<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 2, 1998
REGISTRATION NO. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
Registration Statement
Under
The Securities Act of 1933
KIMBERLY-CLARK CORPORATION
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 39-0394230
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
P.O. BOX 619100 75261-9100
DALLAS, TEXAS (Zip Code)
(Address of Principal Executive Offices)
</TABLE>
KIMBERLY-CLARK CORPORATION DEFINED CONTRIBUTION PLANS TRUST
KIMBERLY-CLARK CORPORATION SALARIED EMPLOYEES INCENTIVE INVESTMENT PLAN
KIMBERLY-CLARK CORPORATION HOURLY EMPLOYEES INCENTIVE INVESTMENT PLAN
KIMBERLY-CLARK CORPORATION RETIREMENT CONTRIBUTION PLAN
(Full Title of the Plans)
O. GEORGE EVERBACH
SENIOR VICE PRESIDENT -- LAW AND GOVERNMENT AFFAIRS
P.O. BOX 619100
DALLAS, TEXAS 75261-9100
(972) 281-1200
(Name, Address and Telephone Number, Including Area Code,
of Agent for Service)
CALCULATION OF REGISTRATION FEE
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<CAPTION>
========================================================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM
TITLE OF SECURITIES AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
TO BE REGISTERED REGISTERED PER SHARE OFFERING PRICE REGISTRATION FEE
- - - ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $1.25 par
value(1)................. 15,000,000 shares(2) $47.97(3) $719,550,000(3) $212,267.25
- - - ------------------------------------------------------------------------------------------------------------------------
Preferred Stock Purchase
Rights(1)................ 15,000,000 rights(3) (4) (4) (4)
========================================================================================================================
</TABLE>
(1) In addition, pursuant to Rule 416(c) under the Securities Act of 1933, as
amended, this Registration Statement also covers an indeterminate amount of
interests to be offered or sold pursuant to the Plans.
(2) The shares of common stock being registered consist of shares to be acquired
by the Trustee pursuant to the Plans for the accounts of participants.
(3) Estimated solely for the purpose of calculating the registration fee
required by Section 6(b) of the Securities Act of 1933, as amended, pursuant
to Rule 457(c) thereunder, based on $47.97, the average of the high and low
prices of the Common Stock on December 26, 1997, as reported in the
consolidated reporting system.
(4) The Preferred Stock Purchase Rights initially are attached to and trade with
the shares of Common Stock being registered hereby. Value attributable to
such Rights, if any, is reflected in the market price of the Common Stock.
THE SECTION 10(a) PROSPECTUS FOR THE APPLICABLE PLAN IS A COMBINED
PROSPECTUS RELATING ALSO TO INTERESTS AND COMMON STOCK REGISTERED PURSUANT TO
REGISTRATION STATEMENT NO. 33-58402, EFFECTIVE FEBRUARY 16, 1993, REGISTRATION
STATEMENT NO. 33-64931, EFFECTIVE DECEMBER 12, 1995, AND/OR REGISTRATION
STATEMENT NO. 333-17367, EFFECTIVE DECEMBER 6, 1996, AS TO EACH OF WHICH,
PURSUANT TO RULE 429 UNDER THE SECURITIES ACT OF 1993, AS AMENDED, A SEPARATE
POST-EFFECTIVE AMENDMENT WILL NOT BE FILED.
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<PAGE> 2
The purpose of this registration statement is to register 15,000,000
additional shares (the "Additional Shares") of the Registrant's common stock,
$1.25 par value ("Common Stock"), and related plan interests, to be offered
under the Kimberly-Clark Corporation Salaried Employees Incentive Investment
Plan (the "Salaried IIP"), the Kimberly-Clark Corporation Hourly Employees
Incentive Investment Plan (the "Hourly IIP") and the Kimberly-Clark Corporation
Retirement Contribution Plan (the "RCP"). Effective January 1, 1998, the
Kimberly-Clark Tissue Company Investment Plan for Salaried Employees and the
Kimberly-Clark Tissue Company Investment Plan for Hourly Employees were merged
with and into the Salaried IIP and the Hourly IIP, respectively. The shares of
Common Stock and related plan interests offered under each of the Salaried IIP,
the Hourly IIP and the RCP are held in the Kimberly-Clark Corporation Defined
Contribution Plans Trust (the "Trust"). Pursuant to General Instruction E of
Form S-8, the contents of the Registrant's Registration Statements on Form S-8,
filed with the Securities and Exchange Commission (the "SEC") on February 16,
1993 (Registration No. 33-58402), December 12, 1995 (Registration No. 33-64931)
and December 6, 1996 (Registration No. 333-17367) are incorporated herein by
reference.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents heretofore filed by the Registrant with the SEC are
incorporated herein by reference:
1. The Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996;
2. The Annual Reports on Form 11-K of the Plans (and predecessors
thereof) for the year ended December 31, 1996;
3. The Registrant's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1997, June 30, 1997 and September 30, 1997;
4. The Registrant's Current Reports on Form 8-K dated February 20,
1997, February 25, 1997, April 24, 1997, October 30, 1997 and November 25,
1997;
5. The description of the Registrant's Common Stock contained in the
Joint Proxy Statement/Prospectus constituting a part of the Registrant's
Registration Statement on Form S-4 (Registration No. 333-40013); and
6. The description of the Registrant's Preferred Stock Purchase Rights
contained in Registration Statements on Form 8-A and Form 8-A/A filed by
the Registrant with the SEC on June 21, 1988, June 13, 1995 and March 17,
1997.
All documents filed by the Registrant and the Plans pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), subsequent to the date hereof and prior to the filing of a
post-effective amendment which indicates that all securities offered hereby have
been sold or which deregisters all securities then remaining unsold shall be
deemed to be incorporated by reference herein and to be a part hereof from the
dates of filing of such reports and documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Registration Statement
to the extent that a statement contained herein, or in any other subsequently
filed document which also is incorporated or deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
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<PAGE> 3
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant's By-laws (the "By-Laws") provide, among other things, that
the Registrant shall (i) indemnify any person who was or is a party or is
threatened to be made a party to any threatened, pending or completed action,
suit or proceeding, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the Registrant) by reason of the
fact that he is or was a Director or officer of the Registrant, or is or was
serving at the request of the Registrant as a Director or officer of another
corporation, or, in the case of a Director or officer of the Registrant, is or
was serving as an employee or agent of a partnership, joint venture, trust or
other enterprise, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement actually and reasonably incurred by him in
connection with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the Registrant, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful, and (ii) indemnify any
person who was or is a party or is threatened to be made a party to any
threatened, pending or completed action or suit by or in the right of the
Registrant to procure a judgment in its favor by reason of the fact that he is
or was a Director or officer of the Registrant, or is or was serving at the
request of the Registrant as a Director or officer of another corporation, or,
in the case of a Director or officer of the Registrant, is or was serving as an
employee or agent of a partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action or suit if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Registrant and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Registrant unless
and only to the extent that the Court of Chancery or the court in which such
action or suit was brought shall determine upon application that, despite the
adjudication of liability but in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expenses which
the Court of Chancery or such other court shall deem proper. Notwithstanding the
foregoing, the Registrant is not required to indemnify any Director or officer
of the Registrant in connection with a proceeding (or portion thereof) initiated
by such Director or officer against the Registrant or any Directors, officers or
employees thereof unless (i) the initiation of such proceeding (or portion
thereof) was authorized by the Board of Directors of the Registrant or (ii)
notwithstanding the lack of such authorization, the person seeking
indemnification is successful on the merits. The By-Laws further provide that
the indemnification provided therein shall not be deemed exclusive of any other
rights to which those seeking indemnification may be entitled.
Section 145 of the General Corporation Law of the State of Delaware
authorizes indemnification by the Registrant of Directors and officers under the
circumstances provided in the provisions of the By-Laws described above, and
requires such indemnification for expenses actually and reasonably incurred to
the extent a Director or officer is successful in the defense of any action, or
any claim, issue or matter therein.
The Registrant has purchased insurance which purports to insure the
Registrant against certain costs of indemnification which may be incurred by it
pursuant to the By-Laws and to insure the officers and Directors of the
Registrant, and of its subsidiary companies, against certain liabilities
incurred by them in the discharge of their functions as such officers and
directors except for liabilities resulting from their own malfeasance.
ITEM 7. EXEMPTIONS FROM REGISTRATION CLAIMED.
Not Applicable.
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<PAGE> 4
ITEM 8. EXHIBITS.
(a) The following is a list of Exhibits included as part of this
Registration Statement. The Registrant agrees to furnish supplementally a copy
of any omitted schedule to the SEC upon request. Items marked with an asterisk
are filed herewith.
