,829,324 $(59.4) $26.0 $2,395.1
Exercise of stock
options ............. - - (720,685) 22.8 1.6 -
Purchased for
treasury ............ - - 39,359 (2.3) - -
Net income ............ - - - - - 135.0
Cash dividends
declared ............ - - - - - (332.2)
----------- ------ --------- ------ ---- -------
Balance at December 31,
1992 ................ 161,906,544 202.4 1,147,998 (38.9) 27.6 2,197.9
Exercise of stock
options ............. - - (208,658) 6.8 (.5) -
Purchased for
treasury ............ - - 16,526 (.8) - -
Net income ............ - - - - - 510.9
Cash dividends
declared ............ - - - - - (207.6)
----------- ------ --------- ------ ---- -------
Balance at December 31,
1993 ................ 161,906,544 202.4 955,866 (32.9) 27.1 2,501.2
Exercise of stock
options ............. - - (255,559) 8.3 (.1) -
Purchased for
treasury ............ - - 1,013,848 (52.2) - -
Net income ............ - - - - - 535.1
Cash dividends
declared ............ - - - - - (283.1)
----------- ------ --------- ------ ---- -------
Balance at December 31,
1994 ................ 161,906,544 $202.4 1,714,155 $(76.8) $27.0 $2,753.2
=========== ====== ========= ====== ===== ========
</TABLE>
At December 31, 1994, unremitted net income of equity companies
included in consolidated retained earnings was $427.9 million.
On June 21, 1988, the board of directors declared a
distribution of one preferred share purchase right for each
outstanding share of the Corporation's common stock. The
rights are intended to protect the stockholders against abusive
takeover tactics.
A right will entitle its holder to purchase one two-hundredth
of a share of Series A Junior Participating Preferred Stock at
an exercise price of $100, but will not become exercisable
until 10 days after a person or group acquires, or announces a
tender offer which would result in the ownership of, 20 percent
or more of the Corporation's outstanding common shares.
Under certain circumstances, a right will entitle its holder to
acquire either shares of the Corporation's stock or shares of
an acquiring company's common stock, in either event having a
market value of twice the exercise price of the right. At any
time after the acquisition by a person or group of 20 percent
or more, but fewer than 50 percent, of the Corporation's common
shares, the Corporation may exchange the rights, except for
rights held by the acquiring person or group, in whole or in
part, at a rate of one right for one share of the Corporation's
common stock or for one two-hundredth of a share of Series A Junior
Participating Preferred Stock.
The rights may, or after a vote of stockholders at a special
meeting shall, be redeemed at $.005 per right prior to the
acquisition by a person or group of 20 percent or more of the
common stock. Unless redeemed earlier, the rights expire on
June 21, 1998.
The Corporation has 20 million shares of authorized preferred
stock with no par value, none of which has been issued.
Note 9. Acquisition and Disposition of Businesses
In 1994, the Corporation purchased the feminine care products
businesses of VP-Schickedanz AG, a German company, and a 90
percent interest in the Handan Comfort and Beauty Group, a Chinese
company, for approximately $144 million. During the year, the Corporation
sold its tissue mill in Memphis, Tenn., adhesive-coated label
stock business in Troy, Ohio, tissue subsidiary in Brazil and
Spenco Medical Corporation and received total proceeds of
$118.2 million. These transactions, individually and in the
aggregate, are not significant to ongoing operations or to the
consolidated financial statements.
Note 10. Restructuring Charge
In 1992, the Corporation announced a restructuring plan to
strengthen its competitive position in consumer and service
products operations in Europe and certain operations in North
America. The plan included eliminating approximately
800 positions, principally in Europe; restructuring
manufacturing facilities at Rouen, France, and Larkfield,
England; discontinuing diaper production at mills in Fullerton,
Calif., and Memphis, Tenn.; writing off the No. 2 newsprint
machine at the Coosa Pines, Ala., mill; and integrating certain
U.S. and Canadian consumer and service products operations.
The $250.0 million pretax cost of the restructuring was charged
to 1992 operating profit. The restructuring reduced 1992 net
income by $172.0 million, or $1.07 per share.
Events and decisions underlying the 1992 restructuring were as
follows:
- In Europe, the Corporation's earnings had been
unsatisfactory due to weak economies, high marketing
expenses incurred in entering certain markets and defending
against intense competition, and an inability to achieve
sales goals primarily in the tissue business. In 1992,
management decided to significantly reduce costs to improve
its long-term cost structure, competitive position and
financial performance. The cost-cutting measures included
reducing the workforce at mills where personnel costs were
too high in relation to competition and focusing on
production of fewer products at each mill to simplify the
manufacturing process. The principal mills affected were in
Rouen, France, and Larkfield, England.
- In North America, partially in response to the easing of
border restrictions and tariffs, management decided to
integrate certain U.S. and Canadian operations to increase
manufacturing efficiencies and reduce overhead costs. Due
to changes in product design and improved rates of
operation, certain of the Corporation's older diaper
manufacturing equipment was no longer needed. As a
consequence, diaper production was discontinued at mills in
Fullerton, Calif., and Memphis, Tenn.
- The No. 2 newsprint machine at the Coosa Pines, Ala., mill
was shut down indefinitely in the first quarter of 1992 in
response to weak newsprint markets, and severance costs were
incurred. During the balance of 1992, depreciation
continued to be recorded on the machine while management
assessed its options. In December, management concluded
that there was no profitable manner in which to use the
machine in the foreseeable future, and wrote off the
remaining book value of the machine.
- Approximately $162 million of the $250 million restructuring
charge related to asset write-offs and $88 million related
to the accrual of liabilities for severance pay and other
cash obligations arising from the restructuring. These cash
obligations have been settled as of December 31, 1994.
Note 11. Supplemental Data (Millions of dollars)
<TABLE>
<CAPTION>
Supplemental Balance Sheet Data
December 31
Summary of Accounts Receivable and Inventories 1994 1993
--------------------------------------------------------------------------------------
<S> <C> <C>
Accounts Receivable:
From customers ........................................... $788.1 $688.9
Other .................................................... 76.9 64.6
Less allowances for doubtful accounts and
sales discounts ........................................ (17.5) (14.8)
------- ------
Total ................................................ $847.5 $738.7
====== ======
Inventories by Major Class:
At the lower of cost on the First-In, First-Out
(FIFO) method or market:
Raw materials ........................................ $180.8 $155.1
Work in process ...................................... 143.3 169.6
Finished goods ....................................... 495.0 439.9
Supplies and other ................................... 132.8 121.5
------ ------
951.9 886.1
Excess of FIFO cost over Last-In, First-Out
(LIFO) cost ............................................ (147.7) (110.2)
------ ------
Total ................................................ $804.2 $775.9
====== ======
</TABLE>
Total inventories include $337.6 million and $387.8 million of
inventories valued on the LIFO method at December 31, 1994 and
1993, respectively.
December 31
Summary of Accrued Expenses 1994 1993
---------------------------------------------------------------------------
Accrued advertising and promotion expense ............. $154.3 $ 139.4
Accrued salaries and wages ............................ 178.2 169.5
Other accrued expenses ................................ 301.4 285.7
------ -------
Total .............................................. $633.9 $ 594.6
====== =======
Supplemental Cash Flow Statement Data
Summary of Cash Flow Effects of Changes Year Ended December 31
in Operating Working Capital* 1994 1993 1992
-----------------------------------------------------------------------------
Accounts receivable ....................... $(140.4) $ 36.4 $ (84.0)
Inventories ............................... (55.5) (60.7) (38.2)
Prepaid expenses .......................... (13.6) 32.8 (10.0)
Trade accounts payable .................... 33.8 (50.9) 91.0
Other payables ............................ 32.0 16.5 (45.7)
Accrued expenses .......................... 13.6 (45.0) 7.1
Accrued income taxes ...................... (34.8) 26.6 (6.5)
Currency rate changes ..................... (19.3) 2.5 (18.8)
------- ------ -------
Changes in operating working capital ...... $(184.2) $(41.8) $(105.1)
======= ====== =======
* Excludes the effects of acquisitions, dispositions and the
1992 restructuring charge.
