<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement / / Confidential, for Use of the
Commission Only (as permitted by
Rule 14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
KIMBERLY-CLARK CORPORATION
- --------------------------------------------------------------------------------
(Name of Registrant as Specified in its Charter)
N/A
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(i)(2)
or Item 22(a)(2) of Schedule 14A.
/ / $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
(1) Title of each class of securities to which transaction applies:
N/A
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(2) Aggregate number of securities to which transaction applies:
N/A
- --------------------------------------------------------------------------------
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the filing fee
is calculated and state how it was determined):
N/A
- --------------------------------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
N/A
- --------------------------------------------------------------------------------
(5) Total fee paid:
N/A
- --------------------------------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number, or
the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
N/A
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(2) Form, Schedule or Registration Statement No.:
N/A
- --------------------------------------------------------------------------------
(3) Filing Party:
N/A
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(4) Date Filed:
N/A
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<PAGE> 2
March 6, 1996
[KIMBERLY-CLARK CORPORATION LOGO]
WAYNE R. SANDERS
Chairman of the Board and
Chief Executive Officer
TO OUR STOCKHOLDERS:
On behalf of the Board of Directors and management of Kimberly-Clark
Corporation, I cordially invite you to the Annual Meeting of Stockholders to be
held on Thursday, April 18, 1996, at 11:00 a.m. at the Corporation's Roswell
Operations Headquarters, 1400 Holcomb Bridge Road, Roswell, Georgia.
At the Annual Meeting, stockholders will be asked to elect four directors
for a three-year term, approve the selection of the Corporation's independent
auditor and approve an Outside Directors' Stock Compensation Plan. All these
matters are fully described in the accompanying Notice of Annual Meeting and
Proxy Statement.
It is important that your stock be represented at the meeting regardless of
the number of shares you hold. You are encouraged to specify your voting
preferences by so marking and dating the enclosed proxy card. However, if you
wish to vote in accordance with the directors' recommendations, all you need do
is sign and date the card.
Please complete and return the proxy card in the enclosed envelope whether
or not you plan to attend the meeting. If you do attend and wish to vote in
person, you may revoke your proxy at that time.
If you plan to attend the meeting, please check the card in the space
provided. This will assist us with meeting preparations, and will enable us to
expedite your admittance. If your shares are not registered in your own name and
you would like to attend the meeting, please ask the broker, trust, bank or
other nominee which holds the shares to provide you with evidence of your share
ownership, which will enable you to gain admission to the meeting.
Sincerely,
/s/ WAYNE R. SANDERS
Wayne R. Sanders
<PAGE> 3
KIMBERLY-CLARK CORPORATION
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
APRIL 18, 1996
The Annual Meeting of Stockholders of KIMBERLY-CLARK CORPORATION will be
held at the Corporation's Roswell Operations Headquarters, 1400 Holcomb Bridge
Road, Roswell, Georgia, on Thursday, April 18, 1996, at 11:00 a.m. for the
following purposes:
1. To elect four directors for a three-year term to expire at the 1999
Annual Meeting of Stockholders;
2. To approve the selection of Deloitte & Touche LLP as independent
auditor;
3. To approve an Outside Directors' Stock Compensation Plan; and
4. To take action upon any other business which properly may come before
the meeting or any adjournment thereof.
Stockholders of record at the close of business on February 19, 1996 are
entitled to notice of and to vote at the meeting and any adjournment thereof.
It is important that your shares be represented at the meeting. I urge you
to sign, date and promptly return the enclosed proxy card in the enclosed
business reply envelope. No postage is required if mailed in the United States.
The accompanying Proxy Statement also is used to solicit voting
instructions for the shares of the Corporation's common stock which are held by
the trustees of the Corporation's Salaried and Hourly Employees Incentive
Investment Plans and the Kimberly-Clark Tissue Company Investment Plans for
Salaried and Hourly Employees for the benefit of the participants in the plans.
It is important that each participant in any such plan sign, date and return the
voting instruction card which is enclosed with the Proxy Statement in the
business reply envelope provided. No postage is necessary if mailed in the
United States.
By order of the Board of Directors.
/s/ DONALD M. CROOK
Donald M. Crook
Vice President and Secretary
P. O. Box 619100
Dallas, Texas 75261-9100
March 6, 1996
<PAGE> 4
PROXY STATEMENT
KIMBERLY-CLARK CORPORATION
P. O. Box 619100
Dallas, Texas 75261-9100
March 6, 1996
INTRODUCTION
The accompanying proxy is solicited on behalf of the Board of Directors of
Kimberly-Clark Corporation, a Delaware corporation (the "Corporation"), for use
at the Annual Meeting of Stockholders to be held on April 18, 1996 and at any
adjournment thereof. Proxies in the accompanying form, properly signed and
received in time for the meeting, will be voted as instructed. If no
instructions are given, proxies will be voted for the election of directors, the
approval of the selection of the Corporation's independent auditor and the
approval of the Outside Directors' Stock Compensation Plan. Any proxy may be
revoked by the stockholder granting it at any time before it is voted by
delivering to the Secretary of the Corporation another signed proxy card, or a
signed document revoking the earlier proxy.
Each stockholder of record at the close of business on February 19, 1996
will be entitled to one vote for each share registered in such stockholder's
name. As of that date, there were outstanding 282,665,756 shares of common stock
of the Corporation.
The entire cost of the proxy solicitation, including the reasonable
expenses of brokers, fiduciaries and other nominees in forwarding proxy material
to beneficial owners, will be borne by the Corporation. In addition to the use
of the mail, solicitation may be made by telephone or otherwise by regular
employees of the Corporation. If undertaken, the expense of such solicitation
would be nominal. The Corporation has retained W.F. Doring & Co., Inc. to aid in
the solicitation of proxies from its stockholders. The fees of such firm are
estimated to be $10,000, plus reimbursement of out-of-pocket expenses.
Stockholders' proxies are received by the Corporation's independent proxy
processing agent, and the vote is certified by independent inspectors of
election. Proxies and ballots that identify the vote of stockholders will be
kept confidential, except as necessary to meet legal requirements, in cases
where stockholders request disclosure or write comments on their proxy cards, or
in a contested matter involving an opposing proxy solicitation. During the proxy
solicitation period, the Corporation will receive vote tallies from time to time
from the independent proxy processing agent, but such tallies will provide
aggregate data rather than names of stockholders. The agent will notify the
Corporation if a stockholder has failed to vote so that he or she may be
reminded and requested to do so.
The Corporation intends to mail this Proxy Statement and proxy card,
together with the 1995 Annual Report to Stockholders, to the stockholders on
March 6, 1996. If a stockholder is a participant in the Corporation's Automatic
Dividend Reinvestment and Stock Purchase Plan, the proxy card represents the
number of full shares in the stockholder's account in such plan, as well as
shares registered in the stockholder's name.
The Corporation also intends to mail this Proxy Statement, the 1995 Annual
Report to Stockholders and a voting instruction card, which is solicited on
behalf of the Board of Directors of the Corporation, on March 6, 1996 to each
participant in the Corporation's Salaried and Hourly Employees Incentive
Investment Plans and the Investment Plans for Salaried and Hourly Employees of
Kimberly-Clark Tissue Company, a wholly owned subsidiary of the Corporation
("K-C Tissue"). Both the trustee of the Corporation's plans, Harris Trust and
Savings Bank, and the trustee of K-C Tissue's plans, Bank of New York, as the
stockholders of record of shares of the common stock of the Corporation held in
the plans, will vote whole shares of stock attributable to each participant's
<PAGE> 5
interest in the plans in accordance with the directions such participant gives
on such voting instruction card.
PROPOSAL 1. ELECTION OF DIRECTORS
The Restated Certificate of Incorporation of the Corporation provides that
the Board of Directors shall consist of not less than 11 nor more than 25
members, as determined from time to time by the affirmative vote of a majority
of the entire Board of Directors, and that the Board shall be divided into three
classes. Directors of one class are elected each year for a term of three years.
As of the date of this Proxy Statement, the Board of Directors consists of 16
members, six of whom have terms which expire at this year's Annual Meeting
(Class of 1996), five of whom have terms which expire at the 1997 Annual Meeting
(Class of 1997), and five of whom have terms which expire at the 1998 Annual
Meeting (Class of 1998). James G. Grosklaus, who is currently a director of the
Class of 1996, is retiring from the Board of Directors and will not stand for
re-election at this year's Annual Meeting. In addition, three former directors
of Scott Paper Company, John F. Fort, III, Peter Harf and Gary L. Roubos, who
are currently directors of the Class of 1996 and who were elected to the Board
effective December 12, 1995 upon the closing of the merger with Scott Paper
Company pursuant to the terms of the merger agreement governing the transaction,
will not stand for re-election at this year's Annual Meeting. Therefore, in
order to align the Classes for a reduced Board size as of the date of this
year's Annual Meeting, the Board of Directors has resolved that, effective as of
the Annual Meeting, the Board shall consist of 12 members, with four members in
each Class.
The four nominees for director set forth on the following pages are
proposed to be elected at the Annual Meeting to serve for a term to expire at
the 1999 Annual Meeting of Stockholders (Class of 1999) and until their
successors are elected and have qualified. Should any such nominee become unable
to serve, proxies may be voted for another person designated by management. All
nominees have advised the Corporation that they will serve if elected. The
remaining eight directors will continue to serve as directors for the terms set
forth on the following pages.
Under Section 216 of the Delaware General Corporation Law and the
Corporation's By-laws, a majority of the shares of the Corporation's common
stock, present in person or represented by proxy, shall constitute a quorum for
purposes of the Annual Meeting. In all matters other than the election of
directors, the affirmative vote of a majority of shares present in person or
represented by proxy at the Annual Meeting and entitled to vote on the subject
matter shall be the act of the stockholders. Abstentions are treated as votes
against a proposal and broker non-votes have no effect on the vote. Directors
shall be elected by a plurality of the votes present in person or represented by
proxy at the Annual Meeting and entitled to vote on the election of directors.
CERTAIN INFORMATION REGARDING DIRECTORS AND NOMINEES
The names of the directors continuing in office and nominees, their ages as
of the date of the Annual Meeting, the year each first became a director, their
principal occupations during at least the past five years, other directorships
held by each as of the date hereof and certain other biographical information
are as set forth on the following pages by Class, in the order of the next Class
to stand for election.