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4.1 -- Restated Certificate of Incorporation of the Registrant,
dated June 12, 1997, incorporated by reference to Exhibit
No. 3a to the Corporation's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1997.
4.2 -- By-laws of the Registrant, as amended November 22, 1996,
are hereby incorporated by reference to Exhibit No. 4.2 to
the Registration Statement on Form S-8 of the Registrant
filed with the SEC on December 6, 1996 (Registration No.
333-17367).
4.3 -- Rights Agreement dated as of June 21, 1988, as amended
and restated as of June 8, 1995, between the Registrant and
The First National Bank of Boston, as Rights Agent, is
hereby incorporated by reference to Exhibit No. 1 to the
Registration Statement on Form 8-A/A of the Registrant
filed with the SEC on June 13, 1995.
4.4 -- Certificate of Adjustment, dated March 7, 1997, filed by
the Registrant with The First National Bank of Boston, as
Rights Agent, is hereby incorporated by reference to
Exhibit No. 2 to the Registration Statement on Form 8-A/A
of the Registrant filed with the SEC on March 17, 1997.
4.5* -- Kimberly-Clark Corporation Defined Contribution Plans
Trust.
4.6* -- Kimberly-Clark Corporation Salaried Employees Incentive
Investment Plan.
4.7* -- Kimberly-Clark Corporation Hourly Employees Incentive
Investment Plan.
4.8* -- Kimberly-Clark Corporation Retirement Contribution Plan.
23.1* -- Consent of Deloitte & Touche LLP.
23.2* -- Consent of Coopers & Lybrand
24* -- Powers of Attorney.
</TABLE>
(b) The Registrant will submit or has submitted the Salaried IIP, the
Hourly IIP and the RCP and any amendment thereto to the Internal Revenue Service
(the "IRS") in a timely manner, and has made or will make all changes required
by the IRS in order to qualify such Plans.
ITEM 9. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement; and notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the total
dollar value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the estimated
maximum offering range may be reflected in the form of prospectus filed
with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change
in the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement; and
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<PAGE> 5
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration statement
or any material change to such information in the registration
statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the registration statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
SEC by the Registrant pursuant to Section 13 or 15(d) of the Exchange Act
that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the SEC such
indemnification is against public policy as expressed in the Securities Act
and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
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<PAGE> 6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Irving, State of Texas, on January 2, 1998.
KIMBERLY-CLARK CORPORATION
By: /s/ WAYNE R. SANDERS
----------------------------------
Wayne R. Sanders
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
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/s/ WAYNE R. SANDERS Chairman of the Board and January 2, 1998
- - - ----------------------------------------------------- Chief Executive Officer and
Wayne R. Sanders Director (principal
executive officer)
/s/ JOHN W. DONEHOWER Senior Vice President and January 2, 1998
- - - ----------------------------------------------------- Chief Financial Officer
John W. Donehower (principal financial
officer)
/s/ RANDY J. VEST Vice President and Controller January 2, 1998
- - - ----------------------------------------------------- (principal accounting
Randy J. Vest officer)
</TABLE>
DIRECTORS
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* *
- - - ----------------------------------------------------- ----------------------------------------------
John F. Bergstrom Louis E. Levy
* *
- - - ----------------------------------------------------- ----------------------------------------------
Pastora San Juan Cafferty Frank A. McPherson
* *
- - - ----------------------------------------------------- ----------------------------------------------
Paul J. Collins Linda Johnson Rice
* *
- - - ----------------------------------------------------- ----------------------------------------------
Robert W. Decherd Wolfgang R. Schmitt
* *
- - - ----------------------------------------------------- ----------------------------------------------
William O. Fifield Randall L. Tobias
*
- - - -----------------------------------------------------
Claudio X. Gonzalez
January 2, 1998
*By: /s/ O. GEORGE EVERBACH
------------------------------------------
O. George Everbach
Attorney-in-Fact
</TABLE>
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<PAGE> 7
The Trust
Pursuant to the requirements of the Securities Act of 1933, as amended,
First Trust National Association, as Trustee of the Trust, has duly caused this
Registration Statement to be signed by the undersigned, thereunto duly
authorized, in the City of St. Paul, State of Minnesota, on the 2nd day of
January, 1998.
KIMBERLY-CLARK CORPORATION
DEFINED CONTRIBUTION PLANS TRUST
(The Trust)
By: /s/ JOAN M. HINNENKAMP
----------------------------------
Name: Joan M. Hinnenkamp
Title: Vice President
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<PAGE> 8
The Plans
Pursuant to the requirements of the Securities Act of 1933, as amended,
Kimberly-Clark Corporation, as Plan Administrator of the Plans, has duly caused
this Registration Statement to be signed by the undersigned, thereunto duly
authorized, in the City of Knoxville, State of Tennessee, on the 2nd day of
January, 1998.
KIMBERLY-CLARK CORPORATION
SALARIED EMPLOYEES
INCENTIVE INVESTMENT
PLAN
KIMBERLY-CLARK CORPORATION
HOURLY EMPLOYEES
INCENTIVE INVESTMENT
PLAN
KIMBERLY-CLARK CORPORATION
RETIREMENT CONTRIBUTION PLAN
(The Plans)
By: /s/ BRUCE J. OLSON
----------------------------------
Bruce J. Olson
Vice President -- Corporate
Services
Kimberly-Clark Corporation
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<PAGE> 9
EXHIBIT INDEX
The following is a list of Exhibits included as part of this Registration
Statement. Items marked with an asterisk are filed herewith.
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<CAPTION>
NO. DESCRIPTION OF EXHIBIT
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4.1 -- Restated Certificate of Incorporation of the Registrant,
dated June 12, 1997, incorporated by reference to Exhibit
No. 3a to the Corporation's Quarterly Report on Form 10-Q
for the quarter ended June 30, 1997.
4.2 -- By-laws of the Registrant, as amended November 22, 1996,
are hereby incorporated by reference to Exhibit No. 4.2
to the Registration Statement on Form S-8 of the
Registrant filed with the SEC on December 6, 1996
(Registration No. 333-17367).
4.3 -- Rights Agreement dated as of June 21, 1988, as amended
and restated as of June 8, 1995, between the Registrant
and The First National Bank of Boston, as Rights Agent,
is hereby incorporated by reference to Exhibit No. 1 to
the Registration Statement on Form 8-A/A of the
Registrant filed with the SEC on June 13, 1995.
4.4 -- Certificate of Adjustment, dated March 7, 1997, filed by
the Registrant with The First National Bank of Boston, as
Rights Agent, is hereby incorporated by reference to
Exhibit No. 2 to the Registration Statement on Form 8-A/A
of the Registrant filed with the SEC on March 17, 1997.
4.5* -- Kimberly-Clark Corporation Defined Contribution Plans
Trust.
4.6* -- Kimberly-Clark Corporation Salaried Employees Incentive
Investment Plan.
4.7* -- Kimberly-Clark Corporation Hourly Employees Incentive
Investment Plan.
4.8* -- Kimberly-Clark Corporation Retirement Contribution Plan.
23.1* -- Consent of Deloitte & Touche LLP.
23.2* -- Consent of Coopers & Lybrand.
24* -- Powers of Attorney.