<TABLE>
<CAPTION>
Year Ended December 31
Other Cash Flow Data 1994 1993 1992
----------------------------------------------------------------------------------
<S> <C> <C> <C>
Interest paid .................................. $137.7 $126.1 $ 120.7
Interest capitalized ........................... 9.6 19.0 18.6
Income taxes paid .............................. 277.9 231.4 208.6
Increase (decrease) in cash and cash equivalents
due to exchange rate changes ................. 1.5 (3.1) (2.4)
Reconciliation of changes in cash and
cash equivalents:
Balance, January 1 ......................... $ 34.8 $ 41.1 $ 42.8
Decrease ................................... (11.0) (6.3) (1.7)
------ ------ -------
Balance, December 31 ....................... $ 23.8 $ 34.8 $ 41.1
====== ====== =======
</TABLE>
Note 12. Unaudited Quarterly Data
<TABLE>
<CAPTION>
(Millions of
dollars except
per share 1994 1993
amounts) Fourth(a) Third Second First Fourth Third(b) Second First
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales ..... $1,920.8 $1,836.8 $1,830.1 $1,776.5 $1,764.0 $1,781.0 $1,725.9 $1,702.0
Gross profit... 624.2 589.3 620.2 605.4 596.8 587.9 604.1 602.7
Operating
profit ...... 208.4 182.4 216.1 212.2 216.3 189.6 191.6 196.0
Net income .... 105.6 141.8 151.5 136.2 141.6 111.2 133.3 124.8
Per share basis:
Net income... .66 .88 .94 .85 .88 .69 .83 .78
Cash dividends:
Declared .. .44 .44 .44 .44 .43 .43 .43 -(c)
Paid ...... .44 .44 .44 .43 .43 .43 .43 .41
Market price:
High ...... 59 60 57 5/8 58 1/4 53 3/4 50 5/8 55 3/8 62
Low ....... 47 52 1/2 51 3/4 51 3/8 48 3/8 44 5/8 45 5/8 53 5/8
Close ..... 50 3/8 58 3/4 52 7/8 52 7/8 51 7/8 49 49 1/2 54 3/4
</TABLE>
(a) Results for the fourth quarter 1994 include a nonoperating
charge of $39.2 million, or $.24 per share, for the
Corporation's share of foreign currency losses incurred by its
43 percent-owned Mexican affiliate on the translation of U.S.
dollar-denominated liabilities into pesos. The translation
losses are related to the devaluation of the Mexican peso in
December 1994.
(b) Results for the third quarter 1993 include additional
income tax expense of $13.5 million, or $.08 per share, related
to the increase in the U.S. statutory income tax rate to
35 percent from 34 percent as a result of legislation enacted
in the third quarter effective as of January 1, 1993.
(c) Historically, the Corporation declares one dividend per
quarter; however, in the fourth quarter of 1992, two dividends
were declared and thus no dividend was declared in the first
quarter of 1993.
Note 13. Product Class and Geographic Data
For reporting purposes, the Corporation's products and services
are segmented into three classes. Class I includes tissue
products for household, commercial, institutional and
industrial uses; infant, child, feminine and incontinence care
products; industrial and commercial wipers; health care
products; and related products. Class II includes newsprint,
printing papers, premium business and correspondence papers,
tobacco industry papers and products, technical papers, and
related products. Class III includes aircraft services,
commercial air transportation and other products and services.
Information concerning consolidated operations by product class
and geographic area, as well as data for equity companies, is
presented in the tables below and on the following pages:
<TABLE>
<CAPTION>
Consolidated Operations by Product Class
Net Sales Operating Profit
(Millions of dollars) 1994 1993 1992 1994 1993 1992(a)
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Class I ....................... $5,911.4 $5,565.5 $5,781.5 $655.6 $624.6 $434.7
Class II ...................... 1,099.1 1,071.7 1,061.4 188.2 171.2 121.1
Class III ..................... 410.1 383.0 298.9 19.4 26.2 6.4
-------- -------- -------- ------ ------ ------
Combined ...................... 7,420.6 7,020.2 7,141.8 863.2 822.0 562.2
Interclass sales .............. (56.4) (47.3) (50.7) - - -
Unallocated items-net ......... - - - (44.1) (28.5) (19.1)
-------- -------- -------- ------ ------ ------
Consolidated .................. $7,364.2 $6,972.9 $7,091.1 $819.1 $793.5 $543.1
======== ======== ======== ====== ====== ======
</TABLE>
<TABLE>
<CAPTION>
(Millions of Assets Depreciation Capital Spending
dollars) 1994 1993 1992 1994 1993 1992 1994 1993 1992
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Class I ....... $5,225.9 $4,920.5 $4,667.8 $272.3 $242.1 $233.7 $393.4 $548.5 $600.9
Class II ...... 835.8 802.4 759.2 38.9 35.8 35.6 65.1 86.5 64.3
Class III ..... 208.7 196.3 232.5 10.4 9.9 10.6 12.4 9.8 9.0
-------- -------- -------- ------ ------ ------ ------ ------ ------
Combined ...... 6,270.4 5,919.2 5,659.5 321.6 287.8 279.9 470.9 644.8 674.2
Unallocated(b).. 649.3 616.7 608.5 8.0 8.1 9.1 14.3 9.7 16.3
Interclass
assets ...... (204.0) (155.2) (238.9) - - - - - -
-------- -------- -------- ------ ------ ------ ------ ------ ------
Consolidated .. $6,715.7 $6,380.7 $6,029.1 $329.6 $295.9 $289.0 $485.2 $654.5 $690.5
======== ======== ======== ====== ====== ====== ====== ====== ======
</TABLE>
(a) Operating profit in 1992 for Class I, II, III and Unallocated
includes $216.2 million, $21.5 million, $8.2 million and
$4.1 million, respectively, of the restructuring charge
described in Note 10.
(b) Assets include investments in equity companies of
$376.2 million, $398.3 million and $349.7 million in 1994, 1993
and 1992, respectively.
<TABLE>
<CAPTION>
Consolidated Operations by Geographic Area
Net Sales Operating Profit
(Millions of dollars) 1994 1993 1992 1994 1993 1992(a)
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
United States ............... $5,547.6 $5,282.5 $5,297.2 $817.2 $780.0 $571.4
Canada ...................... 613.9 568.7 587.3 25.0 (28.8) (17.1)
Intergeographic items(b)...... (334.0) (243.6) (236.1) - - -
-------- -------- -------- ------ ------ ------
North America ............... 5,827.5 5,607.6 5,648.4 842.2 751.2 554.3
Europe ...................... 1,074.8 917.0 1,016.9 (59.4) .9 (56.9)
Asia and Latin America ...... 544.2 501.0 443.5 80.4 69.9 64.8
-------- -------- -------- ------ ------ ------
Combined .................... 7,446.5 7,025.6 7,108.8 863.2 822.0 562.2
Intergeographic items ....... (82.3) (52.7) (17.7) - - -
Unallocated items-net ....... - - - (44.1) (28.5) (19.1)
-------- -------- -------- ------ ------ ------
Consolidated ................ $7,364.2 $6,972.9 $7,091.1 $819.1 $793.5 $543.1
======== ======== ======== ====== ====== ======
</TABLE>
Assets
(Millions of dollars) 1994 1993 1992
--------------------------------------------------------------
United States ............... $3,805.6 $3,720.8 $3,626.4
Canada ...................... 460.0 487.8 499.4
Intergeographic items ....... (55.0) (35.6) (34.7)
-------- -------- --------
North America ............... 4,210.6 4,173.0 4,091.1
Europe ...................... 1,371.4 1,085.2 965.5
Asia and Latin America ...... 667.2 630.2 594.4
-------- -------- --------
Combined .................... 6,249.2 5,888.4 5,651.0
Intergeographic items ....... (182.8) (124.4) (230.4)
Unallocated items-net(c)...... 649.3 616.7 608.5
-------- -------- --------
Consolidated ................ $6,715.7 $6,380.7 $6,029.1
======== ======== ========
(a) Operating profit in 1992 for the U.S., Canada, Europe, Asia
and Unallocated includes $148.9 million, $13.9 million,
$81.8 million, $1.3 million and $4.1 million, respectively, of
the restructuring charge described in Note 10.
(b) Net sales include $226.0 million, $162.3 million and
$185.8 million by operations in Canada to the U.S. in 1994,
1993 and 1992, respectively.
(c) Assets include investments in equity companies of
$376.2 million, $398.3 million and $349.7 million in 1994, 1993
and 1992, respectively.