2
<PAGE> 6
NOMINEES FOR ELECTION TO THE BOARD OF DIRECTORS
FOR A THREE-YEAR TERM EXPIRING AT THE
1999 ANNUAL MEETING OF STOCKHOLDERS
(CLASS OF 1999)
<TABLE>
<S> <C>
JOHN F. BERGSTROM President and
Chief Executive Officer
Bergstrom Corporation
Mr. Bergstrom, age 49, has served as President and Chief Executive Officer of
- -------------------- Bergstrom Corporation, Neenah, Wisconsin, for more than the past five years.
Bergstrom Corporation owns and operates hotels, and automobile sales and
[PHOTO] leasing businesses, in Wisconsin. Mr. Bergstrom is a director of the Wisconsin
- -------------------- Energy Corporation, Universal Foods Corporation, The First National Bank-Fox
Valley, Midwest Express Holdings, Inc., an equity company of the Corporation,
and the Green Bay Packers. He also is a member of the Board of Trustees of
Marquette University, the Medical College of Wisconsin and the General Motors
Dealer Marketing Council. He has been a director of the Corporation since
1987.
- --------------------------------------------------------------------------------------------------------
PAUL J. COLLINS Vice Chairman
Citicorp and Citibank, N.A.
- -------------------- Mr. Collins, age 59, has served as Vice Chairman of Citicorp and its principal
subsidiary, Citibank, N.A., New York, New York, since 1988. He previously was
[PHOTO] elected Senior Corporate Officer and Chief Planning Officer of those companies
- -------------------- in 1985, and Group Executive of those companies in 1984. He joined Citicorp in
1961 and served as Executive Vice President prior to becoming Group Executive.
Mr. Collins also is a director of Citicorp and Citibank, N.A., and a trustee
of Carnegie Hall Corporation and the Central Park Conservancy. He has been a
director of the Corporation since 1983.
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ROBERT W. DECHERD Chairman of the Board, President
and Chief Executive Officer
A.H. Belo Corporation
- -------------------- Mr. Decherd, age 45, has served as Chairman of the Board and Chief Executive
Officer of A.H. Belo Corporation, a broadcasting and publishing company, since
[PHOTO] January 1987. Mr. Decherd became President of that company in January 1994,
- -------------------- and previously served as President from January 1985 through December 1986.
From January 1984 through December 1986, he served as Chief Operating Officer.
He has been a director of that company since 1976. Mr. Decherd is a director
of CCBG Corporation and is a member of the executive committee of the
Newspaper Association of America and the Tomas Rivera Center for Policy
Studies. He has been a director of the Corporation since February 1996.
- --------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE> 7
<TABLE>
<S> <C>
FRANK A. MCPHERSON Chairman of the Board and
Chief Executive Officer
Kerr-McGee Corporation
- -------------------- Mr. McPherson, age 62, has served as Chairman of the Board and Chief Executive
[PHOTO] Officer of Kerr-McGee Corporation, a natural resources company, since 1983.
Previously, he served as President of that company from 1980 to 1983, and Vice
- -------------------- Chairman from 1978 to 1980. He joined Kerr-McGee Corporation in 1957 and held
various assignments in oil, natural gas and coal operations and chemical
manufacturing. Mr. McPherson is a director of Kerr-McGee Corporation,
Tri-Continental Corporation, Seligman Quality Fund, Inc., Seligman Select
Municipal Fund, Inc., Seligman Group of Mutual Funds, and Bank of Oklahoma
Financial Corporation. He has been a director of the Corporation since 1990.
</TABLE>
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MEMBERS OF THE BOARD OF DIRECTORS CONTINUING IN OFFICE
TERM EXPIRING AT THE
1997 ANNUAL MEETING OF STOCKHOLDERS
(CLASS OF 1997)
<TABLE>
<S> <C>
WILLIAM O. FIFIELD Partner
Sidley & Austin
- -------------------- Mr. Fifield, age 49, has served as a partner in the law firm of Sidley &
[PHOTO] Austin, Chicago, Illinois, since 1977. He is the head of the firm's patent and
antitrust litigation group, a co-chair of the firm's committee on computers
- -------------------- and legal technology and a member of the firm's accounting and finance
committee. He has been a director of the Corporation since August 1995.
- --------------------------------------------------------------------------------------------------------
WAYNE R. SANDERS Chairman of the Board and
Chief Executive Officer
Mr. Sanders, age 48, has served as Chief Executive Officer of the Corporation
since December 1991 and Chairman of the Board of the Corporation since March
1992. He previously had been elected President and Chief Operating Officer in
- -------------------- 1990. Employed by the Corporation in 1975, Mr. Sanders was appointed Vice
[PHOTO] 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. He also is a member of the Marquette University
Board of Trustees and is a national trustee of the Boys and Girls Clubs of
America. He has been a director of the Corporation since 1989.
- --------------------------------------------------------------------------------------------------------
</TABLE>
4
<PAGE> 8
<TABLE>
<S> <C>
WOLFGANG R. SCHMITT Chairman of the Board
and Chief Executive Officer
Rubbermaid Incorporated
- -------------------- Mr. Schmitt, age 52, has served as Chairman of the Board of Rubbermaid
Incorporated since 1993, and as Chief Executive Officer since 1992. He
[PHOTO] previously was elected Co-chair of that company in 1992, President and Chief
- -------------------- Operating Officer in 1991, Executive Vice President in 1987 and President of
the Home Products Division in 1984. He joined Rubbermaid Incorporated in 1966
and has been employed in various marketing and research and development
assignments. Mr. Schmitt is a director of Rubbermaid Incorporated and
Parker-Hannifin Corporation and serves as a trustee of Otterbein College. He
has been a director of the Corporation since 1994.
- --------------------------------------------------------------------------------------------------------
RANDALL L. TOBIAS Chairman of the Board and
Chief Executive Officer
Eli Lilly and Company
Mr. Tobias, age 54, has served as Chairman of the Board and Chief Executive
Officer of Eli Lilly and Company since 1993. Prior to joining Eli Lilly and
- -------------------- Company in 1993, he served as Vice Chairman of the Board of American Telephone
and Telegraph Company ("AT&T") from 1986 and as Chairman and Chief Executive
[PHOTO] Officer of AT&T International (an AT&T subsidiary) from 1991. He previously
- -------------------- served as Chairman and Chief Executive Officer of AT&T Communications and of
AT&T Information Systems, Inc., subsidiaries of AT&T. He joined AT&T in 1964.
Mr. Tobias is a director of Eli Lilly and Company, Phillips Petroleum Company
and Knight-Ridder, Inc. He is a trustee of Duke University, the Colonial
Williamsburg Foundation and the Indiana University Foundation. He has been a
director of the Corporation since 1994.
- --------------------------------------------------------------------------------------------------------
</TABLE>
TERM EXPIRING AT THE
1998 ANNUAL MEETING OF STOCKHOLDERS
(CLASS OF 1998)
<TABLE>
<S> <C>
PASTORA SAN JUAN CAFFERTY Professor
University of Chicago
- -------------------- Mrs. Cafferty, age 55, has served as a Professor since 1985 at the University
of Chicago's School of Social Service Administration where she has been a
[PHOTO] member of the faculty since 1971. Mrs. Cafferty is a director of the People's
- -------------------- Energy Corporation, WMX Technologies, Inc., The Lyric Opera, and
Rush-Presbyterian-St. Luke's Medical Center in Chicago. She has been a
director of the Corporation since 1976.
- --------------------------------------------------------------------------------------------------------
</TABLE>
5
<PAGE> 9
<TABLE>
<S> <C>
CLAUDIO X. GONZALEZ Chairman of the Board
and Managing Director
Kimberly-Clark
de Mexico, S.A. de C.V.
Mr. Gonzalez, age 61, has served as Chairman of the Board and Managing
Director of Kimberly-Clark de Mexico, S.A. de C.V., an equity company of the
- -------------------- Corporation and a producer of disposable consumer products, pulp, and writing
and other papers, since 1973. He was employed by the Corporation in 1956 and
[PHOTO] by Kimberly-Clark de Mexico, S.A., the predecessor of Kimberly-Clark de
- -------------------- Mexico, S.A. de C.V., in 1957. Mr. Gonzalez was elected Vice President of
Operations of Kimberly-Clark de Mexico, S.A. in 1962 and Executive Vice
President and Managing Director in 1966. He is a director of Kellogg Company,
General Electric Company, The Mexico Fund, Banco Nacional de Mexico, Grupo
Industrial ALFA, Grupo Industrial Saltillo, Grupo Carso and Telefonos de
Mexico, and is a member of the Advisory Council of the Stanford University
Graduate School of Business. He has been a director of the Corporation since
1976.
- --------------------------------------------------------------------------------------------------------
LOUIS E. LEVY Retired Partner and Vice Chairman
KPMG Peat Marwick
Mr. Levy, age 63, served as a partner of KPMG Peat Marwick or its predecessor
- -------------------- firms from 1968 until his retirement from that firm in 1990. He had been a
member of the board of directors of KPMG Peat Marwick or its predecessor firms
[PHOTO] from 1978 until his retirement. In addition, he was Vice Chairman of KPMG Peat
- -------------------- Marwick, responsible for Professional Standards and Quality Assurance. Mr.
Levy is a member of the boards of directors of Household International, Inc.
and the Alex, Brown/Flag Investors Group of Mutual Funds. He is Chairman
Emeritus of the National Multiple Sclerosis Society. He has been a director of
the Corporation since 1991.
- --------------------------------------------------------------------------------------------------------
LINDA JOHNSON RICE President and Chief
Operating Officer
Johnson Publishing Company, Inc.
- -------------------- Mrs. Johnson Rice, age 38, has served as President and Chief Operating Officer
[PHOTO] of Johnson Publishing Company, Inc., a multi-media company, since 1987. She
- -------------------- joined that company in 1980 and became Vice President in 1985. Mrs. Johnson
Rice is a director of Bausch & Lomb Incorporated, Bank of America Illinois and
The Dial Corporation. She has been a director of the Corporation since April
1995.
</TABLE>
- --------------------------------------------------------------------------------
6
<PAGE> 10
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth information as of December 31, 1995
regarding the number of shares of the common stock of the Corporation
beneficially owned by all directors and nominees, by each of the executive
officers named in "Executive Compensation" below, and by all directors, nominees
and executive officers as a group.