</TABLE>
<PAGE> 1
EXHIBIT 4.5
KIMBERLY-CLARK CORPORATION DEFINED CONTRIBUTION PLANS TRUST
<PAGE> 2
KIMBERLY-CLARK CORPORATION
DEFINED CONTRIBUTION PLANS TRUST
THIS AGREEMENT, made as of October 1, 1996, by and between KIMBERLY-CLARK
CORPORATION, a Delaware corporation, with its principal offices at 351 Phelps
Drive, Irving, Texas 75038 (hereinafter referred to as the "Company"), and
FIRST TRUST NATIONAL ASSOCIATION, a Minnesota corporation, with its principal
offices at 180 East Fifth Street, Saint Paul, MN 55101 (hereinafter referred to
as the "Trustee"),
W I T N E S S E T H:
WHEREAS, the Company has adopted the Kimberly-Clark Corporation Salaried
Employees Incentive Investment Plan, the Kimberly-Clark Corporation Hourly
Employees Incentive Investment Plan, and the Kimberly-Clark Corporation
Retirement Contribution Plan (hereinafter referred to individually as the
"Salaried Plan," the "Hourly Plan," and the "Retirement Contribution Plan,
respectively, and collectively as the "Plans") for the exclusive benefit of
such of its eligible employees and eligible employees of its affiliates and
subsidiaries as become participants therein; and
WHEREAS, a Committee (hereinafter referred to as the "IIP Committee") has been
created to administer the Plans pursuant to the terms thereof; and
WHEREAS, the Kimberly-Clark Tissue Company Investment Plan for Salaried
Employees are merged into the Salaried Plan, and the Kimberly-Clark Tissue
Company Investment Plan for Hourly Employees are merged into the Hourly Plan,
as of January 1, 1998, and
WHEREAS, the Retirement Trust Committee of the Company (hereinafter referred to
as the "Retirement Trust Committee"), which shall be the named fiduciary for
the Plans, has the authority to direct the investment of assets held under the
Plans; and
WHEREAS, the Company has adopted the Kimberly-Clark Corporation Salaried
Employees Incentive Investment Plan Trust (the "Salaried Trust") to hold the
assets of the Salaried Plan and the Kimberly-Clark Corporation Hourly Employees
Incentive Investment Plan Trust (the "Hourly Trust") to hold the assets of the
Hourly Plan; and
WHEREAS, pursuant to delegation of authority from the Chief Executive Officer,
the Retirement Trust Committee appointed First Trust National Association as
successor trustee of the Salaried Trust and the Hourly Trust, effective July 1,
1996; and
WHEREAS, the Retirement Trust Committee, pursuant to delegation of authority
from the Chief Executive Officer of the Company, has determined that the
Salaried Trust and the Hourly Trust shall be merged into a master trust to
hold, collectively, the assets of the Salaried Plan and the Hourly Plan, with
First Trust National Association acting as trustee thereof, effective as of
October 1, 1996; and
WHEREAS, pursuant to the authority granted under the terms of the Retirement
Contribution Plan, the Chief Executive Officer has appointed First Trust
National Association to serve as
<PAGE> 3
Trustee of the Retirement Contribution Plan and has authorized the addition of
the Retirement Contribution Plan to the Trust Fund hereunder, effective January
1, 1997; and
WHEREAS, funds have been contributed and additional funds will from time to
time be contributed under the Plans, all of which funds, as and when received
by the Trustee, will constitute a trust fund to be held for the benefit of the
participants under the Plans or their beneficiaries; and
WHEREAS, the Company desires the Trustee to hold, administer, invest and
distribute such funds and the Trustee is willing to hold, manage, administer,
invest and distribute such funds pursuant to the terms of this Agreement;
NOW, THEREFORE, in consideration of the premises and of the mutual covenants
herein contained, the Company and the Trustee do hereby covenant and agree as
follows:
ARTICLE I
Trust Fund
All contributions and other property received by the Trustee in accordance with
the Plans, including the sums of money and other property transferred to the
Trustee, together with the income therefrom and any other increment thereon
(hereinafter referred to as the "Trust Fund") shall be held, managed,
administered, invested, and distributed by the Trustee pursuant to the terms of
this Agreement without distinction between principal and income and without
liability for the payment of interest thereon. The Trustee shall not be
responsible for the collection of any contributions to the Plans.
All transfers to, withdrawals from, and other transactions regarding the Trust
Fund shall be conducted in such a way that the proportionate interest in the
Trust Fund of each Plan and the fair market value of that interest may be
determined at any time. The undivided interest of each Plan shall be debited
or credited, as the case may be, for (i) the entire amount of all contributions
and loan repayments received on behalf of that Plan, all benefit payments, or
expenses attributable solely to that Plan; (ii) its proportionate share of each
item of income, gain or loss, and other expenses; and (ii) other transactions
attributable to the Trust Fund as a whole. As of each date for which the
reports specified in Article IX are provided by the Trustee, the Trustee shall
adjust the value of each Plan's undivided interest in the Trust Fund to reflect
the net increase or decrease in such values since the last such date.
ARTICLE II
Distributions and Participant Loans From Trust Fund
Subject to the provisions of Article III hereof, the Trustee shall from time to
time at the direction of the IIP Committee or the recordkeeper make
distributions and participant loans out of the Trust Fund to such persons,
including the IIP Committee or any member thereof, in such manner, in such
amounts and for such purposes as may be specified in the direction of the IIP
Committee or the recordkeeper, in accordance with those specifications as may
be mutually agreed upon by the Company and the Trustee. All promissory notes
evidencing participant
2
<PAGE> 4
loans from the Plans shall constitute assets of the Trust Fund and shall be
held by the Trustee in a separate fund for such participant loans. The IIP
Committee or the recordkeeper shall provide the Trustee with such information
as may from time to time be required for the Trustee to exercise its rights
under the documents evidencing such participant loans, including but not
limited to the occurrence of events of default.
The Trustee shall deduct, withhold and transmit to the proper taxing
authorities any such federal and state tax which it may be permitted or
required to deduct and withhold in accordance with applicable laws, and the
Plan account to be distributed or from which the loan is made in such case
shall be correspondingly reduced. The Trustee shall prepare all necessary
federal and state tax reporting required on any distribution or participant
loan from the Fund, and shall reconcile all federal and state tax withholdings
with each Plan's records, provided that the recordkeeper shall be responsible
for preparing, filing, and furnishing to participants all federal and state tax
statements (i.e., IRS Form 1099-R or other similar tax form) required on any
distribution or participant loan from the Fund, unless otherwise agreed upon in
writing by the parties.
If any payment of benefits directed to be made from the Trust Fund by the
Trustee is not claimed, the Trustee shall notify the Company of that fact
promptly as mutually agreed upon by the Company and the Trustee. The Trustee
shall dispose of such payments as the IIP Committee shall direct. The Trustee
shall not be liable for any payment made by it in good faith without actual
knowledge of the changed status or condition of any recipient thereof.
ARTICLE III
Diversion of Trust Fund
Notwithstanding anything to the contrary contained in this Agreement, or in any
amendment hereto, it shall be impossible for any part of the Trust Fund, other
than such part as is required to pay taxes and administration expenses, to be
used for, or diverted to, purposes other than for the exclusive benefit of the
participants under the Plans or their beneficiaries.
In making a distribution upon a direction as authorized herein, the Trustee may
accept such direction as a certification that such payment complies with the
provisions of this Article and need make no further investigation.
ARTICLE IV
Investment of Trust Fund
Subject to the restrictions set forth in the following paragraphs, the Trustee
shall, in its sole discretion, invest and reinvest the Trust Fund in any
securities or other property or part interest therein, wherever situated,
including specifically obligations or stock of the Company. Such investments
shall not be restricted to property and securities of the character authorized
for investment by trustees under any present or future state laws.
3
<PAGE> 5
The Trust Fund shall consist of ten investment funds: the Money Market Fund,
the Stable Income Fund, the Bond Index Fund, the Medium-Term Managed Fund, the
Long-Term Managed Fund, the Stock Index Fund, the Growth Stock Fund, the
International Index Fund, the K-C Stock Fund, and the SMI Stock Fund. The SMI
Stock Fund shall not apply under the Retirement Contribution Plan.
Money Market Fund
Funds designated by the IIP Committee pursuant to Participant direction for
investment in the Money Market Fund shall be invested at the direction of the
Retirement Trust Committee or the Investment Manager appointed pursuant to
Article VI, directly or through a common or collective trust fund, mutual fund,
or other similar investment facility, in short-term obligations issued or fully
guaranteed as to the payment of principal and interest by the United States of
America or any agency or instrumentality thereof.
Stable Income Fund
Funds designated by the IIP Committee pursuant to Participant direction for
investment in the Stable Income Fund shall be invested at the direction of the
Retirement Trust Committee or the Investment Manager appointed pursuant to
Article VI, directly or through a common or collective trust fund, mutual fund,
or other similar investment facility, in investment contracts issued by legal
reserve life insurance companies, banks, or other financial institutions;
individual or group annuity contracts or insurance policies issued by legal
reserve life insurance companies; money market securities; or any combination
thereof.
Bond Index Fund
Funds designated by the IIP Committee pursuant to Participant direction for
investment in the Bond Index Fund shall be invested at the direction of the
Retirement Trust Committee or the Investment Manager appointed pursuant to
Article VI, directly or through a common or collective trust fund, mutual fund,
or other similar investment facility, in obligations issued or fully guaranteed
as to the payment of principal and interest by the United States of America or
any agency or instrumentality thereof, investment grade bonds issued by one or
more corporations domiciled in the United States, asset-backed securities,
mortgage-backed securities, and other similar securities, with the objective to
track the Lehman Brothers Aggregate Bond Index, an unmanaged broad-based index
which is designed to reflect the composition of the United States bond market
and which includes most intermediate and long-term fixed rate bonds in the
United States, or such other similar bond index as may be selected by the
Retirement Trust Committee from time to time.