<TABLE>
<CAPTION>
Kimberly-Clark's Share
Income Before of Income Before
Equity Interests Equity Interests
(Millions of dollars) 1994 1993 1992(a) 1994 1993 1992(a)
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
United States ................ $478.0 $432.9 $310.8 $478.0 $432.9 $310.8
Canada ...................... 16.0 (17.9) (9.6) 16.0 (17.9) (9.6)
------ ------ ------ ------ ------ ------
North America ................ 494.0 415.0 301.2 494.0 415.0 301.2
Europe ....................... (66.6) (19.6) (61.8) (70.2) (24.5) (66.5)
Asia and Latin America........ 36.8 33.2 36.2 24.2 22.4 27.4
------ ------ ------ ------ ------ ------
Consolidated Companies ....... $464.2 $428.6 $275.6 $448.0 $412.9 $262.1
====== ====== ====== ====== ====== ======
</TABLE>
(a) Income in 1992 for the U.S., Canada, Europe and Asia includes
$98.9 million, $8.6 million, $63.7 million and $.8 million,
respectively, of the restructuring charge described in Note 10.
Intercompany sales of products between classes or geographic
areas are made at market prices and are referred to as
interclass sales or intergeographic items.
Assets reported by product class or geographic area represent
assets which are directly used and an allocated portion of
jointly used assets. These assets include receivables from
other product classes or geographic areas and are referred to
as interclass assets or intergeographic items. Expense and
asset amounts not associated with classes or geographic areas
are referred to as unallocated items-net.
<TABLE>
<CAPTION>
Equity Companies' Data by Geographic Area
Kimberly-
Clark's
Share
Net Gross Operating Net of Net
(Millions of dollars) Sales Profit Profit Income Income
------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 31, 1994
Latin America(b) ........... $1,346.2 $514.3 $365.1 $149.2(a) $65.5(a)
Asia, Australia, Africa
and Middle East ......... 577.9 202.5 58.7 37.4 21.6(c)
-------- ------ ------ ------ -----
Total ................... $1,924.1 $716.8 $423.8 $186.6 $87.1
======== ====== ====== ====== =====
December 31, 1993
Latin America ............. $1,120.9 $464.0 $294.7 $196.2 $86.4
Asia, Australia and
Middle East ............. 385.9 127.4 38.2 24.7(d) 11.6
-------- ------ ------ ------ -----
Total ................... $1,506.8 $591.4 $332.9 $220.9 $98.0
======== ====== ====== ====== =====
December 31, 1992
Latin America ............. $ 953.2 $374.1 $221.8 $150.9(d) $68.5
Asia, Australia and
Middle East ............. 377.6 142.2 50.7 31.3(d) 14.4
-------- ------ ------ ------ -----
Total ................... $1,330.8 $516.3 $272.5 $182.2 $82.9
======== ====== ====== ====== =====
</TABLE>
<TABLE>
<CAPTION>
Non- Non- Stock-
Current Current Current Current holders'
(Millions of dollars) Assets Assets Liabilities Liabilities Equity
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
December 31, 1994
Latin America(e) ............ $552.2 $ 539.4 $275.4 $295.7 $520.5
Asia, Australia, Africa
and Middle East ......... 164.8 454.9 159.6 151.7 308.4
-------- ------ ------ ------ -----
Total ................... $717.0 $ 994.3 $435.0 $447.4 $828.9
======== ====== ====== ====== =====
December 31, 1993
Latin America ............. $551.3 $ 678.3 $245.2 $311.2 $673.2
Asia, Australia and
Middle East ............. 98.8 342.3 85.0 148.4 207.7
-------- ------ ------ ------ -----
Total ................... $650.1 $1,020.6 $330.2 $459.6 $880.9
======== ====== ====== ====== =====
December 31, 1992
Latin America ............. $491.4 $ 556.0 $226.4 $233.3 $587.7
Asia, Australia and
Middle East ............. 94.8 325.5 76.4 162.6 181.3
-------- ------ ------ ------ -----
Total ................... $586.2 $ 881.5 $302.8 $395.9 $769.0
======== ====== ====== ====== =====
</TABLE>
(a) Net income and Kimberly-Clark's share of net income in Latin
America in 1994 include a nonoperating charge of
$91.2 million and $39.2 million, respectively, for foreign
currency losses incurred by the Corporation's 43 percent-
owned Mexican affiliate in Mexico on the translation of U.S.
dollar-denominated liabilities into pesos. The translation
losses are related to the devaluation of the Mexican peso in
December 1994.
(b) Results for Latin America in 1994 include operations of a
newly formed joint venture in Argentina. In June 1994, the
Corporation combined its wholly owned subsidiary in
Argentina with the operations of another company to create
the joint venture.
(c) The Corporation's share of net income for 1994 includes a
gain of $10.0 million due to the readoption of equity
accounting for the Corporation's South African affiliate.
Income taxes of $3.7 million related to this item are
reflected in the provision for income taxes in the
consolidated income statement.
(d) Net income in Australia in 1993 includes a $7.8 million
credit from a decrease in the statutory income tax rate to
33 percent from 39 percent. Net income in Mexico and
Australia in 1992 includes a $4.5 million charge and
$1.6 million credit, respectively, from the cumulative
effect of adopting SFAS No. 109. Kimberly-Clark's share of
these items is included in the cumulative effects of
accounting changes in the consolidated income statement.
(e) Includes effect of December 1994 devaluation of the Mexican
peso on the translated balance sheet of the Corporation's
Mexican affiliate.
Equity companies are principally engaged in Class I operations.
A listing of the Corporation's percentage ownership of the
common stock of each significant subsidiary and equity company
is contained elsewhere in this annual report. Kimberly-Clark
de Mexico, S.A. de C.V. is partially owned by the public and
its stock is publicly traded in Mexico. At December 31, 1994
the Corporation's investment in this equity company was
$165.4 million, and the estimated fair value was $1.0 billion
based on quoted market prices for publicly traded shares.
INDEPENDENT AUDITORS' REPORT
Kimberly-Clark Corporation and Subsidiaries
Kimberly-Clark Corporation, Its Directors and Stockholders:
We have audited the accompanying consolidated balance sheet of
Kimberly-Clark Corporation and Subsidiaries as of December 31,
1994 and 1993 and the related consolidated income and cash flow
statements for each of the three years in the
period ended December 31, 1994. These financial statements are
the responsibility of the Corporation's management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management,
as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable
basis for our opinion.
In our opinion, such consolidated financial statements of
Kimberly-Clark Corporation and Subsidiaries present fairly, in
all material respects, the financial position of the companies
at December 31, 1994 and 1993, and the results of their
operations and their cash flows for each of the three years in
the period ended December 31, 1994, in conformity with generally
accepted accounting principles.
As discussed in Notes 2 and 3 to the consolidated financial
statements, in 1992 the Corporation changed its methods of
accounting for Income Taxes and Postretirement Health Care and
Life Insurance Benefits to conform with Statements of Financial
Accounting Standards No. 109 and 106, respectively.
/s/ Deloitte & Touche LLP
-------------------------
Deloitte & Touche LLP
Dallas, Texas January 27, 1995
AUDIT COMMITTEE CHAIRMAN'S LETTER
Kimberly-Clark Corporation and Subsidiaries
The members of the Audit Committee are selected by the board of
directors. During 1994, the committee consisted of four
outside directors and met three times.
The Audit Committee oversees the financial reporting process on
behalf of the board of directors. As part of that
responsibility, the committee recommended to the board of
directors, subject to stockholder approval, the selection of
the Corporation's independent public accountants. The Audit
Committee discussed the overall scope and specific plans for
audits with the Corporation's internal auditors and
Deloitte & Touche LLP. The committee also discussed the
Corporation's annual consolidated financial statements and the
adequacy of its internal controls. The committee met regularly
with the internal auditors and Deloitte & Touche LLP, without
management present, to discuss the results of their audits,
their evaluations of the Corporation's internal controls, and
the overall quality of the Corporation's financial reporting.
The meetings also were designed to facilitate any private
communication with the committee desired by the internal
auditors or independent public accountants.
/s/ Louis E. Levy
----------------------------
Louis E. Levy
Chairman, Audit Committee January 27, 1995
MANAGEMENT'S RESPONSIBILITY FOR FINANCIAL REPORTING
Kimberly-Clark Corporation and Subsidiaries
The management of Kimberly-Clark Corporation is responsible for
conducting all aspects of the business, including the
preparation of the financial statements in this annual report.
The financial statements have been prepared using generally
accepted accounting principles considered appropriate in the
circumstances to present fairly the Corporation's consolidated
financial position, results of operations and cash flows on a
consistent basis. Management also has prepared the other
information in this annual report and is responsible for its
accuracy and consistency with the financial statements.