<TABLE>
<CAPTION>
NAME OF INDIVIDUAL OR AMOUNT AND NATURE OF
IDENTITY OF GROUP BENEFICIAL OWNERSHIP(1)(2)
- --------------------------------------------------------------- --------------------------
<S> <C>
John F. Bergstrom.............................................. 4,000
Pastora San Juan Cafferty...................................... 1,535(3)
Paul J. Collins................................................ 4,000(3)
Robert W. Decherd.............................................. 2,000
O. George Everbach............................................. 73,137(4)
Thomas J. Falk................................................. 64,043(4)
William O. Fifield............................................. 1,000(3)
John F. Fort, III.............................................. 19,902(4)
Claudio X. Gonzalez............................................ 52,000
James G. Grosklaus............................................. 194,379(4)(5)
Peter Harf..................................................... 12,318(3)(4)
Louis E. Levy.................................................. 1,700(3)
James T. McCauley.............................................. 136,348(4)
Frank A. McPherson............................................. 2,600(6)
Linda Johnson Rice............................................. 1,000
Gary L. Roubos................................................. 11,844(4)
Wayne R. Sanders............................................... 360,171(4)(7)
Wolfgang R. Schmitt............................................ 500(3)
Randall L. Tobias.............................................. 1,000(3)
All directors, nominees and executive officers as a group...... 1,120,548(4)(8)
</TABLE>
- ---------------
(1) Except as otherwise noted, the directors, nominees and named executive
officers, and the directors, nominees and executive officers as a group,
have sole voting and investment power with respect to the shares listed.
(2) Each director, nominee and named executive officer, and all directors,
nominees and executive officers as a group, own less than one percent of the
outstanding shares of the Corporation's common stock.
(3) In addition to the shares listed in the table which are beneficially owned,
the following directors have stock credits allocated to their deferred
compensation accounts as of December 31, 1995 under the Corporation's
deferred compensation plan for directors: Mrs. Cafferty, 10,094 credits; Mr.
Collins, 19,548 credits; Mr. Fifield, 448 credits; Mr. Harf, 117 credits;
Mr. Levy, 2,302 credits; Mr. Schmitt, 1,128 credits; and Mr. Tobias, 1,765
credits. The accounts reflect the election of the directors to defer into
stock credits compensation previously earned by them as directors of the
Corporation. Although such directors are fully at risk as to the price of
the Corporation's common stock represented by stock credits, such stock
credits are not shares of stock and the directors do not have any rights as
holders of common stock with respect to such stock credits. See "Executive
Compensation-Compensation of Directors" for additional information
concerning such deferred stock accounts.
(4) Includes the following shares which could be acquired within 60 days of
December 31, 1995 by: Mr. Everbach, 51,700 shares; Mr. Falk, 58,938 shares;
Mr. Fort, 2,340 shares; Mr. Grosklaus, 101,331 shares; Mr. Harf, 5,460
shares; Mr. McCauley, 64,108 shares; Mr. Roubos, 8,580 shares; Mr. Sanders,
317,438 shares; and all directors, nominees and executive officers as a
group, 735,422 shares. Also, shares of common stock held by the trustee of
the Corporation's Salaried Employees Incentive Investment Plan for the
benefit of, and which are attributable to the accounts in the plan of, the
respective directors, nominees and executive officers above are included in
this table.
(5) Includes 15,133 shares held by Mr. Grosklaus' spouse.
(6) Mr. McPherson shares voting and investment power with respect to all such
shares.
(7) Mr. Sanders shares voting and investment power with respect to 17,500
shares. In addition, the above total amount excludes 10,880 shares held in
trust for the benefit of Mr. Sanders' children with respect to which Mr.
Sanders disclaims beneficial ownership.
(8) Voting and investment power with respect to 20,100 of such shares is shared.
7
<PAGE> 11
CERTAIN TRANSACTIONS AND BUSINESS RELATIONSHIPS
In 1995, the Corporation and certain of its subsidiaries retained the legal
services of Sidley & Austin, Chicago, Illinois. Total fees paid in 1995 to
Sidley & Austin for services rendered to the Corporation and such subsidiaries
were $3,240,468. William O. Fifield, a director of the Corporation, is a partner
in that firm. In addition, H. Blair White, who served as a director of the
Corporation until August 1995, serves of counsel to that firm. Management
believes that the cost of services so rendered by Sidley & Austin during 1995
was reasonable compared with the cost of obtaining similar services from an
unaffiliated third party. The Corporation and certain of its subsidiaries expect
to retain Sidley & Austin in 1996.
The Corporation paid $980,000 to Bergstrom Corporation in 1995 for hotel,
lodging, and automobile rental and purchasing costs. John F. Bergstrom and
Richard A. Bergstrom, his brother, own 75 percent and 25 percent, respectively,
of Bergstrom Corporation. In addition, the Corporation leases office space in
Neenah and Menasha, Wisconsin from Neenah Downtown Redevelopment Associates
Limited Partnership and Downtown Menasha Associates Limited Partnership,
respectively, two partnerships engaged in the redevelopment of downtown real
estate in such cities. John F. Bergstrom owns a 15 percent limited partner
interest in each such partnership. During 1995, rental payments made by the
Corporation to such partnerships totaled $630,000 and $130,000, respectively.
During 1995, K-C Aviation Inc., a wholly owned subsidiary of the
Corporation, serviced and managed a corporate aircraft owned by Bergstrom
Pioneer Auto and Truck Leasing ("Bergstrom Leasing"), which is a wholly owned
subsidiary of Bergstrom Corporation. In addition, during 1995, the Corporation
provided certain pilot services to Bergstrom Corporation with respect to such
aircraft. The total fees paid in 1995 to K-C Aviation Inc. and the Corporation
by Bergstrom Leasing and Bergstrom Corporation for such services rendered were
$577,000.
Management believes that the amounts charged and paid in connection with
the foregoing arrangements were reasonable compared with the amounts which would
be charged and paid for similar services or products from an unaffiliated third
party. The Corporation and K-C Aviation Inc. expect to engage in similar
transactions with Bergstrom Corporation, Bergstrom Leasing and the two
partnerships in 1996.
BOARD OF DIRECTORS AND COMMITTEES
The Board of Directors met nine times in 1995. All of the incumbent
Directors attended at least 75% of the total number of meetings of the Board and
committees on which they served, and the average attendance for each such
Director at such meetings was 97%.
The standing committees of the Board include, among others, the Audit
Committee, the Compensation Committee and the Nominating Committee.
The Audit Committee, currently composed of Mr. Collins, Chairman, Mr.
Bergstrom, Mrs. Johnson Rice and Mr. Schmitt, met three times during 1995. The
Committee selects, subject to stockholder approval, and engages independent
auditors to audit the books, records and accounts of the Corporation, determines
the scope of such audits, and establishes policy in connection with internal
audit programs of the Corporation.
The Compensation Committee, currently composed of Mrs. Cafferty,
Chairperson, Mr. Levy and Mr. Tobias, met three times during 1995. The nature
and scope of the Committee's responsibilities are set forth below under
"Executive Compensation - Board Compensation Committee Report on Executive
Compensation."
The Nominating Committee, currently composed of Mr. McPherson, Chairman,
Mr. Gonzalez and Mr. Fifield, met twice during 1995. The Committee proposes and
considers suggestions for candidates for membership on the Board, and recommends
candidates to the Board to fill Board vacancies. It also proposes to the Board a
slate of directors for submission to the stockholders at the Annual Meeting.
8
<PAGE> 12
STOCKHOLDER NOMINATIONS FOR DIRECTORS
The Nominating Committee of the Board of Directors considers nominees
recommended by stockholders as candidates for election to the Board of Directors
at the Annual Meeting of Stockholders. A stockholder wishing to nominate a
candidate for election to the Board at the Annual Meeting is required to give
written notice to the Secretary of the Corporation of his or her intention to
make such a nomination. The notice of nomination must be received by the
Corporation not less than 50 days nor more than 75 days prior to the
stockholders' meeting, or if the Corporation gives less than 60 days' notice of
the meeting date, the notice of nomination must be received within 10 days after
the meeting date is announced. The notice of nomination is required to contain
certain information about both the nominee and the stockholder making the
nomination. The Corporation may require that the proposed nominee furnish other
information to determine that person's eligibility to serve as a director. A
nomination which does not comply with the above procedure will be disregarded.
EXECUTIVE COMPENSATION
The table which follows sets forth information concerning compensation for
each of 1993, 1994 and 1995 awarded to, earned by, or paid to the chief
executive officer and the four most highly compensated executive officers of the
Corporation other than the chief executive officer whose total annual salary and
bonus exceeded $100,000:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM COMPENSATION
----------------------
ANNUAL COMPENSATION AWARDS
--------------------------------------- ---------- PAYOUTS
OTHER SECURITIES -------
ANNUAL UNDERLYING LTIP ALL OTHER
COMPENSATION OPTIONS PAYOUTS COMPENSATION
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) ($)(2) (#)(3) ($) ($)(4)
- ----------------------------- ---- --------- -------- ------------ ---------- ------- ------------
<S> <C> <C> <C> <C> <C> <C> <C>
Wayne R. Sanders 1995 800,000 844,800 (1) 4,160 248,159 0 4,500
Chairman of the Board 1994 750,000 384,384 (1) 8,824 0 476,437 4,500
and Chief Executive Officer 1993 677,500 380,160 0 82,720 0 7,075
O. George Everbach 1995 340,000 243,200 0 20,679 0 4,500
Senior Vice President - Law 1994 330,000 121,722 0 0 21,990 4,500
and Government Affairs 1993 310,000 120,384 0 20,680 0 7,075
Thomas J. Falk 1995 300,000 296,667 912 62,039 0 4,500
Group President - 1994 266,667 210,210 2,284 0 0 4,500
North American Tissue, 1993 226,667 144,587 0 25,850 0 6,800
Pulp and Paper
James G. Grosklaus 1995 400,000 368,000 4,593 31,019 0 4,500
Executive Vice President 1994 375,000 167,400 0 0 439,788 4,500
1993 350,000 165,600 0 25,850 0 7,075
James T. McCauley 1995 350,000 320,000 1,534 31,019 0 4,500
Executive Vice President 1994 330,000 145,600 0 0 179,580 4,500
1993 311,667 144,000 0 25,850 0 7,075
</TABLE>
- ---------------
(1) Includes amounts voluntarily deferred by Mr. Sanders for 1995 and 1994 under
the Corporation's Deferred Compensation Plan. The Deferred Compensation Plan
allows executive officers to defer portions of current base salary and bonus
compensation otherwise payable during the year. See "Tax Deduction for
Executive Compensation" below for a more complete description of the plan.