Medium-Term Managed Fund
Funds designated by the IIP Committee pursuant to Participant direction for
investment in the Medium-Term Managed Fund shall be invested at the direction
of the Retirement Trust Committee or the Investment Manager appointed pursuant
to Article VI, directly or through a common or collective trust fund, mutual
fund, or other similar investment facility, in investments in which the Money
Market Fund or Bond Index Fund could invest, as well as a diversified portfolio
of common and preferred stocks of corporations and other issues convertible
into such common and preferred stocks, which may include growth and income,
growth, and/or emerging growth stocks, consistent with the medium-term
investment horizon of the fund.
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Long-Term Managed Fund
Funds designated by the IIP Committee pursuant to Participant direction for
investment in the Long-Term Managed Fund shall be invested at the direction of
the Retirement Trust Committee or the Investment Manager appointed pursuant to
Article VI, directly or through a common or collective trust fund, mutual fund,
or other similar investment facility, in investments in which the Bond Index
Fund could invest and money market securities, as well as a diversified
portfolio of common and preferred stocks of corporations and other issues
convertible into such common and preferred stocks, which may include growth and
income, growth, emerging growth, and/or international stocks, consistent with
the long-term investment horizon of the fund.
Stock Index Fund
Funds designated by the IIP Committee pursuant to Participant direction for
investment in the Stock Index Fund shall be invested at the direction of the
Retirement Trust Committee or the Investment Manager appointed pursuant to
Article VI, directly or through a common or collective trust fund, mutual fund,
or other similar investment facility, in a diversified portfolio of common and
preferred stocks of corporations and other issues convertible into such common
and preferred stocks, with the objective to track the Standard & Poors (S&P)
500 Stock Index, an unmanaged index which tracks the performance of 500
industrial, transportation, utility, and financial companies whose stocks are
public traded, or such other similar stock index as may be selected by the
Retirement Trust Committee from time to time.
Growth Stock Fund
Funds designated by the IIP Committee pursuant to Participant direction for
investment in the Growth Stock Fund shall be invested at the direction of the
Retirement Trust Committee or the Investment Manager appointed pursuant to
Article VI, directly or through a common or collective trust fund, mutual fund,
or other similar investment facility, in common and preferred stocks of medium
to large corporations and other issues convertible into such common and
preferred stocks, which may include securities identified as having above
average growth potential, and in money market securities.
International Index Fund
Funds designated by the IIP Committee pursuant to Participant direction for
investment in the International Index Fund shall be invested at the direction
of the Retirement Trust Committee or the Investment Manager appointed pursuant
to Article VI, directly or through a common or collective trust fund, mutual
fund, or other similar investment facility, in common and preferred stocks of
corporations in Europe, Australia, and the Far East, and other issues
convertible into such common and preferred stocks, with the objective to track
the Morgan Stanley Capital International EAFE Index, an unmanaged market-value
weighted index of about 1,000 stocks from Europe, Australia, New Zealand, and
the Far East, or such other similar international index as may be selected by
the Retirement Trust Committee from time to time.
K-C Stock Fund
Funds designated by the IIP Committee pursuant to Participant direction for
investment in the K-C Stock Fund, shall be invested in common stock of the
Company, although such may not
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be a legal investment for trustees under state laws applicable hereto, and
short term securities and other similar investments for liquidity. Such stock
shall be acquired by the Trustee in the open market, or from private sources
(other than officers or directors of the Company); whether to acquire such
shares in the open market or to acquire such shares from private sources and
the time and prices and the quantities to be acquired shall be within the sole
discretion of the Trustee. The Trustee may also acquire such shares through
withdrawals, distributions and forfeitures under the Plans, or contributions
of shares from participants (including officers and directors) or the Company
under the Plan; provided, however, that any shares contributed by the Company
shall be from shares held in the treasury of the Company. With respect to the
K-C Stock Fund, the Trustee shall exercise or sell any rights to purchase
shares of common stock of the Company only as directed by the Retirement Trust
Committee. The Trustee shall manage the liquidity of the K-C Stock Fund
consistent with guidelines established by the Retirement Trust Committee and
communicated to the Trustee.
SMI Stock Fund
Funds may be designated by the IIP Committee for investment by the Trustee in
the SMI Stock Fund, subject to the terms and conditions set forth herein. The
SMI Stock Fund shall consist of shares of the common stock of
Schweitzer-Mauduit International, Inc., a Delaware corporation ("SMI"),
distributed to the Plans in connection with the pro rata distribution of 100
percent of the outstanding shares of SMI stock to each holder of record of
Company stock on or about November 30, 1995, and such additional shares of SMI
stock acquired by the Trustee through dividends or stock splits declared by
SMI, as well as short term securities and other similar investments for
liquidity. No contributions shall be invested by the Trustee in the SMI Stock
Fund, and no transfers shall be made by the Trustee to the SMI Stock Fund,
unless otherwise directed by the Retirement Trust Committee. Forfeitures under
the Plans with respect to amounts invested in the SMI Stock Fund shall be
invested in the K-C Stock Fund, unless otherwise directed by the Retirement
Trust Committee. To the extent that it becomes necessary to purchase
additional shares of SMI stock to be held in the SMI Stock Fund (e.g., through
reinvestment of interest, dividends or other income or cash received from the
sale of exchange of securities or other property with respect to the SMI Stock
Fund), the Trustee is directed to acquire such stock in the open market, or
from private sources (other than officers or directors of the Company); whether
to acquire such shares in the open market or to acquire such shares from
private sources and the time and prices and the quantities to be acquired shall
be within the sole discretion of the Trustee. The Trustee may also acquire
such shares through withdrawals and distributions under the Plans. The
Trustee shall manage the liquidity of the SMI Stock Funds consistent with
guidelines established by the Retirement Trust Committee and communicated to
the Trustee.
Any monies of the investment funds comprising the Trust Fund may, to facilitate
investment, transfers or distributions hereunder, be invested in short term
securities or in other investments commonly referred to as short-term
investment funds or facilities ("STIF").
The Company shall notify the Trustee of contributions designated for investment
in each of the above investment Funds in accordance with procedures and within
the time periods mutually agreed upon by the Company and the Trustee, and the
Trustee shall notify the Investment Managers of such contributions in
accordance with procedures and within the time periods
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established by the Investment Manager or as mutually agreed upon by the Trustee
and the Investment Manager. The Company shall transfer such contributions to
the Trustee, and the Trustee shall transmit such contributions to the
Investment Managers for investment, in accordance with procedures and within
the time periods mutually agreed upon by the Company and the Trustee, and as
established by the Investment Manager or as mutually agreed upon by the Trustee
and the Investment Manager. It is contemplated that the Trustee will transmit
funds to the Investment Managers for investment on the same business day of
receipt of such funds from the Company, provided that the Company transfers
such funds to the Trustee within the time period mutually agreed upon by the
Company and the Trustee.
The Trustee is further authorized to hold, for the purpose of administration or
distribution thereof, a portion of the Trust Fund uninvested whenever and for
so long as is required for the payment in cash of Plans accounts normally
expected to mature in the near future; to hold uninvested reasonable amounts of
cash whenever it is deemed advisable to do so to facilitate disbursements,
pending investments or for other operational reasons; and to deposit the same,
without any liability for interest earned thereon, in the banking department of
any corporate Trustee serving hereunder or of any other bank, trust company or
other financial institution including those affiliated in ownership with the
Trustee, notwithstanding the banking department's or other affiliate's receipt
of "float" from such uninvested cash.
All interest, dividends or other income as well as any cash received from the
sale or exchange of securities or other property, produced by each such
investment fund shall be reinvested in the same investment fund which produced
such interest, dividends and other income.
The Trustee shall make transfers among the investment funds in accordance with
the directions of the IIP Committee pursuant to participant direction and may
dispose of such investments in any of the investment funds as may be necessary
to enable it to make any such transfers.
The Retirement Trust Committee shall have the authority to terminate an
investment Fund, to direct that an investment Fund be established, to appoint
or terminate the Investment Manager for a fund pursuant to Article VI hereof,
to withdraw or limit participation in a particular investment Fund, and to
consolidate any separate investment Fund with any other separate investment
Fund having the same investment objectives which are established under any
other retirement plan or trust of the Company or its affiliates and which are
managed by the same Investment Manager, provided that the records of the
Trustee shall reflect the relative interests of the separate trusts in such
commingled fund.