As can be expected in a complex and dynamic business
environment, some financial statement amounts are based on
management's estimates and judgments. Even though estimates
and judgments are used, measures have been taken to provide
reasonable assurance of the integrity and reliability of the
financial information contained in this annual report. These
measures include an effective control-oriented environment in
which the internal audit function plays an important role, an
Audit Committee of the board of directors which oversees the
financial reporting process, and independent audits.
One characteristic of a control-oriented environment is a
system of internal control over financial reporting and over
safeguarding of assets against unauthorized acquisition, use or
disposition, designed to provide reasonable assurance to
management and the board of directors regarding preparation of
reliable published financial statements and such asset
safeguarding. The system is supported with written policies
and procedures, contains self-monitoring mechanisms and is
audited by the internal audit function. Appropriate actions
are taken by management to correct deficiencies as they are
identified. All internal control systems have inherent
limitations, including the possibility of circumvention and
overriding of controls, and, therefore, can provide only
reasonable assurance as to financial statement preparation and
such asset safeguarding.
The Corporation has also adopted a code of conduct which, among
other things, contains policies for conducting business affairs
in a lawful and ethical manner in each country in which it does
business, for avoiding potential conflicts of interest, and for
preserving confidentiality of information and business ideas.
Internal controls have been implemented to provide reasonable
assurance that the code of conduct is followed.
The financial statements have been audited by the independent
accounting firm, Deloitte & Touche LLP. During their audits,
the independent auditors were given unrestricted access to all
financial records and related data, including minutes of all
meetings of stockholders and the board of directors and all
committees of the board. Management believes that all
representations made to the independent auditors during their
audits were valid and appropriate.
During the audits conducted by both the independent auditors
and the internal audit function, management received
recommendations to strengthen or modify internal controls in
response to developments and changes. Management has adopted,
or is in the process of adopting, all recommendations which are
cost-effective.
The Corporation has assessed its internal control system as of
December 31, 1994 in relation to criteria for effective
internal control over financial reporting described in
"Internal Control - Integrated Framework" issued by the
Committee of Sponsoring Organizations of the Treadway
Commission. Based on this assessment, management believes
that, as of December 31, 1994, its system of internal control
over the preparation of its published interim and annual
financial statements and over safeguarding of assets against
unauthorized acquisition, use or disposition met those
criteria.
/s/ Wayne R. Sanders /s/ John W. Donehower
---------------------------- --------------------------
Wayne R. Sanders John W. Donehower
Chairman of the Board Senior Vice President and
and Chief Executive Officer Chief Financial Officer
January 27, 1995
MANAGEMENT'S DISCUSSION AND ANALYSIS
Management believes that the following commentary and tables
appropriately discuss and analyze the comparative results of
operations and the financial condition of the Corporation for
the periods covered.
<TABLE>
<CAPTION>
Analysis Of Consolidated Operating Results
By Product Class
($ Millions)
% Change % of 1994
Net Sales 1994 1993 vs. 1993 Consolidated
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class I ........................ $5,911.4 $5,565.5 + 6.2% 80.3%
Class II ....................... 1,099.1 1,071.7 + 2.6 14.9
Class III ...................... 410.1 383.0 + 7.1 5.6
Adjustments .................... (56.4) (47.3) (.8)
-------- -------- -----
Consolidated ................... $7,364.2 $6,972.9 + 5.6% 100.0%
======== ======== =====
</TABLE>
<TABLE>
<CAPTION>
% Change % Return on Sales
Operating Profit 1994 1993 vs. 1993 1994 1993
-------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Class I ........................ $ 655.6 $ 624.6 + 5.0% 11.1% 11.2%
Class II ....................... 188.2 171.2 + 9.9 17.1 16.0
Class III ...................... 19.4 26.2 -26.0 4.7 6.8
Adjustments .................... (44.1) (28.5)
-------- --------
Consolidated ................... $ 819.1 $ 793.5 + 3.2% 11.1% 11.4%
======== ========
</TABLE>
Product Classes referred to in this Management's Discussion and
Analysis are:
- Class I includes tissue products for household,
commercial, institutional and industrial uses; infant,
child, feminine and incontinence care products;
industrial and commercial wipers; health care
products; and related products.
- Class II includes newsprint, printing papers, premium
business and correspondence papers, tobacco industry
papers and products, technical papers, and related
products.
- Class III includes aircraft services, commercial air
transportation and other products and services.
Commentary:
Net sales increased as a result of higher sales volumes for
most of the Corporation's businesses, which more than offset
the effect of lower selling prices. Sales volumes improved 6.9
percent compared to 1993, despite the effect of businesses
sold.
- Sales volumes were higher in North America for Huggies
disposable diapers, Kotex feminine care products,
Huggies baby wipes, Depend and Poise incontinence care
products, Kleenex facial tissue, and professional
health care products; tobacco industry papers,
technical papers and newsprint; Neenah Paper's premium
business and correspondence papers; pulp; and Midwest
Express Airlines, Inc.
- Sales volumes increased for consumer products in
Europe, primarily due to the introduction and
expansion of Huggies disposable diapers and the July
1994 acquisition of the feminine care products
business of VP-Schickedanz AG, a German company.
- Sales volumes also improved for consumer products in
Asia, primarily in Korea.
- Sales volumes declined in North America for Huggies
Pull-Ups training pants due, in part, to the entry of
a major competitor into the market with a branded
product in early 1994 and market share growth of
private-label and economy-branded competitors.
- Sales volumes also declined for consumer bathroom
tissue in Canada and household towels and private-
label bathroom tissue in the U.S. These declines were
partially offset by improved sales volumes for Kleenex
premium bathroom tissue in the U.S.
- Selling prices were lower in both North America and
Europe for consumer tissue products, in North America
for feminine care products and at Midwest Express
Airlines, Inc., principally in response to competitive
business conditions. Selling prices increased for
pulp and premium business and correspondence papers.
Gross profit improved in absolute terms, 2.0 percent, but
declined as a percentage of sales, primarily because of the
lower selling prices, higher labor and fiber costs and the
lower sales volumes for training pants in North America.
- Cost reductions and manufacturing efficiencies were
achieved in certain North American consumer products
businesses, most notably the disposable diaper
business, and in the newsprint and tobacco industry
papers businesses.
- Product improvement costs were higher, primarily for
the new Huggies Supreme diapers in the U.S. and
Huggies UltraTrim diapers in Canada.
- Start-up costs were incurred at the Corporation's new
diaper plant in Europe and diaper and feminine care
products facility in Korea.
Consolidated operating profit increased 3.2 percent compared
with 1993, but declined as a percentage of sales due primarily
to the lower gross profit margin.
- Promotion expenses declined in North America for
consumer tissue products, in connection with the lower
selling prices, and for feminine care products, due to
timing of product introductions, but increased for
disposable diapers in response to competitive
activity.
- Selling expenses were higher in support of business
expansions and the higher sales volumes.
- Results for the U.S. consumer bathroom tissue business
improved as a result of manufacturing efficiencies and
lower promotion spending, which more than offset the
effect of reduced selling prices.
- Operating losses in Europe exceeded those of a year
ago due primarily to the cost of launching Huggies
disposable diapers. Results for the consumer bathroom
tissue business in Europe remained poor because of
industry overcapacity, weak prices and higher fiber
costs.
- Research expenses were higher in 1994 to support new
product and process development.
- General expense in 1993 included a $6.5 million charge
related to the settlement of a class action lawsuit
brought by a group of property and business owners
near the Coosa Pines, Ala., pulp and newsprint mill.
<TABLE>
<CAPTION>
By Geography
($ Millions)
% Change % of 1994
Net Sales 1994 1993 vs. 1993 Consolidated
--------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
North America ............... $5,827.5 $5,607.6 + 3.9% 79.1%
Outside North America ....... 1,619.0 1,418.0 +14.2 22.0
Adjustments ................. (82.3) (52.7) (1.1)
-------- -------- -----
Consolidated ................ $7,364.2 $6,972.9 + 5.6% 100.0%
======== ======== =====
</TABLE>
<TABLE>
<CAPTION>
% Change % Return on Sales
Operating Profit 1994 1993 vs. 1993 1994 1993
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
North America ............... $ 842.2 $ 751.2 +12.1% 14.5% 13.4%
Outside North America ....... 21.0 70.8 -70.3 1.3 5.0
Adjustments ................. (44.1) (28.5)
-------- --------
Consolidated ................ $ 819.1 $ 793.5 + 3.2% 11.1% 11.4%
======== ========
</TABLE>
<TABLE>
<CAPTION>
% Change
Net Income 1994 1993 vs. 1993
---------------------------------------------------------------
<S> <C> <C> <C>
North America ............... $ 494.0 $ 415.0 +19.0%
Outside North America ....... 41.1 95.9 -57.1
-------- --------
Net Income .................. $ 535.1 $ 510.9 + 4.7%
======== ========
</TABLE>
Additional Commentary:
- The decline in operating profit outside North America
is attributable to the losses in Europe, as previously
discussed.