(2) Amounts shown consist entirely of amounts reimbursed for federal and state
income taxes on certain personal travel and spousal travel required for
company purposes. The value of such travel did not, for any of the executive
officers named above, exceed, in the aggregate, $50,000 in 1993, 1994 or
1995.
(3) The number of options granted reflect adjustments made by the Compensation
Committee in December 1995 to preserve the benefit to participants in
connection with, and give effect to, the spin-off by the Corporation on
November 30, 1995 of the stock of Schweitzer - Mauduit International, Inc.
(4) Amounts shown consist solely of the Corporation's matching contributions
under the Salaried Employees Incentive Investment Plan.
9
<PAGE> 13
The policies and practices of the Corporation pursuant to which the
compensation set forth in the Summary Compensation Table was paid or awarded is
described under "Board Compensation Committee Report on Executive Compensation"
below.
The table which follows sets forth information concerning grants of stock
options during 1995 to each of the executive officers who is named in the
Summary Compensation Table and the potential realizable value of such options at
assumed annual rates of stock price appreciation for the option term.
OPTION GRANTS IN 1995 (1)
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
----------------------------------------------------
NUMBER OF POTENTIAL REALIZABLE VALUE AT
SECURITIES % OF TOTAL ASSUMED ANNUAL RATES OF STOCK
UNDERLYING OPTIONS PRICE APPRECIATION FOR OPTION
OPTIONS GRANTED TO EXERCISE OR TERM (2)
GRANTED EMPLOYEES IN BASE PRICE EXPIRATION -------------------------------
NAME (#)(3) FISCAL YEAR ($/SH)(3) DATE 0%($) 5%($) 10%($)
- ------------------------------------- ------------ ----------- ---------- ----- --------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Wayne R. Sanders........... 248,159 13.7 49.31 2/15/05 0 7,695,608 19,502,181
O. George Everbach......... 20,679 1.1 49.31 2/15/05 0 641,272 1,625,110
Thomas J. Falk............. 62,039 3.4 49.31 2/15/05 0 1,923,879 4,875,486
James G. Grosklaus......... 31,019 1.7 49.31 2/15/05 0 961,924 2,437,704
James T. McCauley.......... 31,019 1.7 49.31 2/15/05 0 961,924 2,437,704
</TABLE>
- ---------------
(1) The plans governing stock option grants provide that the option price per
share shall be no less than 100 percent of the market value per share of the
Corporation's common stock at the date of grant. The term of any option is
no more than 10 years from the date of grant. Options granted in 1995 become
exercisable 30 percent after the first year following the grant thereof, an
additional 30 percent after the second year and the remaining 40 percent
after the third; provided however, that all such options become exercisable
upon the death, total and permanent disability, or retirement of the officer
and options granted in 1995 under certain foreign regulations become 100
percent exercisable after three years.
(2) The dollar amounts under these columns are the result of calculations at the
5% and 10% rates set by, and the 0% rate permitted by, Securities and
Exchange Commission rules and are not intended to forecast possible future
appreciation, if any, in the Corporation's stock price.
(3) The number of options granted and the exercise price per option in the table
reflect adjustments made by the Compensation Committee in December 1995 to
preserve the benefit to participants in connection with, and give effect to,
the spin-off by the Corporation on November 30, 1995 of the stock of
Schweitzer-Mauduit International, Inc.
The table which follows sets forth information concerning exercises of
stock options during 1995 by each of the executive officers who is named in the
Summary Compensation Table and the value of his unexercised options as of
December 31, 1995 based on a closing stock price of $82.75 per share of the
Corporation's common stock on such date:
AGGREGATED OPTION EXERCISES IN 1995
AND OPTION VALUES AS OF DECEMBER 31, 1995
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
DECEMBER 31, DECEMBER 31,
SHARES ACQUIRED VALUE 1995 (#) 1995 ($)
ON EXERCISE REALIZED EXERCISABLE/ EXERCISABLE/
NAME (#) ($) UNEXERCISABLE UNEXERCISABLE
- -------------------------------------------------------------- -------- -------------- --------------
<S> <C> <C> <C> <C>
Wayne R. Sanders............................... 0 0 209,902 8,189,487
281,247 9,161,041
O. George Everbach............................. 0 0 37,224 1,475,932
28,951 907,157
Thomas J. Falk................................. 0 0 29,986 1,024,498
72,379 2,344,148
James G. Grosklaus............................. 0 0 81,685 3,825,087
41,359 1,306,839
James T. McCauley.............................. 0 0 44,462 1,748,877
41,359 1,306,839
</TABLE>
10
<PAGE> 14
The table which follows sets forth information concerning grants of
participation share awards during 1995 to each of the executive officers who is
named in the Summary Compensation Table and the estimated future payouts with
respect thereto:
LONG-TERM INCENTIVE PLANS -- AWARDS IN 1995(1)
<TABLE>
<CAPTION>
PERFORMANCE ESTIMATED FUTURE PAYOUTS UNDER
NUMBER OF OR OTHER NON- STOCK PRICE-BASED PLANS
SHARES, UNITS PERIOD UNTIL ---------------------------------
OR OTHER MATURATION THRESHOLD TARGET MAXIMUM
NAME RIGHTS(#) OR PAYOUT ($) ($)(2) ($)
- -------------------------------------------------- ------------ --------- --------- -------
<S> <C> <C> <C> <C> <C>
Wayne R. Sanders..................... 80,000 5 years N/A 2,921,600 N/A
O. George Everbach................... 10,000 5 years N/A 365,200 N/A
Thomas J. Falk....................... 30,000 5 years N/A 1,095,600 N/A
James G. Grosklaus................... 15,000 5 years N/A 547,800 N/A
James T. McCauley.................... 15,000 5 years N/A 547,800 N/A
</TABLE>
- ---------------
(1) Pursuant to the plans governing participation shares, each participation
share is assigned a base value equal to the book value of one share of the
Corporation's common stock as of the close of the fiscal year immediately
prior to the award. Each share in a participant's account is assigned a
dividend rate equal to the rate declared on the Corporation's common stock.
At the end of each fiscal quarter the amount of such dividends is determined
by multiplying the total cash dividend declared per share of the
Corporation's common stock during such quarter by the total of the
participation shares and dividend shares in the participant's account. Such
amount, when divided by the book value of one share of the Corporation's
common stock at the close of such fiscal quarter, is the number of dividend
shares credited to a participant's account for such quarter.
However, the plans provide that no dividend shares will be credited to a
participant's account in any quarter in which the total cash dividends per
share of common stock are (i) less than $.31 in the case of the 1986 Equity
Participation Plan (the "1986 Plan") and $.41 in the case of the 1992 Equity
Participation Plan (the "1992 Plan") or (ii) less than the total cash
dividends per share of common stock for the same quarter of the immediately
preceding year. In addition, in any quarter in which the dividend is less
than the dividend for the same quarter of the preceding year, the book value
of the participation shares will be reduced by the difference in the
dividend amounts between the two quarters.
The normal maturity date of a participation share award will be the close of
the fiscal year in which the fifth or seventh anniversary of the date of the
award occurs. Within 90 days after such maturity date, the participant is
entitled to receive a cash payment equal to the sum of (i) the increase (if
any) in book value of the participation shares on the maturity date of the
award over the base value of such shares, and (ii) the book value of the
dividend shares on the maturity date (equal to the book value of an
equivalent number of shares of the Corporation's common stock).
For the purposes of the 1986 Plan, the Compensation Committee may adjust the
definition of book value for purposes of the plans to preserve the benefits
to the participants and the Corporation contemplated thereby in the event of
certain unusual or extraordinary transactions or events that materially
affect the Corporation's net income, book value, shares of common stock
outstanding or stockholders' equity. The book value for purposes of awards
made pursuant to the 1992 Plan shall be adjusted to exclude the effect of
stock repurchases and changes in the Corporation's accounting policies. In
addition, the 1992 Plan provides that up to 50 percent of the payment of
matured participation share awards may be made in the form of Corporation
common stock as determined by the Compensation Committee when the award is
granted.
(2) Under the 1992 Plan, there is no threshold or maximum payout. Based on the
Corporation's 1995 performance, the target amounts assume a 12.8% annual
increase in the book value of the Corporation's common stock (as determined
in accordance with the 1992 Plan) during the term of the award, and a $.01
per share annual increase in the quarterly dividend rate. These assumptions
are not intended to be a forecast of future performance by the Corporation.
11
<PAGE> 15
BOARD COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Compensation Committee of the Board of Directors of the Corporation is
composed entirely of directors who are not, and have never been, officers or
employees of the Corporation. The Board designates the members and the
Chairperson of such committee. The Compensation Committee also constitutes the
stock option committee for the stock option plans of the Corporation with
respect to which information regarding stock option grants and exercise
transactions is disclosed in this Proxy Statement. In addition, the Compensation
Committee is responsible for establishing and administering the policies which
govern annual compensation and long-term incentive awards. The Compensation
Committee periodically evaluates the Corporation's compensation programs, and
compares them with those of other companies, both within the Corporation's peer
industry group and other large industrial companies.
The companies which the Compensation Committee uses for making base salary
comparisons include some, but not all, of the companies appearing in the indexes
of the performance graph below. Because the Corporation's merger with Scott
Paper Company did not occur until late 1995, and did not influence peer group
comparisons in 1995, all peer group comparative data is presented as if such
merger transaction did not occur in 1995. The first group used for comparison is
composed of 22 companies which have significant consumer businesses (the
"Consumer Company Group"), of which the Corporation is about median in terms of
annual sales and with which the Corporation competes in its businesses and/or
for executive talent. The second group used for comparison is composed of 138
industrial companies with annual sales exceeding $1 billion (the "Industrial
Company Group"), of which the Corporation is in about the 75th percentile in
terms thereof. Written salary information concerning the compensation practices
of these two groups of companies was provided to the Corporation by two
independent consultants.