ARTICLE V
Powers and Authority of Trustee
Subject to the provisions set forth in Article IV, this Article V, and Article
VI, the Trustee shall have full power and authority in its sole discretion, to
do all acts and to exercise any and all
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<PAGE> 9
powers which would be lawful for it were it in its own right the actual owner
of the Trust Fund, including by way of illustration, but not limitation, the
following:
5.1 To purchase or subscribe for any securities or other property and to
retain in trust such securities or other property, including but not limited to
securities of the Company which are "qualifying employer securities" within the
meaning of section 407(d)(5) of the Employee Retirement Income Security Act of
1974, as amended from time to time ("ERISA"), which are held in the K-C Stock
Fund;
5.2 To sell for cash or on credit, to grant options, convert, redeem, exchange
for other securities or other property, or otherwise to dispose of any
securities or other property at any time held by it.
5.3 To settle, compromise or submit to arbitration, any claims, debts or
damages, due or owing to or from the Trust, to commence or defend suits or
legal proceedings and to represent the Trust in all suits or legal proceedings,
provided that the Trustee shall be indemnified against all reasonable expenses
and liabilities sustained by it by reason thereof (including reasonable
attorneys' fees).
5.4 To exercise any conversion privileges and/or subscription right available
in connection with any securities or other property at any time held by it; to
oppose or to consent to the reorganization, consolidation, merger, or
readjustment of the finances of any corporation, company or association or to
the sale, mortgage, pledge or lease of the property of any corporation, company
or association any of the securities of which may at any time be held by it and
to do any act with reference thereto, including the exercise of options, the
making of agreements or subscriptions and the payment of expenses, assessments
or subscriptions, which may be deemed necessary or advisable in connection
therewith, and to hold and retain any securities or other property which it may
so acquire.
5.5 To enter into a line of credit or establish a credit facility with, or
borrow money from, any lender in such amounts and upon such terms and
conditions as shall be deemed advisable or proper to carry out the purposes of
the Trust, and to pledge any securities or other property for the repayment of
such loan.
5.6 To employ suitable agents, experts and counsel (which may be counsel to
the Company) and to pay their reasonable expenses and compensation in
accordance with the provisions of Article VII. The Trustee may act in reliance
upon the advice, opinions, records, statements, and computations of any agents,
experts and counsel, and shall be fully protected in relying in good faith on
such advice, opinions, records, statements and computations, except to the
extent provided otherwise under ERISA.
5.7 To register any securities held by it hereunder in its own name or in the
name of a nominee with or without the addition of words indicating that such
securities are held in a fiduciary capacity and to hold any securities in
bearer form.
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5.8 To form corporations and to create trusts to hold title to any securities
or other property, all upon such terms and conditions as may be deemed
advisable.
5.9 To make, execute and deliver, as Trustee, any and all deeds, leases,
mortgages, conveyances, contracts, waivers, releases or other instruments in
writing necessary or proper for the accomplishment of any of the foregoing
powers.
5.10 Except as provided in Sections 5.13 and 5.14, to exercise, personally or
by general or by limited power of attorney, any right, including the right to
vote, appurtenant to any securities or other property held by it at any time.
5.11 Only when and if so directed by the Retirement Trust Committee or the
Investment Manager appointed pursuant to Article VI, to purchase from legal
reserve life insurance companies individual and group annuity contracts and
insurance policies of such kind and in such amount as the Retirement Trust
Committee or the Investment Manager in its discretion may deem proper for the
purposes of the Stable Income Fund, and to use funds of the Stable Income Fund
to maintain such contracts and policies in force. Title to and all rights and
privileges under such annuity contracts and insurance policies shall be vested
in the Trustee. The Trustee shall have no duty to inquire into the terms and
provisions of any such annuity contracts and insurance policies purchased by it
upon the direction of the Retirement Trust Committee or the Investment Manager.
5.12 To transfer, at any time and from time to time, such part or all of the
investments Funds designated in Article IV to any trust which is invested in
property of the kind specified for the respective investment funds, and which
is qualified under Section 401(a) and exempt from tax under Section 501(a) of
the Internal Revenue Code of 1986, as amended from time to time (the "Code"),
maintained as a medium for the collective investment of funds of pension,
profit sharing or other employee benefit trusts, whether maintained by the
Trustee or any Investment Manager, including but not limited to (i) THE PLANS
AND DECLARATION OF TRUST - FIRST TRUST NATIONAL ASSOCIATION COLLECTIVE AND
POOLED INVESTMENT FUNDS FOR EMPLOYEE BENEFIT TRUSTS, (ii) 1995 AMENDED AND
RESTATED DECLARATION OF TRUST - AMERICAN EXPRESS TRUST COLLECTIVE INVESTMENT
FUNDS FOR EMPLOYEE BENEFIT TRUSTS, and (iii) such collective investment trust
maintained by BARCLAYS GLOBAL INVESTORS, N.A., as amended from time to time,
and to withdraw any part or all of the Trust Fund so transferred. The
provisions of any such declaration of trust shall be deemed to be a part of
this Agreement.
5.13 The Trustee shall vote the common stock of SMI held by the Trustee in the
SMI Stock Fund. The Trustee shall also respond to a tender or exchange offer
for any or all shares of SMI stock held by the Trustee in the SMI Stock Fund.
5.14 The Trustee shall vote the common stock of the Company held in the K-C
Stock Fund, only in accordance with the directions of the IIP Committee. In
the event that the IIP Committee informs the Trustee in writing that it is not
able to direct the Trustee as to the voting of any non-directed shares of
common stock of the Company held in the K-C Stock Fund for
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which direction has not been received from participants for any reason, then
the Trustee shall vote such shares in the same manner and proportion as the
shares of common stock of the Company with respect to which it received
direction from participants. Each participant under the Plans (or in the
event of his death, his beneficiary) shall have the right to direct the Trustee
in writing how to respond to a tender or exchange offer for any or all whole
shares of common stock of the Company held by the Trustee and attributable to
his accounts in the K-C Stock Fund as of the last day of the month preceding
such offer. The IIP Committee shall notify each participant (or beneficiary)
and exert its best efforts to timely distribute or cause to be distributed to
him such information as will be distributed to stockholders of the Company in
connection with any such tender or exchange offer. Upon timely receipt of such
instructions, the Trustee shall tender such shares of common stock of the
Company as and to the extent so instructed. If the Trustee shall not receive
instructions from a participant (or beneficiary) regarding any such tender or
exchange offer for such shares of common stock of the Company, such participant
or beneficiary shall be deemed to have timely instructed the Trustee not to
tender or exchange such shares, and the Trustee shall have no discretion in
such matter and shall take no action with respect thereto. With respect to
shares of common stock of the Company in the K-C Stock Fund for which the
Trustee is not subject to receiving such instruction, whether because such
shares are unallocated or as otherwise provided by the Plans or by law, the
Trustee shall tender such shares in the same ratio as the number of shares for
which it receives instructions to tender bears to the total number of shares
for which it is subject to receiving instructions, and shall have no discretion
in such matter and shall take no action with respect thereto other than as
specifically provided in this sentence. The instructions received by the
Trustee from participants shall be held by the Trustee in strict confidence and
shall not be divulged or released to any person, including employees, officers
and directors of the Company; provided, however, that to the extent necessary
for the operation of the Plans, such instructions may be released by the
Trustee to a recordkeeper, auditor or other person providing services to the
Plans.
The Trustee in the acquisition, disposition and management of investments for
or under the Trust may acquire and hold any securities or other property even
though the Trustee, in its individual or any other capacity, shall have
invested or may thereafter invest, its own or other funds in the same or
related securities or other property, the interest, principal or other avails
of which may be payable at different rates or different times or may have a
different rank or priority; and may acquire and hold any securities or other
property even though in connection therewith the Trustee, in its individual or
any other capacity, may receive compensation reasonably and customarily due in
the course of its regular activities; and may make investments even though the
proceeds thereof may directly or indirectly be used to pay off loans made by
the Trustee in its individual capacity.