- Interest expense increased $16.8 million primarily as
a result of higher debt levels and a lower amount of
interest capitalized.
- Other income improved primarily as a result of net
gains on the sales of woodlands and the sale of the
Corporation's tissue mill in Memphis, Tenn., adhesive-
coated label stock business in Troy, Ohio, tissue
subsidiary in Brazil and Spenco Medical Corporation in
Waco, Texas.
- Net income outside North America was adversely
affected by the devaluation of the Mexican peso, which
during December 1994 lost more than 32 percent of its
value expressed in U.S. dollars. Kimberly-Clark's 43
percent-owned Mexican affiliate, Kimberly-Clark de
Mexico, S.A. de C.V., has financed approximately $330
million of its operations with U.S. dollar-denominated
liabilities. As a result of the remeasurement of
dollar-denominated liabilities by this equity company,
a nonoperating, after-tax foreign currency loss was
incurred, of which Kimberly-Clark's share was $39.2
million, or $.24 per share.
- The Corporation's effective tax rate declined to 37.3
percent from 39.9 percent in 1993. The comparison is
affected by lower taxes on unremitted earnings of the
Corporation's Mexican affiliate due to the peso
devaluation loss, the previously mentioned sale of the
Corporation's Brazilian tissue subsidiary, and by
benefits from company-owned life insurance and U.S.
affordable housing tax credits. In addition, the
enactment of the 1993 Tax Act increased deferred
income taxes related to prior years, which reduced
1993 net income $8.8 million, or $.05 per share. This
tax change had the effect of increasing the 1993
effective tax rate 1.2 percentage points.
- The Corporation's share of net income from equity
companies, which includes the translation loss from
the peso devaluation, fell 11.1 percent. Excluding
the effect of the peso devaluation, higher net income
was earned at the Corporation's equity affiliate in
Mexico. In addition, net income was up at affiliates
in Australia, Colombia and Argentina.
-- Sales volumes increased more than 20 percent in
Mexico.
-- Earnings from Australia improved primarily because
of higher sales volumes, improved operations and a
favorable change in currency exchange rates.
-- Earnings in Colombia improved on the strength of
higher sales volumes and selling prices.
-- The Corporation expanded its Argentine operations
through investment in a consumer products
affiliate in that country, which began operation
in the third quarter of 1994.
-- Equity company results in 1994 benefited from the
previously announced readoption of equity
accounting for the Corporation's investment in its
South African affiliate, Carlton Paper Corporation
Limited. The Corporation intends to buy
additional shares in Carlton which will result in
that company becoming a consolidated subsidiary.
Adjustments:
- Adjustments to sales shown in the preceding tables
consist of intercompany sales of products between
product classes or geographic areas. Adjustments to
operating profit consist of expenses not associated
with product classes or geographic areas.
LIQUIDITY AND CAPITAL RESOURCES
Year Ended
December 31
($ Millions) 1994 1993
-----------------------------------------------------------------
Cash provided by operations .................. $669.0 $746.7
Capital spending ............................. 485.2 654.5
Ratio of total debt to capital ............... 38.9% 39.1%
Pretax interest coverage - times ............. 6.6 6.6
Commentary:
- Despite higher net income, cash provided by operations
in 1994 declined due to an increase in operating
working capital needs of $184.2 million. Major
factors affecting the change in operating working
capital, excluding businesses bought and sold, were:
-- an increase in accounts receivable of $140.4
million related principally to higher net sales,
especially in December;
-- an increase in inventories of $55.5 million due,
in part, to preparation for the 1995 launch of
diapers in France; and
-- higher trade accounts payable and accrued expenses
associated with the overall growth in the
Corporation's businesses.
- The decline in capital spending of $169.3 million for
1994 reflects the completion of several major
projects, including consumer products plants in
Neenah, Wis.; Barton-upon-Humber, England; and Taejon,
Korea.
- In July 1994, the Corporation's wholly owned
subsidiary Kimberly-Clark GmbH acquired the feminine
care products business of VP-Schickedanz AG, a German
company, for approximately $123 million; $97.2 million
was paid in 1994 and the balance is payable in 1995.
- In December 1994, the Corporation purchased a 90
percent interest in the Handan Comfort and Beauty
Group, a manufacturer of feminine care products in
China.
- In 1994, four cash dividends were paid aggregating
$281.8 million, or $1.75 per share. In 1993, four
cash dividends were paid aggregating $273.4 million,
or $1.70 per share.
- In 1994, the Corporation repurchased approximately one
million shares of its common stock for $52.2 million.
The shares will be used for general corporate
purposes, including certain of the Corporation's
employee benefit and compensation plans. The
Corporation intends to purchase up to four million
additional shares over several years as market
conditions warrant.
- The ratio of total debt to capital remains outside the
Corporation's target range of 28 to 32 percent due, in
part, to the cumulative effects of weaker currencies
in certain non-U.S. operations, most notably Canada,
Mexico and the United Kingdom, which had the effect of
reducing stockholders' equity by $310.0 million at
December 31, 1994. Capital is the sum of total debt,
minority owners' interests in subsidiaries and
stockholders' equity.
- A shelf registration for $200 million of debt
securities is on file with the Securities and Exchange
Commission. The filing allows flexibility to issue
debt promptly if the Corporation's needs and market
conditions warrant.
- In February 1994, the Corporation issued $100 million
of 6-7/8% Debentures due February 2014. The proceeds
were used principally to reduce short-term debt.
- In June 1994, the Corporation, through the Mississippi
Business Finance Corporation, issued $40 million of
7.55% industrial development revenue bonds due June
2004. The proceeds are being used to finance
improvements at the Corporation's nonwovens products
facility in Corinth, Miss.
- Revolving credit facilities of $600 million are in
place for general corporate purposes and to back up
commercial paper borrowings. Of these facilities,
which are currently unused, $300 million expires in
September 1995, and $300 million expires in December
1999.
- The Corporation's long-term debt securities have a
Double-A rating, and its commercial paper is rated in
the top category.
- Management believes that the Corporation's ability to
generate cash from operations and its capacity to
issue short-term and long-term debt are adequate to
fund working capital, capital spending and other needs
in the foreseeable future.
TRENDS IN THE LAST THREE YEARS
<TABLE>
<CAPTION>
Net Sales
($ Billions) 1994 1993 1992
---------------------------------------------------------------------------
<S> <S> <S> <S>
Principal products:
Disposable diapers .............................. $ 1.7 $ 1.5 $ 1.6
Household and other tissue-based products ....... 1.8 1.9 1.9
Feminine care products .......................... .7 .7 .7
All other ....................................... 3.2 2.9 2.9
----- ----- -----
Consolidated ...................................... $ 7.4 $ 7.0 $ 7.1
===== ===== =====
</TABLE>
- Consolidated net sales grew $.6 billion since 1991.
The increase was due to improved sales volumes,
partially offset by lower selling prices.
<TABLE>
<CAPTION>
Analysis of Operating Profit as a Percentage of Net Sales
1994 1993 1992
--------------------------------------------------------------------------
<S> <C> <C> <C>
Net sales ........................................ 100.0% 100.0% 100.0%
Less:
Cost of products sold ........................... 66.9 65.7 63.9
Marketing expense ............................... 14.7 15.3 17.7
Research expense ................................ 2.3 2.3 2.2
General expense ................................. 5.0 5.3 5.0
Restructuring charge ............................ - - 3.5
----- ----- ----
Operating profit ................................. 11.1% 11.4% 7.7%
===== ===== ====
</TABLE>
Operating profit margin declined during 1994 as a result
of lower selling prices, higher labor and fiber costs and
lower sales volumes for training pants in North America
which more than offset the effect of higher sales volumes
for most other products, improved manufacturing
efficiencies and lower marketing expenses. Excluding the
1992 restructuring charge discussed below, the improvement
in operating profit margin in 1993 was primarily
attributable to higher sales volumes and lower raw
material and marketing costs offset, in part, by lower
selling prices. Other factors affecting operating profit
margins for the last three years were:
- higher product improvement and start-up costs,
particularly in 1994 and 1993,
- higher than historical marketing expenses in 1992,
- lower net price realizations for newsprint in all
three years, despite recent pricing improvement,
- poor results for consumer and industrial bathroom
tissue businesses in North America, primarily in 1993
and 1992, and in Europe in all three years, and
- litigation settlement expenses in 1993 and recovery of
legal fees in 1992.