In determining the compensation to be paid to executive officers in 1995,
the Compensation Committee employed compensation policies designed to align such
compensation with the Corporation's overall business strategy, values and
management initiatives. Such policies are intended to (i) reward executives for
long-term strategic management and the enhancement of stockholder value through
stock option and long-term incentive awards, (ii) support a performance-oriented
environment that rewards achievement of internal company goals and recognizes
company performance compared to the performance of similarly situated companies
and of other large industrial companies through the annual payment of cash
bonuses, and (iii) attract and retain executives whose abilities are considered
essential to the long-term success and competitiveness of the Corporation
through the Corporation's salary administration program.
Salaries for 1995
In determining base salaries of executive officers, the Compensation
Committee compares the executive officers' salaries to those for similar
positions in the two groups of companies referred to above, with primary
emphasis placed upon the Consumer Company Group so that the Committee may
compare data on specific salary levels for comparable positions. The
Compensation Committee's policy is to set executive officers' salaries at or
near the median salary level of such companies, with the salary of the Chief
Executive Officer set at or near the median salary level for chief executive
officers of the Consumer Company Group. In implementing such policy, the
Compensation Committee also considers the individual performance of the officer,
the performance of the unit over which the officer has responsibility (primarily
based upon the operating profit of such unit), the performance of the
Corporation (primarily based upon earnings per share and return on stockholders'
equity), and the officer's tenure. No specific weight is assigned to any
individual factor. Salary actions taken by the Compensation Committee with
respect to the executive officers in 1995 were consistent with the policies and
practices described above.
12
<PAGE> 16
Cash Bonus Awards for 1995
The cash bonus awards for 1995 set forth in the Summary Compensation Table
were based on the Corporation's Management Achievement Award Program. The
Compensation Committee's policy is to provide opportunities to an executive
officer for cash bonuses under such program which, together with his or her base
salary, are within the third quartile (that quartile between the 50th and 75th
percentile) of compensation for the Industrial Company Group if such officer's
goals have been fully met during the year. In determining such target cash bonus
awards, the Compensation Committee places primary emphasis on data for the
Industrial Company Group, as opposed to the Consumer Company Group, because such
data represents the performance based compensation practices of a broadly based
group of companies.
Actual annual cash bonus awards are determined by measuring performance
against specific goals established at the beginning of each year. The goals take
into account, depending on the responsibility of the individual, one or more of
the following: the individual's performance; the performance of the functional
group or unit with which the individual is associated (primarily based upon the
operating profit of such unit); and the overall performance of the Corporation
(primarily based upon earnings per share and return on average stockholders'
equity). An executive officer's goals are designed to reflect the relationship
of his or her responsibilities to the Corporation's long-term goal of
maintaining a sustainable annual return on average stockholders' equity of 20
percent (the "Return on Equity Goal"). Such goals may or may not be equally
weighted and will vary from one executive officer to another. The opportunities
for cash bonus awards for the executive officers in 1995 were consistent with
the policies and practices described above. Certain performance objectives were
exceeded for 1995 (primarily the earnings per share goal and the successful
consummation of the merger with Scott Paper Company); therefore, bonus awards
for certain officers, and all of the executive officers named in the Summary
Compensation Table, exceeded target levels in 1995.
Based upon comparison of the most recent data provided by the independent
consultants described above, the cash bonuses paid to the named executive
officers, taken together with base salaries, were within the third quartile of
such compensation for comparable officers in the Industrial Company Group.
Cash bonuses for 1995 were based entirely on corporate performance for four
of the five executive officers named in the Summary Compensation Table and on
both corporate performance and unit performance for one of the executive
officers named in the Summary Compensation Table, although on a subjective
basis, individual performance also was a factor.
Participation Shares and Stock Options
The Corporation maintains the 1986 Equity Participation Plan and the 1992
Equity Participation Plan (collectively, the "Equity Plans"), pursuant to which
stock option grants and long-term incentive awards have been made to executive
officers. The Equity Plans are intended to provide a means of encouraging the
acquisition of an ownership interest in the Corporation by those employees,
including executive officers, who contribute materially by managerial,
scientific or other innovative means to the success of the Corporation, thereby
increasing their motivation for and interest in the Corporation's long-term
success.
The 1986 Equity Participation Plan has expired, and no additional awards
can be made under such plan. However, all awards outstanding on the expiration
date of such Equity Plan remain in full force and effect in accordance with its
terms.
The number of long-term incentive or stock option awards granted to an
executive officer is based principally on such officer's position and the
compensation practices of the Consumer Company Group. The Compensation
Committee's policy is for the value of such awards, on an annualized basis, to
be within the third quartile with respect to similar awards made by the
13
<PAGE> 17
companies comprising such group. In implementing such policy, the Compensation
Committee also considers the individual performance of the officer. The
Committee does not determine the size of such grants by reference to the amount
and value of awards currently held by an executive officer. However, the
Compensation Committee takes into account the timing and size of prior grants to
an executive officer. The payout resulting from any long-term incentive or stock
option award is based on the growth in the book value and market value,
respectively, of the Corporation's common stock subsequent to the grant of such
awards.
The Equity Plans employ book value through the use of participation shares
and dividend shares, each of which, when awarded, is credited to a participant's
memorandum account. For a description of the material terms of participation
share awards pursuant to the Equity Plans, see note 1 to the table above
entitled "Long-Term Incentive Plans - Awards in 1995."
The Equity Plans also employ market value as a basis for rewarding
performance through the use of tax-qualified and nonqualified stock options. For
a description of the material terms of stock option grants pursuant to the
Equity Plans, see note 1 to the table above entitled "Option Grants in 1995."
Certain of the grants and awards made to the named executive officers in
1995 were larger than the normal amount which would have been granted under the
Compensation Committee's policy. The larger than normal grants and awards, which
were made in order to retain and motivate current and future senior management,
to recognize recent promotions and to more closely align the compensation of
senior management with stockholder value, were intended to be a one-time
occurrence. The size of the larger than normal grants to certain executive
officers, including the Chief Executive Officer, were determined on the basis of
the subjective judgment of the Committee following deliberations by the
Committee and consultation with an independent consultant.
1995 Compensation of the Chief Executive Officer
The Compensation Committee based the 1995 compensation of the Chief
Executive Officer on the policies and practices described above. The
Compensation Committee increased Mr. Sanders' salary in 1995 to a level which it
believed was consistent with his responsibilities, his performance toward
attaining the Corporation's Return on Equity Goal, and the levels of chief
executive officer compensation reported by the Consumer Company Group. Based
upon comparison of the data provided by the independent consultants described
above, Mr. Sanders' salary in 1995 was within the second quartile of salary
levels of the chief executive officers of the Consumer Company Group. It is the
Compensation Committee's intention not to adjust the Chief Executive Officer's
salary until 1997.
The cash bonus which was paid to Mr. Sanders for 1995 was primarily in
recognition of the progress, as determined by the members of the Board of
Directors who are not officers or employees of the Corporation or any of its
subsidiaries or equity companies, made by the Corporation during the year toward
attaining the Corporation's earnings per share goal, Return on Equity Goal and
long-term strategic goals, including the successful consummation of the merger
with Scott Paper Company. Because certain performance objectives were exceeded
during 1995, the bonus award to Mr. Sanders in 1995 exceeded target levels.
Based upon comparison of the most recent data provided by the independent
consultants described above, the cash bonus paid to Mr. Sanders for 1995, taken
together with his base salary, was within the third quartile of such
compensation paid to chief executive officers of the Industrial Company Group.
Mr. Sanders' larger than normal participation share and stock option awards
during 1995 were primarily due to the Compensation Committee's determination and
Mr. Sanders' desire that his overall long-term compensation should be more
closely aligned with stockholder value. In determining to make this larger than
normal grant, the Compensation Committee was influenced by the trend among
comparable companies to make chief executive officer compensation more dependent
upon stockholder value, primarily through long-term incentives such as stock
options. Based upon
14
<PAGE> 18
information provided by an outside consultant, and taking into consideration the
timing and size of prior grants to the Chief Executive Officer, the Committee
determined that a one-time larger than normal grant of stock options and
participation shares would provide a level and mix of compensation more focused
on stockholder value and consistent with comparable companies.
The Compensation Committee believes that executive compensation for 1995
adequately reflects its policy to align such compensation with overall business
strategy, values and management initiatives, and to ensure that the
Corporation's goals and performance are consistent with the interests of its
stockholders.
Tax Deduction for Executive Compensation
The Committee has determined that it is not in the stockholders' interests
to modify the Corporation's Management Achievement Award Program plan to enable
the Corporation to meet the requirements of the federal tax code provisions
which limit to $1 million the deductibility of annual cash compensation paid to
any executive officer named in the Summary Compensation Table for corporate
income tax purposes. The Committee believes that it is in the stockholders'
interest for the Committee to retain discretion in the awarding of cash bonuses
to such officers to better ensure that the bonus which is paid to each such
officer reflects the officer's contribution to the achievement of the
Corporation's Return on Equity Goal and long-term strategic goals.
However, the Corporation has adopted a deferred compensation plan in
response to such limitations on executive compensation deductibility which
allows each executive officer to defer all or a portion of his or her bonus, and
all salary in excess of $1 million, for any fiscal year. Such plan permits such
officers to limit their annual cash compensation to the $1 million limitation
which may be deducted by the Corporation for federal income tax purposes. Such
deferral will result in the possible deduction by the Corporation of such
compensation when paid; however, there is no obligation on any executive officer
to defer any such amounts during any fiscal year. The Corporation has determined
that the impact to the Corporation of being unable to deduct that portion of the
cash bonus paid to such officers which, together with their annual salary,
exceeds $1 million will be minimal. In 1995, the Chief Executive Officer elected
to defer all amounts of his salary and bonus in excess of $1 million.
Furthermore, in order to maximize the deductibility of the compensation
paid to the Corporation's executive officers, the Corporation's 1992 Equity
Participation Plan, as amended, ensures that compensation resulting from the
exercise of stock options and payments made in connection with participation
share awards will be fully deductible.
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS
Pastora San Juan Cafferty, Chairperson
Louis E. Levy
Randall L. Tobias
15
<PAGE> 19
PERFORMANCE GRAPH
Comparison of
Five Year Cumulative Total Return Among
Kimberly-Clark, S&P 500, and Peer Group*
The stock price performance shown on the graph below is not necessarily
indicative of future price performance.
The graph treats as a special dividend the distribution on November 30,
1995 of one share of common stock of Schweitzer-Mauduit International, Inc. for
every 10 shares of the Corporation's common stock held of record on November 13,
1995.