ARTICLE VI
Company Directed or Investment Manager Accounts
Notwithstanding anything in this Agreement to the contrary, the Retirement
Trust Committee or any Investment Manager appointed by the Retirement Trust
Committee shall have the right from time to time to direct the Trustee with
respect to the acquisition, retention, management
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and disposition of the assets from time to time comprising the Trust Fund (such
assets so acquired to be referred to as the "Company Directed" or "Investment
Manager Accounts"). The Trustee shall follow all such directions of the
Retirement Trust Committee or any Investment Manager appointed by the
Retirement Trust Committee and shall have no duty or obligation to review the
assets from time to time so acquired, nor to make any recommendations with
respect to the investment, reinvestment or retention thereof. Except as
otherwise provided in section 5.13 and 5.14 of Article V of this Agreement, the
Trustee shall vote the proxies thereon as directed by the Retirement Trust
Committee for Company Directed Accounts or any Investment Manager appointed by
the Retirement Trust Committee for Investment Manager Accounts. With respect
to Company Directed or Investment Manager Accounts, the Trustee shall have no
liability to the Company, administrative committee or other authorized person,
or any Participant or Beneficiary under the Trust for acting without question
on the direction of, or for failure to act in the absence of directions from,
the Retirement Trust Committee or any Investment Manager appointed by the
Retirement Trust Committee, as applicable. The Trustee shall be indemnified
and held harmless from and against any and all liability or expense to which
the Trustee shall be subjected by reason of carrying out any directions of the
Retirement Trust Committee or any Investment Manager appointed by the
Retirement Trust Committee made pursuant to this paragraph, including all
expenses reasonably incurred in its defense if the Company fails to provide
such defense.
Notwithstanding the foregoing provisions, the Trustee, at the direction of the
Retirement Trust Committee or the Investment Manager appointed by the
Retirement Trust Committee, shall have the power, right and authority to invest
cash balances held by it from time to time which are part of the funds managed
by the Retirement Trust Committee or any Investment Manager appointed by the
Retirement Trust Committee in investments commonly referred to as short-term
investment funds of facilities ("STIF"), and the Trustee, without prior
approval or direction, shall have the power, right and authority to sell such
short-term investments as may be necessary to carry out the instructions of the
Retirement Trust Committee or any Investment Manager appointed by the
Retirement Trust Committee with respect to investing the funds managed by the
Retirement Trust Committee or any Investment Manager appointed by the
Retirement Trust Committee. In addition, pending receipt of the directions
from the Retirement Trust Committee, or any Investment Manager appointed by the
Retirement Trust Committee, reasonable amounts of cash received by the Trustee
may be retained by the Trustee, in its discretion, in cash, without any
liability for interest for any funds managed by the Retirement Trust Committee
or any Investment Manager appointed by the Retirement Trust Committee.
ARTICLE VII
Taxes and Expenses of Administration
The expenses incurred by the Trustee in the performance of its duties,
including fees for legal services rendered to the Trustee and other expenses
described in Section 5.6 hereof, such compensation to the Trustee as may be
agreed upon in writing from time to time between the Company and the Trustee
and all other proper charges and disbursements of the Trustee, shall be paid
from the Trust Fund in accordance with procedures as are mutually agreed upon
by the Company and the Trustee, unless paid by the Company and until so paid
shall constitute a charge upon the Fund. Brokerage fees and other direct costs
of investment shall
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be paid by the Trustee out of the Fund to which such costs are attributable.
All taxes of any and all kinds whatsoever, including interest and penalties,
that may be levied or assessed under existing or future laws upon or in respect
of any of the Funds or the income thereof shall be paid from the respective
Fund.
Notwithstanding the provisions of Article II hereof, all payments under this
Article VII may be made without the approval or direction of the IIP Committee.
ARTICLE VIII
Valuation of Accounts
The Trustee shall value each investment Fund as of the close of each business
day (the "Valuation Date"), which valuation shall reflect the then fair market
value of the assets comprising such investment Fund (including income
accumulations therein). A "business day" shall mean a day in which securities
are traded on the New York Stock Exchange. In making such valuations, the
Trustee may rely on information supplied by any Investment Manager having
investment responsibility over the particular investment Fund, provided however
that the Trustee shall be responsible for valuing the K-C Stock Fund and the
SMI Stock Fund. The Trustee shall adjust those values provided by each
Investment Manager in accordance with procedures which have been mutually
agreed upon by the Company and the Trustee to include those Plan expenses
(exclusive of investment management and brokerage fees which are applied by the
Investment Manager appointed pursuant to Article VI) which are to be charged to
the Trust, if any, as designated by the Company, and taking into account any
revenue sharing amounts applicable to an investment Fund. The Trustee shall
timely transmit the value of each investment Fund on each Valuation Date to the
Company and the recordkeeper. The Trustee shall promptly notify the Company
and the Plan's recordkeeper of any error which shall have occurred in the
valuation of an investment Fund (regardless of whether such error may be
considered material) and, upon notice to the Company, shall promptly correct
such error in accordance with procedures which have been mutually agreed upon
by the Trustee and the Company.
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ARTICLE IX
Accounts of the Trustee
The Trustee shall keep accurate and detailed accounts of all investments,
receipts, disbursements and other transactions hereunder and such other records
as the Company shall from time to time direct, and all accounts, books, and
records relating thereto shall be open to inspection and audit at all
reasonable times by any person designated by the Retirement Trust Committee or
the Company. The Trustee shall file with the Retirement Trust Committee, the
Company, and the Plan's recordkeeper from time to time such reports as may be
required for the administration of the Plans. No person other than the Company
or the Retirement Trust Committee may require an accounting.
ARTICLE X
Reliance on Certificates; Liability of Trustee
The Trustee shall be fully protected in relying upon a certification of the
Retirement Trust Committee with respect to any instruction, direction or
approval of the Retirement Trust Committee, and upon a certification by a
member of the IIP Committee with respect to any instruction, direction or
approval of the IIP Committee, and protected also in relying upon a
certification of the Company as to the membership of the Retirement Trust
Committee or the IIP Committee as it then exists and as to the authority of any
person authorized to act for the Retirement Trust Committee or the IIP
Committee, and in continuing to rely upon such certification until a subsequent
certification is filed with the Trustee.
The Trustee shall be fully protected in acting upon any instrument,
certificate, or paper believed by it to be genuine and to be signed or
presented by the Retirement Trust Committee or the IIP Committee or any person
or entity designated in writing by the Retirement Trust Committee or the IIP
Committee, and the Trustee shall be under no duty to make any investigation or
inquiry as to any statement contained in any such writing but may accept the
same as conclusive evidence of the truth and accuracy of the statements therein
contained.
The Trustee shall not be responsible for the proper application of any part of
the Trust Fund if distributions are made in accordance with the written
directions of the IIP Committee as herein provided, shall not be under any duty
to make inquiries as to whether any distribution directed by the IIP Committee
is made pursuant to the provisions of the Plans, and shall not be responsible
for the adequacy of the Trust Fund to meet and discharge any and all
distributions and liabilities under the Plans. All persons dealing with the
Trustee are released from inquiry into the decision or authority of the Trustee
and from seeing to the application of any moneys, securities or other property
paid or delivered to the Trustee.
No Trustee, or member of the Retirement Trust Committee or member of the IIP
Committee shall be liable hereunder except for his or its failure to exercise
the care, skill, prudence, and diligence under the circumstances then
prevailing that a prudent man acting in a like capacity and familiar with such
matters would use in the conduct of an enterprise of a like character and
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with like aims. Nothing contained herein shall preclude any member of the
Retirement Trust Committee or any member of the IIP Committee from any
indemnification to which he, they or it may be entitled under the Company's
By-Laws or otherwise. No Trustee shall be or become liable for any act or
omission of a prior Trustee serving hereunder, it being the purpose and intent
that each Trustee shall be liable only for the Trustee's own acts or omissions
during the Trustee's term of service as Trustee hereunder, except to the extent
that liability is imposed under ERISA.
Except as prohibited by law, the Trustee shall be held harmless and indemnified
by the Company from and against any and all liabilities, costs, and expenses
(including legal fees reasonably incurred by the Trustee in its defense)
arising out of any action taken by such Trustee with respect to the Plans or
the Fund in carrying out any direction of the Company, the Retirement Trust
Committee, the IIP Committee, or other authorized person made in accordance
with this Agreement, provided that the Trustee has used reasonable care in
carrying out such direction. This indemnification shall continue as to the
Trustee after such Trustee ceases to be a Trustee.
The Trustee shall take any and all actions necessary and appropriate to correct
any error with respect to the Fund promptly upon discovery or notification of
such error, including but not limited to, reimbursement of the Fund or the
Company for the cost of correcting such error where the error is caused by the
Trustee's failure to use reasonable care in the performance of its duties under
this Agreement and under procedures mutually agreed upon by the Company and the
Trustee under this Agreement. The Trustee shall use reasonable diligence to
identify any errors with respect to the Fund and shall promptly notify the
Company and the Plan's recordkeeper of such error (regardless of whether the
error might be considered material).
ARTICLE XI
Trustee: Removal, Resignation, Successor, etc.