<TABLE>
Changes in Net Sales and Earnings versus the Preceding Year
1994 1993
------------------------------------------------------------------------------------------
<S> <C> <C>
Net sales ............................................................ +5.6% - 1.7%
Gross profit ......................................................... +2.0 - 6.5
Operating profit ..................................................... +3.2 + 46.1
Income before cumulative effects of accounting changes ............... +4.7 + 48.1
Net income ........................................................... +4.7 +278.4
Per share basis:
Income before cumulative effects of accounting changes ............. +4.7 + 47.9
Net income ......................................................... +4.7 +278.6
</TABLE>
The comparison of 1994 to 1993 has previously been discussed.
Highlights of 1993 compared to 1992 are as follows.
- Net sales declined in 1993 as a result of lower
selling prices and currency translation which more
than offset higher sales volumes.
- Gross profit declined in 1993 primarily as a result of
lower selling prices.
- Excluding the effect of the 1992 restructuring charge,
operating profit was virtually unchanged but improved
slightly as a percentage of sales. The gross profit
decline was more than offset by lower marketing
expenses.
- Excluding the 1992 restructuring charge, income before
cumulative effects of accounting changes declined 1.2
percent in 1993. On a per share basis, it declined
1.7 percent. The decline in net income and net income
per share was primarily attributable to the effect of
the 1993 increase in the U.S. statutory income tax
rate, as discussed below.
- Net income was adversely affected by the enactment of
the 1993 Tax Act, which increased the U.S. federal
income tax rate to 35 percent from 34 percent. This
tax change reduced 1993 net income by $15.5 million or
$.10 per share. Five cents related to 1993 and five
cents related to deferred taxes for prior years. The
effective income tax rate declined to 39.9 percent in
1993 from 40.3 percent in 1992. Significant factors
affecting the comparison were lower operating losses
in certain non-U.S. operations for which no income tax
benefits were recognized in 1993, a lower 1993
effective state income tax rate and lower effective
tax rates associated with certain other non-U.S.
operations in 1993, partially offset by the U.S. tax
increase. In addition, the 1992 effective income tax
rate was unusually high because a portion of the 1992
restructuring charge related to certain non-U.S.
operations for which no tax benefits were recognized.
- The Corporation's share of net income of equity
companies increased in 1993, primarily because of
higher sales volumes and selling prices at Kimberly-
Clark de Mexico, S.A. de C.V.
1992 RESTRUCTURING
In 1992, the Corporation announced a restructuring plan to
strengthen its competitive position in consumer and service
products operations in Europe and certain operations in North
America. The plan included eliminating approximately 800
positions, principally in Europe; restructuring manufacturing
facilities at Rouen, France, and Larkfield, England;
discontinuing diaper production at mills in Fullerton, Calif.,
and Memphis, Tenn.; writing off the No. 2 newsprint machine at
the Coosa Pines, Ala., mill; and integrating certain U.S. and
Canadian consumer and service products operations. The $250.0
million pretax cost of the restructuring was charged to 1992
operating profit. The restructuring reduced 1992 net income by
$172.0 million, or $1.07 per share. The Corporation is realizing
lower ongoing operating costs and improved operating cash flow from the
restructured operations. Additional information concerning
events and decisions which gave rise to the restructuring plan
is presented in Note 10 to the Financial Statements.
1992 ACCOUNTING CHANGES
New required accounting rules were adopted in 1992 for
postretirement health care and life insurance benefits and for
income taxes which resulted in a one-time "catch-up" charge of
$210.0 million, or $1.31 per share, against 1992 net income.
These changes had no effect on cash flow.
ENVIRONMENTAL MATTERS
The Corporation is subject to federal, state and local
environmental protection laws and regulations with respect to
its business operations and is operating in compliance with, or
taking action aimed at ensuring compliance with, such laws and
regulations. Compliance with these laws and regulations is not
expected to materially affect the Corporation's business or
competitive position. Management does not believe that the
Corporation has been identified as a potentially responsible
party at any Environmental Protection Agency-designated cleanup
site which could have a material adverse impact on the
Corporation's business or results of operations. Additional
information concerning environmental matters is disclosed in
the Corporation's annual report to the Securities and Exchange
Commission on Form 10-K for the year ended December 31, 1994
under the "Business" and "Legal Proceedings" sections.
FOREIGN CURRENCY RISKS, HEDGING ACTIVITIES AND INFLATION RISKS
The Corporation's foreign currency risks and its hedging
activities are discussed in Note 5 to the Financial Statements.
As previously discussed, the Mexican peso was devalued in
December 1994 and resulted in a foreign currency loss to the
Corporation. Excluding the foreign currency loss, the
Corporation's Mexican affiliate accounted for approximately 15
percent of Kimberly-Clark's 1994 consolidated net income.
Historically, the Corporation's Mexican affiliate has been able
to increase both selling prices and sales volumes to recover,
over time, the effects of changes in currency exchange rates,
as well as cost increases. However, management is unable at
this time to assess the effect of this foreign currency risk on
1995 consolidated net income because of the uncertainty
surrounding the current Mexican economy, the value of the peso,
and the effectiveness of the affiliate's 1995 actions to
increase selling prices and sales volumes.
The Corporation's inflation risks are managed on an entity-by-
entity basis through selective price increases, productivity
increases and cost containment measures. The net assets of
subsidiaries and affiliates operating in hyperinflationary
countries are not significant. The devaluation of the Mexican
peso and uncertainties in the Mexican economy may increase that
country's inflation rate.
OUTLOOK - 1995
During the year, Kimberly-Clark expects to benefit from price
increases on tissue, newsprint and other paper products. On
the other hand, in at least the first quarter of the year, the
Corporation will face the uncertain impact of the weaker
Mexican peso and the need to match a competitor's price
reductions on diapers in the U.S.
Regarding the peso, Kimberly-Clark de Mexico has experienced
devaluations in the past. Based on these experiences, Kimberly-Clark
management expects that the company will continue its trend of
strong sales and earnings growth over the long term.
In 1995, with start-up costs at Kimberly-Clark's Barton-upon-
Humber diaper plant behind it, with sales volumes improving and
with tissue prices increasing, the Corporation's position in
Europe should be stronger, and its losses are expected to be
less than in 1994.
For 1995, the Corporation's present estimate of capital
spending is in the range of $500 million to $600 million.
In terms of capital structure, the Corporation's long-term
objective is to maintain total debt to capital in a range of 28
to 32 percent. While the year-end ratio of 38.9 percent was
higher than expected, primarily as a result of the Mexican peso
devaluation, the ratio is expected to be closer to the
Corporation's target by the end of 1995.
To maximize stockholder value, the Corporation has modified its
previously announced plan for divesting its North American pulp
and newsprint operations. Because of rapid escalation of pulp
and newsprint prices and deterioration in the Canadian equity
market in late 1994, Kimberly-Clark has concluded that, for
now, the benefits of retaining ownership of these operations
outweigh the longer-term strategic benefits of selling them.
The Corporation's long-term strategy continues to be the
divestiture of these units; however, the revised plan should
benefit Kimberly-Clark's earnings during what is expected to be
a peak period for pulp and newsprint businesses.
ADDITIONAL INFORMATION
Dividends and Dividend Reinvestment Plan
Quarterly dividends have been paid continually since 1935. Dividends are
paid on or about the second day of January, April, July and October. The
Automatic Dividend Reinvestment service of The First National Bank of
Boston is available to Kimberly-Clark stockholders of record. The service
makes it possible for Kimberly-Clark stockholders of record to have their
dividends automatically reinvested in common stock and to make additional
cash investments up to $3,000 per quarter.
Stock Exchanges
Kimberly-Clark common stock is listed on the New York, Chicago and Pacific
stock exchanges. The ticker symbol is KMB.