<TABLE>
<CAPTION>
Measurement Period Kimberly-
(Fiscal Year Covered) Clark S&P 500 Peer Group
<S> <C> <C> <C>
1990 100 100 100
1991 124.59 130.47 129.71
1992 149.27 140.41 133.67
1993 135.78 154.56 139.71
1994 136.19 156.60 157.03
1995 236.21 215.45 212.45
</TABLE>
* The companies included in the Peer Group are The Clorox Co., Colgate-Palmolive
Company, James River Corp, Johnson & Johnson, Paragon Trade Brands, Inc., Pope
& Talbot, Inc., The Procter & Gamble Company, Tambrands Inc., The Unilever
Group, Champion International, International Paper Company and Mead Corp.
Scott Paper Company, which was included in the Peer Group last year, is not
included in the Peer Group this year because it was merged with a wholly owned
subsidiary of the Corporation on December 12, 1995 and, as a result, its stock
is no longer publicly traded.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During 1995, the following Directors served, and currently are serving, as
members of the Compensation Committee of the Board of Directors of the
Corporation: Pastora San Juan Cafferty, Chairperson; Louis E. Levy; and Randall
L. Tobias. In addition, Paul J. Collins served as a member of the Compensation
Committee from January 1, 1995 until April 20, 1995.
Wayne R. Sanders, Chairman of the Board and Chief Executive Officer of the
Corporation, serves as a member of the compensation committee of the board of
directors of Kimberly-Clark de Mexico, S.A. de C.V. Claudio X. Gonzalez,
Chairman of the Board and Managing Director of Kimberly-Clark de Mexico, S.A. de
C.V., serves as a member of the Board of Directors of the Corporation.
Kathi P. Seifert, Group President - North American Personal Care Products
of the Corporation, serves as a member of the board of directors of Eli Lilly
and Company. Randall L. Tobias, Chairman
16
<PAGE> 20
of the Board and Chief Executive Officer of Eli Lilly and Company, serves as a
member of the Compensation Committee of the Board of Directors of the
Corporation.
DEFINED BENEFIT RETIREMENT PLAN
The table below illustrates the estimated annual standard pension benefit
payable upon retirement in 1995 at specified compensation levels and years of
service classifications.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
YEARS OF BENEFIT SERVICE
--------------------------------------------------------------------------------
15 20 25 30 35 40 45
REMUNERATION YEARS YEARS YEARS YEARS YEARS YEARS YEARS
- ------------------------------------- -------- -------- -------- -------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
$ 200,000............................ $ 45,000 $ 60,000 $ 75,000 $ 90,000 $ 105,000 $ 120,000 $ 135,000
400,000............................ 90,000 120,000 150,000 180,000 210,000 240,000 270,000
600,000............................ 135,000 180,000 225,000 270,000 315,000 360,000 405,000
800,000............................ 180,000 240,000 300,000 360,000 420,000 480,000 540,000
1,000,000........................... 225,000 300,000 375,000 450,000 525,000 600,000 675,000
1,200,000........................... 270,000 360,000 450,000 540,000 630,000 720,000 810,000
1,400,000........................... 315,000 420,000 525,000 630,000 735,000 840,000 945,000
1,600,000........................... 360,000 480,000 600,000 720,000 840,000 960,000 1,080,000
1,800,000........................... 405,000 540,000 675,000 810,000 945,000 1,080,000 1,215,000
2,000,000........................... 450,000 600,000 750,000 900,000 1,050,000 1,200,000 1,350,000
</TABLE>
The compensation covered by the Corporation's defined benefit plan for
which the above table is provided includes the salary and bonus information set
forth in the Summary Compensation Table. The estimated years of benefit service,
as of normal retirement at age 65, for the executive officers named in the
Summary Compensation Table are: O. George Everbach, 19.7 years; Thomas J. Falk,
40.0 years; James G. Grosklaus, 42.7 years; James T. McCauley, 34.7 years; and
Wayne R. Sanders, 37.1 years. Under the plan, an employee is entitled to receive
an annual standard benefit based on years of benefit service and subject, in
some cases, to deduction for social security benefits. Benefits under the plan
will be limited to the extent required by the Internal Revenue Code of 1986, as
amended, with excess benefits over such limitation being paid pursuant to
supplemental plans. While such supplemental plans remain unfunded, in 1994 the
Board of Directors approved the establishment of a trust and authorized the
Corporation to make contributions to such trust in order to provide a source of
funds to assist the Corporation in meeting its liabilities under the plans. In
1995, the Corporation made certain of such contributions to the trust. Each of
the executive officers named in the Summary Compensation Table is a participant
in such supplemental plans.
Retirement benefits for participants who have at least five years of
vesting service may begin on a reduced basis at age 55, or on an unreduced basis
at normal retirement age. Unreduced benefits also are available for participants
with 10 years of vesting service at age 62 or as early as age 60 with 30 years
of vesting service. The normal form of benefit is a single-life annuity payable
monthly. Benefits will be actuarially adjusted if the employee receives one of
the available forms of joint and survivor or other optional forms of benefit. In
addition, each participant in the supplemental plans has the option of receiving
an actuarially determined lump sum payment upon retirement after age 55 in lieu
of the monthly payments which otherwise would be payable to such participant
under such plans. Further, in the event of a change of control of the
Corporation or a reduction in the Corporation's long-term credit rating below
investment grade, each such participant would have the option of receiving the
present value of his or her accrued benefits in such plans at such time in a
lump sum, reduced by 10% and 5% for active and former employees, respectively.
EXECUTIVE SEVERANCE PLAN
The Corporation's Executive Severance Plan provides that in the event of
termination of a participant's employment with the Corporation for any reason
(other than death or disability) within
17
<PAGE> 21
two years after a change of control of the Corporation, as defined in the plan,
the participant will receive a cash payment in an amount equal to the sum of (i)
three times base salary and the maximum management achievement award, and (ii)
the value of unmatured or unexercised awards or grants and nonvested benefits
under the Corporation's Equity Participation Plans and the Salaried Employees
Incentive Investment Plan and successor plans. The plan also provides for
monthly supplemental retirement benefits equal to those that would have accrued
had employment continued for an additional three years, for certain relocation
costs, and for the continuation of certain other benefits for varying periods of
up to three years. The Board has determined the eligibility criteria for
participation in the plan. A participant ceases to be a participant in the plan
when notified by the Board that it has determined that such participant has
ceased to be a key executive for purposes of the plan. The Corporation has
agreements under the plan with each executive officer who is named in the
Summary Compensation Table. The maximum amounts payable pursuant to agreements
under the plan to such executive officers, assuming that a change of control of
the Corporation and the termination of employment of such officers had occurred
on December 31, 1995, would have been: O. George Everbach, $4,828,420; Thomas J.
Falk $6,235,545; James G. Grosklaus, $8,435,866; James T. McCauley, $6,213,484;
and Wayne R. Sanders, $26,914,213.
COMPENSATION OF DIRECTORS
Directors who are not officers or employees of the Corporation or any of
its subsidiaries, affiliates or equity companies receive an annual retainer of
$25,000 payable pro rata quarterly in advance, and a daily attendance fee of
$1,200 for each day or fraction thereof spent in attendance at a meeting of the
Board or any committee thereof, subject to a maximum of $3,600 for any day on
which more than one such meeting is held. Such directors also receive a fee of
$2,000 per day, subject to a maximum of $72,000 per calendar year, for the
independent performance of services for the benefit of the Corporation or its
affiliates, other than services which were related to meetings of the Board or
any committee thereof, which are requested by the Board, any committee thereof
or the Chief Executive Officer. Pursuant to the Outside Directors' Stock
Compensation Plan, which has been approved by the Board of Directors and is
being recommended to the stockholders for their approval at the Annual Meeting,
each such director also will receive 300 shares of common stock of the
Corporation on December 31 of each year. See "Proposal 3. Approval of the
Outside Directors' Stock Compensation Plan." In addition, the Corporation
reimburses such directors for expenses incurred as a result of attending such
meetings or performing such services. A director who is an officer or an
employee of the Corporation or any of its subsidiaries, affiliates or equity
companies does not receive any fees for services as a member of the Board or any
committee thereof, but is reimbursed for expenses incurred as a result of such
service.
Under the deferred compensation plan for directors of the Corporation,
directors who are not officers or employees of the Corporation or any of its
subsidiaries, affiliates or equity companies may make an irrevocable election to
defer receipt of all or a portion of their annual retainer and meeting fees for
any year. Compensation of a director that is deferred under the plan is credited
either to a cash account or a stock account of such director, as provided in
such election. Amounts allocated to a cash account are converted into cash
credits and will earn additional cash credits quarterly at a rate of one-fourth
of the per annum rate of either six percent or of that equivalent to the rate
paid from time to time on six-month U.S. Treasury Bills, whichever is higher.
Amounts allocated to a stock account are converted into stock credits equal to
the number of shares of common stock of the Corporation which could have been
purchased with such amounts. A participant's stock account also is credited with
additional stock credits based on the amount of any dividends that are paid on
the Corporation's common stock. Cash credits and stock credits are converted to
and paid in cash at the time of distribution on the date fixed by a participant
at the time of election, and with respect to stock credits, based on the price
of a share of common stock of the Corporation. Stock credits are not shares of
stock, no shares of the Corporation's common stock are ever distributed to a
participant under the plan, and no participant acquires any rights as a
18
<PAGE> 22
holder of common stock under the plan. All accounts are distributed in one to 10
annual installments, as fixed by the participant in the election to defer, or
upon death.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR THE ELECTION OF
THE FOUR NOMINEES FOR DIRECTOR.
PROPOSAL 2. APPROVAL OF AUDITOR
The Audit Committee of the Board of Directors has selected, and the Board
of Directors has approved, Deloitte & Touche LLP as the principal independent
auditor to audit the financial statements of the Corporation for 1996, subject
to ratification by the stockholders. If the stockholders do not approve the
selection of Deloitte & Touche LLP, the selection of another independent auditor
will be considered by the Audit Committee. Deloitte & Touche LLP has been the
independent auditor for the Corporation since its incorporation in 1928.
Representatives of Deloitte & Touche LLP are expected to be present at the
Annual Meeting with the opportunity to make a statement if they desire to do so,
and will be available to respond to appropriate questions.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THIS
SELECTION.