The Trustee may be removed by the Chief Executive Officer of the Company at any
time upon thirty days' notice in writing to the Trustee and the Company,
provided that the Trustee may agree to a shorter period. The Trustee may
resign at any time upon sixty days' notice in writing to the Company and the
IIP Committee, provided that the Company and the Retirement Trust Committee may
agree to a shorter period. Upon such removal or resignation of the Trustee,
the Chief Executive Officer of the Company shall appoint a successor trustee or
trustees and, upon acceptance of such appointment by the successor trustee or
trustees, the Trustee shall assign, transfer, pay over and deliver to such
successor trustee or trustees the funds and properties then constituting the
Trust Fund.
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ARTICLE XII
Amendments
Subject to the first paragraph of Article III, this Agreement may be amended by
the Board of Directors of the Company or the Retirement Trust Committee at any
time or from time to time and in any manner, and the provisions of any such
amendment may be made applicable to the Trust Fund as constituted at the time
of the amendment as well as to the part of the Trust Fund subsequently
acquired; provided, however, that no such amendment shall increase the duties
or change the compensation of the Trustee without its consent. Any such
amendment shall be by a written instrument delivered to the Trustee.
Any action permitted to be taken by the Board of Directors of the Company or
the Retirement Trust Committee under the foregoing provision may be taken by
the IIP Committee if such action
(1) is required by law, or
(2) is required by an action of the IIP Committee pursuant to the
Plans, or
(3) is estimated not to increase the annual cost of the Plans by
more than the amounts set forth in the Plans.
Any action taken by the Board or IIP Committee shall be made by or pursuant to
a resolution duly adopted by the Board or IIP Committee and shall be evidenced
by such resolution or by a written instrument executed by such persons as the
Board or IIP Committee shall authorize for such purpose.
The IIP Committee shall report to the Chief Executive Officer of the Company by
January 31 of each year all action taken by it hereunder during the preceding
calendar year.
ARTICLE XIII
Termination
This Agreement and the Trust created hereby may be terminated at any time by
the Board of Directors of the Company or the Retirement Trust Committee and
upon such termination or upon the dissolution or liquidation of the Company, or
in the event that a successor to the Company by operation of law or by the
acquisition of its business interests shall not elect to continue the Plans and
this Trust, or a successor Trust, the Trust Fund shall be paid out by the
Trustee as and when directed by the IIP Committee in accordance with the
provisions of Article II hereof. Upon termination of this Trust the Trustee
shall first reserve such reasonable amount as it may deem necessary to provide
for the payment of any expenses or fees then or thereafter chargeable against
the Trust Fund.
15
<PAGE> 17
ARTICLE XIV
Governing Law; Interpretation
To the extent not prevented by law, this Agreement and the Trust created hereby
shall be construed, regulated and administered under the laws of the State of
Minnesota. The Trustee may at any time initiate an action or proceedings for
the settlement of its accounts or for the determination of any questions of
construction which may arise or for instructions, and the only necessary
parties defendant to such action shall be the Company and the IIP Committee,
except that the Trustee may, if it so elects, bring in as parties defendant any
other person or persons.
Whenever appropriate, words used herein in the singular may be read in the
plural, or words used herein in the plural may be read in the singular; the
masculine may include the feminine; and the words "hereof," "herein" or
"hereunder" or other similar compounds of the word "here" shall mean and refer
to the entire Agreement and not to any particular paragraph or section of this
Agreement unless the context clearly indicates to the contrary. The titles
given to the various sections of this Agreement are inserted for convenience of
reference only and are not part of this Agreement, and they shall not be
considered in determining the purpose, meaning or intent of any provision
hereof. Any reference in this Agreement to a statute or regulation shall be
considered also to mean and refer to any subsequent amendment or replacement of
that statute or regulation.
ARTICLE XV
Segregation of Trust Fund
Any company which is a subsidiary of the Company may, with the approval of the
Board of Directors of the Company by resolution of its own Board of Directors
adopt the Trust if such subsidiary shall have adopted the Plans.
Any such subsidiary may at any time segregate from further participation in the
Trust under this Trust Agreement. Such subsidiary shall file with the Trustee
a document evidencing its segregation from the Trust Fund and its continuance
of a trust in accordance with the provisions of the Trust Agreement as though
such subsidiary were the sole creator thereof. In such event, the Trustee
shall deliver to itself as Trustee of such Trust such part of the Trust Fund as
may be determined by the IIP Committee to constitute the appropriate share of
the Trust Fund then held in respect of the participating members of such
subsidiary. Such former subsidiary may thereafter exercise in respect of such
Trust Agreement all the rights and powers reserved to the Company, to the
Retirement Trust Committee and to the IIP Committee under the provisions of
this Trust Agreement.
In a similar manner, the appropriate share of the Trust Fund determined by the
IIP Committee to be then held in respect of employees in any division, plant,
location or other identifiable group or unit of the Company or of any
subsidiary may be segregated, and the Trustee shall hold such segregated assets
in the same manner and for the same purpose as provided
16
<PAGE> 18
above in the event of segregation of a subsidiary and the Company or any
successor owner of the segregated unit shall have the rights hereinabove
provided for a segregated subsidiary.
The Trustee may, as directed by the IIP Committee, transfer such assets and
liabilities of the Trust as determined by the IIP Committee relating to a
division, plant, location or other identifiable group or unit of the Company or
of any subsidiary, to a trust which is exempt from tax under Section 501(a) of
the Code, as constituting a part of a plan intended to qualify under Section
401(a) of the Code.
ARTICLE XVI
Name of Trust
This Trust shall be known as the "Kimberly-Clark Corporation Defined
Contribution Plans Trust."
ARTICLE XVII
Miscellaneous
Any action required or permitted to be taken hereunder by the Board of
Directors of the Company may be taken by the Compensation Committee of the
Board of Directors or any other duly authorized committee of the Board of
Directors designated under the By-Laws of the Company. Any action required or
permitted to be taken hereunder by the Company may be taken by any officer of
the Company. The Trust is intended to be tax exempt under Section 501(a) as
constituting a part of a plan intended to qualify under Section 401(a)
respectively, of the Code, and to satisfy the requirements of the ERISA, as
these laws may be amended from time to time. Until advised otherwise, the
Trustee may conclusively assume that the Plans is qualified under Section
401(a) of the Code, and that this Trust is exempt from federal income tax.
Neither the creation of this Trust nor anything contained in this Agreement
shall be construed as giving any person entitled to benefits hereunder or other
employee of the Company any equity or other interest in the Trust Fund or in
the assets, business, or affairs of the Company.
Neither the Trustee, the Retirement Trust Committee, the IIP Committee, the
Company, nor any of its officers, employees, agents, or members of the Board of
Directors in any way guarantees the Trust Fund against loss or depreciation nor
do they guarantee the payment of any benefit or amount which may become due and
payable to any Participant or Beneficiary hereunder.
The Company shall deliver to the Trustee a copy of the Plans and of any
amendments thereto for convenience of reference, and the rights, powers and
duties of the Trustee shall be governed only by the terms of this Trust
Agreement without reference to the provisions of the Plans.
17
<PAGE> 19
All contributions to the Trust shall be deemed to take place in the State of
Minnesota. No contribution shall be subject to process either before or after
it is received by the Trustee.
ARTICLE XVIII
Execution
This Agreement shall be executed in any number of counterparts, each one of
which shall be deemed to be the original although the others shall not be
produced.
IN WITNESS WHEREOF, KIMBERLY-CLARK CORPORATION and FIRST TRUST NATIONAL
ASSOCIATION have caused this Agreement to be executed by their duly authorized
officers as of the day and year first above written.
KIMBERLY-CLARK CORPORATION
[S]
By:
------------------------------------
L. Robert Frazier
Assistant Treasurer
FIRST TRUST NATIONAL ASSOCIATION
By:
------------------------------------
Ronald E. Jensen
Vice President
By:
------------------------------------
Scott C. Curtiss
Vice President
18
<PAGE> 1
EXHIBIT 4.6
KIMBERLY-CLARK CORPORATION SALARIED EMPLOYEES
INCENTIVE INVESTMENT PLAN
<PAGE> 2
KIMBERLY-CLARK CORPORATION SALARIED
EMPLOYEES INCENTIVE INVESTMENT PLAN
(As amended through December 31, 1997)
<PAGE> 3
ARTICLE I
NAME, PURPOSE AND EFFECTIVE DATE OF PLAN
This Kimberly-Clark Corporation Salaried Employees Incentive Investment Plan
(the "Plan") has been adopted effective August 1, 1967. Its purpose is to
promote the interests of the Corporation and its stockholders by encouraging
Eligible Employees to arrange for personal investment programs which, depending
upon the success of the Corporation, will be augmented by Company Matching
Contributions. It provides each Eligible Employee with an opportunity to
become a stockholder of the Corporation. To comply with the applicable
requirements of the Tax Reform Act of 1986, the Plan has been restated in its
entirety effective March 31, 1993, except as otherwise provided in Section
11.12 hereof. The Plan is intended to be an employee stock ownership plan, as
defined in section 4975 of the Code, and is designed to invest primarily in
qualifying employer securities, as defined in section 409(l) of the Code.