Trademarks
The brand names mentioned in this report -- Kleenex(R), Huggies(R), Pull-
Ups(R), Kotex(R), New Freedom(R), Depend(R), Poise(R), Hi-Dri(R),
Kimguard(R), GoodNites(R), Discreet(R), Kotex Understands(R), Kimwipes(R),
Kimbies (R), Classic(R), Classic Crest(R), Classic Columns(R), Camelia(R),
Tampona(R), Comfort and Beauty(R), Skyway (SM) and Midwest Express(R) -- are
trademarks or service marks of Kimberly-Clark Corporation or its
subsidiaries.
CONSOLIDATED SUBSIDIARIES AND EQUITY COMPANIES
The following list includes certain companies which were
20 to 100 percent owned directly or indirectly by Kimberly-
Clark Corporation, a Delaware corporation, Dallas, Texas, as of
December 31, 1994. Kimberly-Clark's percentage ownership of each
company is 100 percent unless otherwise indicated.
This list includes all significant subsidiaries and equity
companies. The place of incorporation is the same as the location of
the company except as shown parenthetically.
CONSOLIDATED SUBSIDIARIES
Astral Aviation, Inc. (Delaware) Milwaukee, Wisconsin
Avent, Inc. (Delaware) Tucson, Arizona
Chengdu Comfort & Beauty Sanitary Articles Co., Ltd., China (90%)
Handan Comfort & Beauty (Group) Co., Ltd., China (90%)
Jet Professionals, Inc. (Delaware) Fairfield, Connecticut
K-C Advertising, Inc. (Delaware) Neenah, Wisconsin
K-C Aviation Inc. (Delaware) Dallas, Texas
Kimberly-Clark Benelux Operations B.V., Veenendaal, Netherlands
Kimberly-Clark Canada European Finance B.V., Netherlands
Kimberly-Clark Canada Global Finance Ltd., Barbados
Kimberly-Clark Canada Inc., Mississauga, Ontario, Canada
Kimberly-Clark de Centro America, S.A., Sitio del Nino,
El Salvador (75%)
Kimberly-Clark Costa Rica, S.A., Cartago, Costa Rica (75%)
Kimberly-Clark Far East Pte. Limited, Singapore (60%)
Kimberly-Clark Forest Products Inc., Terrace Bay, Ontario, Canada
Kimberly-Clark France S.A.R.L., Paris, France
Kimberly-Clark GmbH, Koblenz, Germany
Kimberly-Clark Inc., Mississauga, Ontario, Canada
Kimberly-Clark Industries S.A., Paris, France
Kimberly-Clark Integrated Services Corporation (Delaware) Roswell,
Georgia
Kimberly-Clark International, S.A., Panama City, Panama
Kimberly-Clark International Services Corporation (Delaware)
Neenah, Wisconsin
Kimberly-Clark Limited, Larkfield, Kent, England
Kimberly-Clark PHC International, Inc. (Delaware) Roswell, Georgia
Kimberly-Clark Philippines Inc., Makati, Philippines (87%)
Kimberly-Clark Puerto Rico, Inc. (Delaware) San Juan, Puerto Rico
Kimberly-Clark Sales Corporation (Virgin Islands) Veenendaal,
Netherlands
Kimberly-Clark Sopalin, St. Cloud, France
Kimberly-Clark Technical Products, Inc. (Delaware) Roswell,
Georgia
Kimberly-Clark Thailand Limited, Bangkok, Thailand
Kunming Comfort & Beauty Hygienic Products Co., Ltd., China (90%)
LTR Industries S.A., Paris, France (72%)
Midwest Express Airlines, Inc. (Delaware) Milwaukee, Wisconsin
Nanjing Comfort & Beauty Sanitary Products Co., Ltd., China (90%)
Papeteries de Malaucene S.A., Malaucene, France
Papeteries de Mauduit S.A., Quimperle, France
Ridgeway Insurance Company Limited, Hamilton, Bermuda
SYZYGY, Inc. (Delaware) Waco, Texas
Venekim, C.A., Caracas, Venezuela (60%)
YuHan-Kimberly, Limited, Seoul, Korea (60%)
EQUITY COMPANIES
Carlton Paper Corporation Limited, Johannesburg, South Africa
(38.7%)
Colombiana Kimberly S.A., Medellin, Colombia (50%)
Colombiana Universal de Papeles S.A., Pereira, Colombia (50%)
Kimberly-Clark Argentina S.A., Cordoba, Argentina (33.3%)
Kimberly-Clark Australia Pty. Limited, Milsons Point, New South
Wales, Australia (50%)
Kimberly-Clark Lever, Ltd., India (50%)
Kimberly-Clark Malaysia Sendirian Berhad, Petaling Jaya, Malaysia
(30.6%)
Kimberly-Clark de Mexico, S.A. de C.V., Mexico City, Mexico (43%)
Olayan Kimberly-Clark Arabia Company, Al-Khobar, Kingdom of Saudi
Arabia (49%)
Olayan Kimberly-Clark (Bahrain) WLL, Manama, Bahrain (49%)
P.T. Kimsari Paper Indonesia, Medan, Indonesia (50%)
Exhibit No. (23)
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Kimberly-Clark
Corporation's Registration Statements on Form S-8 (Nos.
2-71743, 33-5299, 33-30425, 33-49050 and 33-58402) and on Form
S-3 (Nos. 33-52343 and 33-54177) of our reports dated
January 27, 1995, which reports include an explanatory
paragraph concerning the Corporation's changes during 1992 in
its methods of accounting for income taxes and postretirement
benefits other than pensions to conform with Statements of
Financial Accounting Standards No. 109 and No. 106,
respectively; appearing in and incorporated by reference in
this Annual Report on Form 10-K for the year ended December 31,
1994. We also consent to the references to us under the
heading "Experts" in the Prospectuses, which are part of such
Registration Statements.
/s/ DELOITTE & TOUCHE LLP
-------------------------------
DELOITTE & TOUCHE LLP
Dallas, Texas
March 24, 1995
EXHIBIT 24
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
does hereby constitute and appoint John W. Donehower, Randy J.
Vest and O. George Everbach, and each of them, with full power
to act alone, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities, to
sign Kimberly-Clark Corporation's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 and to file
the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as
amended, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and
seal this 16th day of February, 1995.
/s/ John F. Bergstrom
----------------------------------
John F. Bergstrom
STATE OF TEXAS )
) ss
COUNTY OF DALLAS )
I, Clairene Jorella, a Notary Public in and for said
County, in the State aforesaid, DO HEREBY CERTIFY that John F.
Bergstrom is personally known to me to be the same person whose
name is subscribed to the foregoing instrument, appeared before
me this day in person, and acknowledged that he signed, sealed
and delivered the said instrument as his free and voluntary
act, for the uses and purposes therein set forth.
GIVEN under my hand and notarial seal this 16th day of
February, 1995.
/s/ Clairene Jorella
----------------------------------
Clairene Jorella
Notary Public
My commission expires: July 30, 1997
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
does hereby constitute and appoint John W. Donehower, Randy J.
Vest and O. George Everbach, and each of them, with full power
to act alone, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities, to
sign Kimberly-Clark Corporation's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 and to file
the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as
amended, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and
seal this 16th day of February, 1995.
/s/ Pastora San Juan Cafferty
----------------------------------
Pastora San Juan Cafferty
STATE OF TEXAS )
) ss
COUNTY OF DALLAS )
I, Clairene Jorella, a Notary Public in and for said
County, in the State aforesaid, DO HEREBY CERTIFY that Pastora
San Juan Cafferty is personally known to me to be the same
person whose name is subscribed to the foregoing instrument,
appeared before me this day in person, and acknowledged that
she signed, sealed and delivered the said instrument as her
free and voluntary act, for the uses and purposes therein set
forth.
GIVEN under my hand and notarial seal this 16th day of
February, 1995.
/s/ Clairene Jorella
----------------------------------
Clairene Jorella
Notary Public
My commission expires: July 30, 1997
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
does hereby constitute and appoint John W. Donehower, Randy J.
Vest and O. George Everbach, and each of them, with full power
to act alone, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities, to
sign Kimberly-Clark Corporation's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 and to file
the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as
amended, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and
seal this 16th day of February, 1995.
/s/ Paul J. Collins
----------------------------------
Paul J. Collins
STATE OF TEXAS )
) ss
COUNTY OF DALLAS )
I, Clairene Jorella, a Notary Public in and for said
County, in the State aforesaid, DO HEREBY CERTIFY that Paul J.
Collins is personally known to me to be the same person whose
name is subscribed to the foregoing instrument, appeared before
me this day in person, and acknowledged that he signed, sealed
and delivered the said instrument as his free and voluntary
act, for the uses and purposes therein set forth.