PROPOSAL 3. APPROVAL OF THE OUTSIDE DIRECTORS' STOCK COMPENSATION PLAN
At the Annual Meeting, stockholders will be asked to approve the
Kimberly-Clark Outside Directors' Stock Compensation Plan (the "Director Plan"),
which has been approved by the Board of Directors.
The Director Plan is intended to promote the interests of the Corporation
and its stockholders by enhancing the Corporation's ability to attract, motivate
and retain as directors who are not employees of the Corporation or its
subsidiaries or equity companies ("Outside Directors") persons of training,
experience and ability. The Director Plan also is intended to encourage the
highest level of Outside Director performance by aligning the Outside Directors'
economic interests more closely with those of the Corporation's stockholders.
The principal features of the Director Plan are summarized below. The full
text of the Director Plan is set forth as Exhibit A to this Proxy Statement,
which you are urged to read carefully.
SHARES TO BE GRANTED; ADJUSTMENTS
A maximum of 35,000 shares of the Corporation's common stock ("Stock") may
be issued under the Director Plan, subject to appropriate adjustments in the
event of certain corporate transactions, including stock dividends and splits,
to prevent the dilution or enlargement of the benefits made available under the
Director Plan.
TERM OF DIRECTOR PLAN
The Director Plan shall become effective as of January 1, 1996, subject to
it being approved by the holders of the Corporation's common stock. The Director
Plan will terminate, except with respect to previously awarded grants, upon the
earlier of the following dates or events: (i) when all Stock available for
issuance under the Director Plan has been issued; (ii) upon a date determined by
the Compensation Committee; or (iii) December 31, 2005.
TERMS OF THE GRANT
As part of his or her annual retainer, each Outside Director shall be
entitled to receive a grant of 300 shares of Stock on December 31 of each
calendar year during the term of the Director Plan, commencing on December 31,
1996. Upon the termination of an Outside Director's service as a member of the
Board, the Outside Director will be granted that number of shares of Stock
(rounded
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<PAGE> 23
to the nearest whole number) which is equal to 300 multiplied by a fraction, the
numerator of which is the number of full and partial calendar months served by
the Outside Director during the applicable year and the denominator of which is
12.
Each Outside Director will be entitled to receive all cash dividends and
other distributions made with respect to the shares of Stock granted under the
Director Plan. Dividends will be credited to an interest-bearing account.
Furthermore, each Outside Director will have the right to vote the shares of
Stock registered in his or her name.
All of the shares of Stock granted to an Outside Director under the
Director Plan, together with all cash dividends and interest thereon, will be
restricted and nontransferable until his or her termination of service as a
member of the Board.
ADMINISTRATION AND AMENDMENT
The Director Plan will be administered by the Compensation Committee of the
Board of Directors. The Director Plan may be amended at any time by such
Committee, provided that, except as required to preserve the benefits to the
Outside Directors or as required by law, such Committee may not, without
stockholder approval, (i) modify the number of shares of Stock to be awarded to
an Outside Director in any given year, (ii) change the times at which, or the
period within which, Stock may be delivered under the Director Plan, or (iii)
adopt any amendment which would disqualify the Director Plan for the exemption
afforded by Rule 16b-3 under the Securities Exchange Act of 1934, as amended.
Any modification of any of the terms and provisions of the Director Plan may not
be made more than once every six months, other than to comport with changes in
the Internal Revenue Code, as amended, or the rules thereunder.
NEW PLAN BENEFITS
The following table sets forth the number of shares of Stock which would be
granted automatically to the Outside Directors on December 31, 1996 if the
Director Plan is approved by the Corporation's stockholders at the Annual
Meeting.
1996 OUTSIDE DIRECTOR STOCK AWARDS
<TABLE>
<CAPTION>
POSITION NUMBER OF SHARES
-------- ----------------
<S> <C>
All Outside Directors as a Group (10 persons)................................. 3,000(1)
</TABLE>
- ---------------
(1) Does not include shares of Stock that will be granted to former Outside
Directors who served as directors for a portion of the year and will be
entitled to an award proportionate to their length of service in 1996. The
Corporation anticipates that the aggregate of such awards in 1996 will not
exceed 300 shares of Stock.
OTHER INFORMATION
Effective as of the Annual Meeting, there will be ten Outside Directors of
the Corporation. The closing quotation of the common stock of the Corporation on
February 26, 1996, as reported in the Wall Street Journal Listing of Composite
Transactions was $77.50 per share.
A favorable vote by the holders of a majority of the Corporation's common
stock present, or represented, and voting at the Annual Meeting is required to
approve the Director Plan.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE
OUTSIDE DIRECTORS' STOCK COMPENSATION PLAN.
20
<PAGE> 24
1997 STOCKHOLDER PROPOSALS
Proposals by stockholders for inclusion in the Corporation's 1997 Proxy
Statement and form of proxy for the Annual Meeting of Stockholders to be held in
1997 should be addressed to the Secretary, Kimberly-Clark Corporation, P.O. Box
619100, Dallas, Texas 75261-9100, and must be received at such address no later
than November 6, 1996. Upon receipt of any such proposal, the Corporation will
determine whether or not to include such proposal in the Proxy Statement and
proxy in accordance with applicable law. It is suggested that such proposals be
forwarded by certified mail - return receipt requested.
OTHER MATTERS
The management of the Corporation knows of no other matters to be presented
at the meeting. Should any other matter requiring a vote of the stockholders
arise at the meeting, the persons named in the proxy will vote the proxies in
accordance with their best judgment.
By order of the Board of Directors.
/s/ DONALD M. CROOK
Donald M. Crook
Vice President and Secretary
KIMBERLY-CLARK CORPORATION
P. O. Box 619100
Dallas, Texas 75261-9100
Telephone (214) 281-1200
March 6, 1996
21
<PAGE> 25
EXHIBIT A
KIMBERLY-CLARK CORPORATION
OUTSIDE DIRECTORS'
STOCK COMPENSATION PLAN
1. INTRODUCTION
The Kimberly-Clark Outside Directors' Stock Compensation Plan (the "Plan")
specifies the compensation to be paid by Kimberly-Clark Corporation (the
"Company") in the form of shares of restricted common stock, par value $1.25 per
share, of the Company ("Stock") for services performed by Outside Directors (as
hereinafter defined).
The Plan is intended to promote the interests of the Company and its
stockholders by enhancing the Company's ability to attract, motivate and retain
as Outside Directors persons of training, experience and ability, and to
encourage the highest level of Outside Director performance by aligning the
Outside Directors' economic interests more closely with those of the Company's
stockholders.
2. DEFINITIONS
Unless otherwise defined in the text of the Plan, capitalized terms herein
shall have the meanings set forth in this Section 2.
(a) "Account" means the internal account maintained by the Company in
which cash dividends and interest thereon are accumulated for the benefit
of each Outside Director pursuant to the Plan.
(b) "Board" means the Board of Directors of the Company.
(c) "Committee" means the Compensation Committee of the Board.
(d) "Director" means a member of the Board.
(e) "Effective Date" means January 1, 1996, subject to the Plan being
approved by the stockholders of the Company as provided in Section 7 below.
(f) "Outside Director" means a Director who is not on the date of
grant of Stock pursuant to the Plan, or within one year prior to the date
of such grant, an "employee" of the Company, or any of its subsidiaries or
equity companies, within the meaning of Section 3(6) of the Employee
Retirement Income Security Act of 1974, as amended.
(g) "Retainer" means the annual retainer payable to an Outside
Director for services rendered as a Director.
(h) "Rule 16b-3" means Rule 16b-3 under the Securities Exchange Act of
1934, as amended.
(i) "Stock" means the restricted shares of the Company's common stock,
par value $1.25 per share, derived from a pool of 35,000 shares available
for grant under the Plan.
(j) "Stock Retainer" means the portion of each Outside Director's
Retainer that is payable in the form of Stock pursuant to the Plan.
3. PARTICIPANTS
Participation in the Plan is limited to Outside Directors. It is intended
that all Outside Directors will be participants in the Plan.
A-1
<PAGE> 26
4. ADMINISTRATION OF THE PLAN
The Plan shall be administered by the Committee, which shall have sole and
complete discretion and authority with respect thereto, except as expressly
limited by the Plan. All action taken by the Committee in the administration and
interpretation of the Plan shall be final and binding on all matters relating to
the Plan. All questions of interpretation, administration and application of the
Plan shall be determined by a majority of the members of the Committee, except
that the Committee may authorize any Directors, officers or employees of the
Company to assist the Committee in the administration of the Plan and to execute
documents on behalf of the Committee. The Committee also may delegate to such
Directors, officers and employees such other ministerial and limited
discretionary duties as it sees fit. No member of the Committee shall be liable
for any act done or omitted to be done by such member, or by any other member of
the Committee, in connection with the Plan, except for such member's own willful
misconduct or as otherwise expressly provided by statute.
All expenses of administering the Plan shall be paid by the Company.
5. TERM OF PLAN
The Plan shall become effective as of the Effective Date, subject to the
Plan being approved by the holders of the Company's common stock as provided in
Section 7 below. The Plan shall remain in effect until all authorized shares of
Stock have been issued, unless sooner amended or terminated by the Committee
pursuant to Section 11 hereof.
6. SHARES TO BE GRANTED; ADJUSTMENTS
(a) Shares To Be Granted
The aggregate maximum number of shares of Stock available for grant under
the Plan shall be 35,000 shares, subject to the adjustment provision set forth
in Section 6(b) below. Shares subject to the Plan will be either authorized and
unissued shares, or shares that were once issued and subsequently reacquired by
the Company in the form of treasury stock.
(b) Adjustments
In the event of a stock dividend, stock split, reverse stock split,
recapitalization, reorganization, merger, consolidation, spin-off, combination,
repurchase, share exchange or similar corporate transaction or event affecting
the Stock, the Committee shall make appropriate proportional adjustments as are
necessary to the number of shares of Stock that may be awarded under the Plan in
order to prevent the dilution or enlargement of any rights of any Outside
Director, provided that such adjustment shall not result in the issuance of
fractional shares. Any fractional share resulting from an adjustment pursuant to
this section shall be canceled and a cash equivalent shall be credited to the
Outside Director's Account.
7. REGISTRATION AND APPROVAL OF SHARES
Prior to the distribution of any shares under the Plan, the Stock must be
registered with the Securities and Exchange Commission and the Plan must be
approved by the affirmative vote of the holders of a majority of the shares of
the Company's common stock present or represented by proxy and entitled to vote
at the 1996 Annual Meeting of the Company's stockholders.