GIVEN under my hand and notarial seal this 16th day of
February, 1995.
/s/ Clairene Jorella
----------------------------------
Clairene Jorella
Notary Public
My commission expires: July 30, 1997
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
does hereby constitute and appoint John W. Donehower, Randy J.
Vest and O. George Everbach, and each of them, with full power
to act alone, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities, to
sign Kimberly-Clark Corporation's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 and to file
the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as
amended, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and
seal this 16th day of February, 1995.
/s/ Claudio X. Gonzalez
----------------------------------
Claudio X. Gonzalez
STATE OF TEXAS )
) ss
COUNTY OF DALLAS )
I, Clairene Jorella, a Notary Public in and for said
County, in the State aforesaid, DO HEREBY CERTIFY that Claudio
X. Gonzalez is personally known to me to be the same person
whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that he signed,
sealed and delivered the said instrument as his free and
voluntary act, for the uses and purposes therein set forth.
GIVEN under my hand and notarial seal this 16th day of
February, 1995.
/s/ Clairene Jorella
----------------------------------
Clairene Jorella
Notary Public
My commission expires: July 30, 1997
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
does hereby constitute and appoint John W. Donehower, Randy J.
Vest and O. George Everbach, and each of them, with full power
to act alone, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities, to
sign Kimberly-Clark Corporation's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 and to file
the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as
amended, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and
seal this 16th day of February, 1995.
/s/ James G. Grosklaus
----------------------------------
James G. Grosklaus
STATE OF TEXAS )
) ss
COUNTY OF DALLAS )
I, Clairene Jorella, a Notary Public in and for said
County, in the State aforesaid, DO HEREBY CERTIFY that James G.
Grosklaus is personally known to me to be the same person whose
name is subscribed to the foregoing instrument, appeared before
me this day in person, and acknowledged that he signed, sealed
and delivered the said instrument as his free and voluntary
act, for the uses and purposes therein set forth.
GIVEN under my hand and notarial seal this 16th day of
February, 1995.
/s/ Clairene Jorella
----------------------------------
Clairene Jorella
Notary Public
My commission expires: July 30, 1997
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
does hereby constitute and appoint John W. Donehower, Randy J.
Vest and O. George Everbach, and each of them, with full power
to act alone, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities, to
sign Kimberly-Clark Corporation's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 and to file
the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as
amended, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and
seal this 16th day of February, 1995.
/s/ Louis E. Levy
----------------------------------
Louis E. Levy
STATE OF TEXAS )
) ss
COUNTY OF DALLAS )
I, Clairene Jorella, a Notary Public in and for said
County, in the State aforesaid, DO HEREBY CERTIFY that Louis E.
Levy is personally known to me to be the same person whose name
is subscribed to the foregoing instrument, appeared before me
this day in person, and acknowledged that she signed, sealed
and delivered the said instrument as her free and voluntary
act, for the uses and purposes therein set forth.
GIVEN under my hand and notarial seal this 16th day of
February, 1995.
/s/ Clairene Jorella
----------------------------------
Clairene Jorella
Notary Public
My commission expires: July 30, 1997
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
does hereby constitute and appoint John W. Donehower, Randy J.
Vest and O. George Everbach, and each of them, with full power
to act alone, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities, to
sign Kimberly-Clark Corporation's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 and to file
the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as
amended, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and
seal this 16th day of February, 1995.
/s/ Frank A. McPherson
----------------------------------
Frank A. McPherson
STATE OF TEXAS )
) ss
COUNTY OF DALLAS )
I, Clairene Jorella, a Notary Public in and for said
County, in the State aforesaid, DO HEREBY CERTIFY that Frank A.
McPherson is personally known to me to be the same person whose
name is subscribed to the foregoing instrument, appeared before
me this day in person, and acknowledged that she signed, sealed
and delivered the said instrument as her free and voluntary
act, for the uses and purposes therein set forth.
GIVEN under my hand and notarial seal this 16th day of
February, 1995.
/s/ Clairene Jorella
----------------------------------
Clairene Jorella
Notary Public
My commission expires: July 30, 1997
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
does hereby constitute and appoint John W. Donehower, Randy J.
Vest and O. George Everbach, and each of them, with full power
to act alone, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities, to
sign Kimberly-Clark Corporation's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 and to file
the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as
amended, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and
seal this 16th day of February, 1995.
/s/ Wayne R. Sanders
----------------------------------
Wayne R. Sanders
STATE OF TEXAS )
) ss
COUNTY OF DALLAS )
I, Clairene Jorella, a Notary Public in and for said
County, in the State aforesaid, DO HEREBY CERTIFY that Wayne R.
Sanders is personally known to me to be the same person whose
name is subscribed to the foregoing instrument, appeared before
me this day in person, and acknowledged that she signed, sealed
and delivered the said instrument as her free and voluntary
act, for the uses and purposes therein set forth.
GIVEN under my hand and notarial seal this 16th day of
February, 1995.
/s/ Clairene Jorella
----------------------------------
Clairene Jorella
Notary Public
My commission expires: July 30, 1997
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
does hereby constitute and appoint John W. Donehower, Randy J.
Vest and O. George Everbach, and each of them, with full power
to act alone, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities, to
sign Kimberly-Clark Corporation's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 and to file
the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as
amended, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and
seal this 16th day of February, 1995.
/s/ Wolfgang R. Schmitt
----------------------------------
Wolfgang R. Schmitt
STATE OF TEXAS )
) ss
COUNTY OF DALLAS )
I, Clairene Jorella, a Notary Public in and for said
County, in the State aforesaid, DO HEREBY CERTIFY that Wolfgang
R. Schmitt is personally known to me to be the same person
whose name is subscribed to the foregoing instrument, appeared
before me this day in person, and acknowledged that she signed,
sealed and delivered the said instrument as her free and
voluntary act, for the uses and purposes therein set forth.
GIVEN under my hand and notarial seal this 16th day of
February, 1995.
/s/ Clairene Jorella
----------------------------------
Clairene Jorella
Notary Public
My commission expires: July 30, 1997
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
does hereby constitute and appoint John W. Donehower, Randy J.
Vest and O. George Everbach, and each of them, with full power
to act alone, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities, to
sign Kimberly-Clark Corporation's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 and to file
the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as
amended, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and
seal this 16th day of February, 1995.
/s/ Randall L. Tobias
----------------------------------
Randall L. Tobias
STATE OF TEXAS )
) ss
COUNTY OF DALLAS )
I, Clairene Jorella, a Notary Public in and for said
County, in the State aforesaid, DO HEREBY CERTIFY that Randall
L. Tobias is personally known to me to be the same person whose
name is subscribed to the foregoing instrument, appeared before
me this day in person, and acknowledged that she signed, sealed
and delivered the said instrument as her free and voluntary
act, for the uses and purposes therein set forth.
GIVEN under my hand and notarial seal this 16th day of
February, 1995.
/s/ Clairene Jorella
----------------------------------
Clairene Jorella
Notary Public
My commission expires: July 30, 1997
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned
does hereby constitute and appoint John W. Donehower, Randy J.
Vest and O. George Everbach, and each of them, with full power
to act alone, his true and lawful attorney-in-fact and agent,
with full power of substitution and resubstitution, for him and
in his name, place and stead, in any and all capacities, to
sign Kimberly-Clark Corporation's Annual Report on Form
10-K for the fiscal year ended December 31, 1994 and to file
the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange
Commission pursuant to the Securities Exchange Act of 1934, as
amended, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each
and every act and thing requisite and necessary to be done, as
fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be
done by virtue hereof.
IN WITNESS WHEREOF, I have hereunto set my hand and
seal this 16th day of February, 1995.
/s/ H. Blair White
----------------------------------
H. Blair White
STATE OF TEXAS )
) ss
COUNTY OF DALLAS )
I, Clairene Jorella, a Notary Public in and for said
County, in the State aforesaid, DO HEREBY CERTIFY that H. Blair
White is personally known to me to be the same person whose
name is subscribed to the foregoing instrument, appeared before
me this day in person, and acknowledged that she signed, sealed
and delivered the said instrument as her free and voluntary
act, for the uses and purposes therein set forth.
GIVEN under my hand and notarial seal this 16th day of
February, 1995.
/s/ Clairene Jorella
----------------------------------
Clairene Jorella
Notary Public
My commission expires: July 30, 1997
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<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
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