8. TERMS OF THE GRANTS
(a) Annual Grant As part of his or her annual Retainer and subject to the
availability of shares under Section 6(a), each Outside Director shall be
granted, without any further action or authorization, 300 shares of Stock on
December 31 of each calendar year during the term of the Plan, commencing on
December 31, 1996. Upon the termination of an Outside Director's service as a
A-2
<PAGE> 27
member of the Board, the Outside Director will be granted, without any further
action or authorization, that number of shares of Stock (rounded to the nearest
whole number) which is equal to 300 multiplied by a fraction, the numerator of
which is the number of full and partial calendar months served by the Outside
Director during the applicable year and the denominator of which is 12.
(b) Dividends Each Outside Director will be entitled to receive all cash
dividends and other distributions made with respect to the Stock granted under
the Plan. Cash dividends on the Stock shall be credited to each Outside
Director's Account if, as and when dividends are declared and paid by the
Company with respect to its outstanding shares of common stock. In the case of
dividends paid in property other than cash, the amount of the dividend shall be
deemed to be the fair market value of the property at the time of the payment of
the dividend, as determined in good faith by the Committee. As of the last day
of each calendar quarter, or as of the date the Account is distributed, if
earlier, such Account shall be credited with an additional amount equal to the
product of (a) the daily average balance in such Account during such quarter,
and (b) one-fourth of a rate yielding interest equal to the per annum market
discount rate for six-month U.S. Treasury Bills as published by the Federal
Reserve Board for the seven calendar days immediately prior to January 1 (for
additional amounts to be credited for the subsequent fiscal quarters ending on
March 31 and June 30) or July 1 (for additional amounts to be credited for the
subsequent fiscal quarters ending September 30 and December 31). In no case,
however, shall such interest rate be less than six percent per annum.
The Accounts established for Outside Directors are merely an administrative
convenience and the Company shall not be required to segregate any cash or other
property of the Company. Any amounts which become payable to an Outside Director
shall be paid from the general assets of the Company.
(c) Voting Rights Each Outside Director shall have the right to vote or
execute proxies with respect to the shares of Stock registered in his or her
name.
(d) Registration, Possession, Issuance and Delivery Each grant of Stock
under the Plan shall be immediately registered on the transfer ledgers of the
Company in the name of the Outside Director who receives the grant. Possession
of the certificate representing shares of Stock shall be retained by the
Treasurer of the Company for the benefit of each Outside Director until the
provisions of the Plan relating to removal of restrictions have been satisfied
as to particular shares of Stock. Thereupon, the Treasurer of the Company shall
promptly deliver the certificates for such shares of the Outside Director.
Notwithstanding any other provision of the Plan, the grant, issuance or delivery
of any shares of Stock may be postponed for such period as may be required to
comply with any applicable requirements of any national securities exchange or
any requirements under any other law or regulation applicable to the grant,
issuance or delivery of such shares. The Company shall not be obligated to
grant, issue or deliver any such shares if the grant, issuance or delivery
thereof would constitute a violation of any provision of any law or of any
regulation of any governmental authority or any national securities exchange.
(e) Transfer Restrictions The shares of Stock granted to an Outside
Director under the Plan may not be sold, assigned, pledged or otherwise
transferred or encumbered by the Outside Director, unless and until the
provisions of the Plan relating to removal of restrictions have been satisfied.
Thereafter, an Outside Director may transfer or encumber such shares of Stock
free from any restrictions under the Plan.
(f) Removal of Restrictions All of the shares of Stock granted to an
Outside Director under the Plan, together with all cash dividends and interest
thereon accumulated in the Outside Director's Account, shall become free of
restrictions imposed by this Section 8 and shall be distributed to the Outside
Director entitled thereto upon his or her termination of service as a member of
the Board. None of the shares of Stock granted to an Outside Director under the
Plan shall be subject to forfeiture upon the termination of such Outside
Director's service as a member of the Board prior to completion of his or her
term.
A-3
<PAGE> 28
9. NONTRANSFERABILITY OF RIGHTS
Any distribution under the Plan shall be made only to the applicable
Outside Director or his or her estate. No award, sum or other interest under the
Plan shall be subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or charge, and any attempt by an Outside
Director or any beneficiary under the Plan to do so shall be void. No interest
under the Plan shall in any manner be liable for or subject to the debts,
contracts, liabilities, engagements or torts of any Outside Director or his or
her estate.
10. NOTICES; DELIVERY OF STOCK CERTIFICATES
Any notice required or permitted to be given by the Company or the
Committee pursuant to the Plan shall be deemed given when personally delivered
or deposited in the United States mail, registered or certified, postage
prepaid, addressed to the Outside Director at the last address shown for the
Outside Director on the records of the Company. Delivery of Stock certificates
to persons entitled to receive distributions under the Plan shall be deemed
effected for all purposes when the Company or a stock transfer agent of the
Company shall have deposited such certificates in the United States mail,
addressed to such person at his or her last known address on file with the
Company.
11. AMENDMENT AND TERMINATION
The Plan may be amended at any time by the Committee; provided that, except
as provided in Section 6(b), the Committee may not, without Company stockholder
approval: (i) modify the number of shares of Stock to be awarded to an Outside
Director in any given year; (ii) change the times at which, or the period within
which, Stock may be delivered under the Plan, or (iii) adopt any amendment which
would disqualify the Plan for the exemption afforded by Rule 16b-3. Any
modification of any of the terms and provisions of the Plan, including this
Section 11, shall not be made more than once every six (6) months, other than to
comport with changes in the Internal Revenue Code, as amended, or the rules
thereunder.
The Plan shall terminate, except with respect to previously awarded grants,
upon the earlier of the following dates or events:
(a) when all Stock available for issuance hereunder has been issued
(or been made subject to a grant of Stock);
(b) upon a date determined by the Committee; or
(c) December 31, 2005
Notwithstanding the foregoing, no termination of the Plan shall materially
or adversely affect any rights of any Outside Director under any grant
previously made pursuant to the Plan.
12. TAXES
The Company shall require the withholding of any and all taxes that the
Company believes to be required to be withheld by any government or agency
thereof. The Company, in its discretion, may withhold Stock, with the Company
remitting to the appropriate tax authorities the fair market value of the Stock
withheld. The Outside Director or his or her estate shall bear all taxes,
irrespective of whether withholding is required.
13. GOVERNING LAW
The terms of the Plan shall be governed, construed, administered and
regulated in accordance with the laws of the state of Delaware and applicable
federal law. In the event any provision of the Plan shall be determined to be
illegal or invalid for any reason, the other provisions of the Plan shall
continue in full force and effect as if such illegal or invalid provision had
never been included herein.
A-4
<PAGE> 29
14. DIRECTOR'S SERVICE
Nothing contained in the Plan, or with respect to any grant hereunder,
shall interfere with or limit in any way the right of stockholders of the
Company to remove any Outside Director from the Board, nor confer upon any
Outside Director any right to continue to serve on the Board as an Outside
Director.
A-5
<PAGE> 30
[KIMBERLY-CLARK CORPORATION LOGO]
Invitation to Stockholders
Notice of 1996 Annual Meeting
Proxy Statement
[LOGO]
<PAGE> 31
[KIMBERLY-CLARK CORPORATION LOGO]
P P. O. BOX 619100, DALLAS, TEXAS 75261-9100
R PROXY FOR THE ANNUAL MEETING OF STOCKHOLDERS - APRIL 18, 1996
O SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS.
X
Y
Wayne R. Sanders, O. George Everbach and Donald M. Crook, or any of them,
with full power of substitution to each, hereby are appointed proxies and are
authorized to vote, as specified below, all shares of common stock that the
undersigned is entitled to vote at the Annual Meeting of Stockholders of
Kimberly-Clark Corporation, to be held at the Corporation's Roswell Operations
Headquarters, 1400 Holcomb Bridge Road, Roswell, Georgia on April 18, 1996 at
11:00 a.m. and at any adjournment thereof. In their discretion, the proxies are
authorized to vote on such other business as may properly come before the
meeting.
Please date, sign and return this proxy promptly. If you plan to attend
the meeting, please so indicate in the space provided on the reverse side.
If no direction is given, this proxy will be voted FOR proposals 1, 2 and 3. If
you prefer to vote separately on individual issues you may do so by marking the
appropriate boxes on the reverse side.
IMPORTANT: TO BE SIGNED AND DATED ON THE REVERSE SIDE
Please return this card in the self-addressed envelope provided.
<PAGE> 32
[X] PLEASE MARK
YOUR VOTES AS
IN THE EXAMPLE.
<TABLE>
<S> <C> <C> <C> <C>
IT IS NOT NECESSARY TO COMPLETE THE INFORMATION UNDER PROPOSALS 1, 2 AND 3
BELOW UNLESS YOU CHOOSE TO CAUSE YOUR SHARES TO BE VOTED SEPARATELY ON EACH
MATTER TO BE BROUGHT BEFORE THE ANNUAL MEETING OF STOCKHOLDERS.
The Board of Directors recommends a vote FOR proposals 1, 2 and 3.
FOR AGAINST ABSTAIN
1. Election of Directors 2. Selection of Auditor [ ] [ ] [ ]
NOMINEES: JOHN F. BERGSTROM, PAUL J. COLLINS,
ROBERT W. DECHERD AND FRANK A. MCPHERSON 3. Approval of Outside Directors' [ ] [ ] [ ]
(terms to expire at 1999 Annual Meeting of Stockholders) Stock Compensation Plan
[ ] FOR ALL [ ] WITHHOLD AUTHORITY
NOMINEES TO VOTE FOR ALL NOMINEES
MARK HERE FOR [ ] MARK HERE [ ]
[ ] _______________________________________________________________ ADDRESS CHANGE AND NOTE IF YOU PLAN TO ATTEND
FOR all nominees, except vote withheld for those named above. AT LOWER LEFT THE MEETING
I will be accompanied by _____________________________________________________
Please sign below exactly as name appears hereon. Joint owners should each
sign. When signing as attorney, executor, administrator, trustee or guardian,
please give full title as such. If signing in the name of a corporation or
partnership, please sign full corporate or partnership name and indicate title
of authorized signatory.
Stockholder ____________________________________Dated _______________________
Signature(s) ____________________________________Dated _______________________
</TABLE>