<PAGE> 4
ARTICLE II
DEFINITIONS AND CONSTRUCTION
2.1 Definitions. When the following words and phrases appear in this
Plan, they shall have the respective meanings set forth below unless
the context clearly indicates otherwise:
(a) Accounts: The accounts under the Plan to be maintained for
each Participant as provided in Section 6.2.
(b) Actual Contribution Percentage: A percentage which, for a
specified group of Eligible Employees for a Plan Year shall be
the average of the ratios (calculated separately for each
Eligible Employee in such group) of
(i) the amount of After-Tax Contributions and Company
Matching Contributions remitted to the Trustee on
behalf of each Eligible Employee for such Plan Year
(but only to the extent that such Contributions and
Company Matching Contributions are not considered for
purposes of Section 2.1(c) hereof), together with
qualified nonelective contributions treated as
Company Matching Contributions pursuant to Code
section 401(m) and regulations thereunder, to
(ii) the Eligible Employee's Total Compensation for such
Plan Year.
For the purposes of determining the ratio of a Highly
Compensated Eligible Employee, the After-Tax Contributions,
Company Matching Contributions, and Total Compensation of such
Highly Compensated Eligible Employee shall include the
After-Tax Contributions, Company Matching Contributions, and
Total Compensation of family members (as defined in Code
section 414(q)(6)(B)) of said Highly Compensated Eligible
Employee; provided, however, that this sentence shall not
apply for Plan Years beginning after December 31, 1996.
(c) Actual Deferral Percentage: A percentage which, for a
specified group of Eligible Employees for a Plan Year, shall
be the average of the ratios (calculated separately for each
Eligible Employee in such group) of
(i) the amount of Before-Tax Contributions remitted to
the Trustee on behalf of each such Eligible Employee
for such Plan Year (and, to the extent determined
appropriate by the Committee, such other
Contributions and Company Matching Contributions as
may be used to determine the actual deferral
percentage under Code section 401(k) and regulations
thereunder), to
(ii) the Eligible Employee's Total Compensation for such
Plan Year.
<PAGE> 5
For the purposes of determining the ratio of a Highly
Compensated Eligible Employee, the Before-Tax Contributions
and Total Compensation of such Highly Compensated Eligible
Employee shall include the Before-Tax Contributions and Total
Compensation of family members (as defined in Code section
414(q)(6)(B)) of said Highly Compensated Eligible Employee;
provided, however that this sentence shall not apply for Plan
Years beginning after December 31, 1996.
(d) Affiliated Employer: An Employer and any corporation which is
a member of a controlled group of corporations (as defined in
Code section 414(b)) which includes an Employer; any trade or
business (whether or not incorporated) which is under common
control (as defined in Code section 414(c)) with an Employer;
any organization (whether or not incorporated) which is a
member of an affiliated service group (as defined in Code
section 414(m)) which includes an Employer; and any other
entity required to be aggregated with an Employer pursuant to
Code section 414(o).
(e) After-Tax Contributions: Contributions made by Participants
on an after-tax basis, which include Basic After-Tax
Contributions and Unrestricted After-Tax Contributions.
(f) All Cash Distribution: As defined in subsection 7.3(c).
(g) All Stock Distribution: As defined in subsection 7.3(a).
(h) Annuity Starting Date: The first day of the first period
following the Valuation Date for which a Participant's
distribution is payable as an annuity.
(i) Base Salary Rate: An amount, as determined by the Employer
pursuant to Committee rule, which is that portion of an
Eligible Employee's Total Compensation from an Employer which
consists only of regular earnings while a Participant.
Effective January 1, 1997, Base Salary Rate shall include
sales commissions. Base Salary Rate shall be determined before
Before-Tax Contributions pursuant to subsection 3.2(a), and
any elective salary reduction contributions pursuant to Code
Section 125, are deducted. With respect to any Eligible
Employee on a foreign assignment, such Eligible Employee's
Base Salary Rate shall disregard any adjustment which is made
to such Eligible Employee's salary as a result of such foreign
assignment. Notwithstanding the foregoing, the amount of any
Eligible Employee's compensation which is taken into account
for purposes of determining such Eligible Employee's Base
Salary Rate under the Plan shall not exceed the limit set
forth in Section 11.12.
<PAGE> 6
(j) Basic After-Tax Contributions:
(i) Contributions made by Participants under subsection
3.2(b) on an after-tax basis on account of which a
Company Matching Contribution is made to the Plan on
behalf of the Participant; or
(ii) Before-Tax Contributions in excess of the limitation
under subsection 3.5(a)(i) or in excess of the
limitation under subsection 3.5(b)(i) which are
recharacterized under subsection 3.5(b)(iii), and any
other employee contributions, as defined in Code
Section 401(m) and the regulations thereunder, on
account of which a Company Matching Contribution was
made to this Plan on behalf of the Participant,
excluding any such employee contributions contributed prior to
April 1, 1990, or made on behalf of a Participant who was
employed prior to April 1, 1989.
(k) Beneficiary: The person or persons last designated on Timely
Notice by a Participant, provided the named person survives
the Participant. If no such person is validly designated as
provided under Section 7.7(a), or if the designated person
predeceases the Participant, the Beneficiary shall be the
Participant's spouse, if living, and if not, the Participant's
estate.
(l) Before-Tax Contributions: Contributions made by Employers on
behalf of Participants under subsection 3.2(a) on or after
April 1, 1993 that are considered deferred within the meaning
of Code section 401(k) and regulations thereunder.
(m) Board: The Board of Directors of the Corporation.
(n) Bond Index Fund: An Investment Fund consisting of U.S.
government and investment grade corporate bonds, and asset
backed and mortgage backed securities with the objective to
match the performance of the Lehman Brothers Aggregate Bond
Index, or such other similar index as may be selected by the
Named Fiduciary. The Bond Index Fund shall include funds
transferred from the Government Fund under the prior version
of the Plan, and Contributions allocated to the Government
Fund as of October 1, 1996 under the prior version of the Plan
shall be allocated to the Bond Index Fund. The Bond Index Fund
shall also include funds transferred as of January 1, 1997
from, and Contributions allocated as of January 1, 1997 to,
the KCTC Admiral Long-Term U.S. Treasury Portfolio Fund
accounts of KCTC Heritage Employees under the KCTC Salaried
Plan. The Bond Index Fund shall also include funds transferred
as of January 1, 1998 from the KCTC Admiral Long-Term U.S.
Treasury Portfolio Fund accounts pursuant to the merger of the
KCTC Salaried Plan herein.
(o) Business Day: Any day on which securities are traded on the
New York Stock Exchange.
(p) Code: The Internal Revenue Code of 1986, as amended from time
to time.
<PAGE> 7
(q) Commissioner: The Commissioner of the Internal Revenue
Service.
(r) Committee: The committee appointed to administer and regulate
the Plan as provided in Article IX.
(s) Company Matching Contributions: Amounts contributed under the
Plan by Employers as provided in Article IV.
(t) Contributions: Amounts deposited under the Plan by or on
behalf of Participants including Before-Tax Contributions and
After-Tax Contributions as provided in Article III.
(u) Corporation: Kimberly-Clark Corporation (a Delaware
corporation).
(v) Corporation Stock: The common stock of the Corporation.
(w) Current Market Value: The fair market value on any day as
determined by the Trustee in accordance with generally
accepted valuation principles applied on a consistent basis.
(x) Day of Service: An Employee shall be credited with a Day of
Service for each calendar day commencing with the date on
which the Employee first performs an Hour of Service until the
Employee's Severance from Service Date. If an Employee quits,
is discharged, retires, or dies, and such Employee does not
incur a One-Year Period of Severance, the Employee shall be
credited with a Day of Service for each calendar day elapsed
from the Employee's Severance from Service Date to the date on
which the Employee again completes an Hour of Service.
(y) Eligible Employee: Any person who is in the employ of an
Employer during such periods as he meets all of the following
conditions:
(i) he is an Employee on the regular payroll of an
Employer,
(ii) he has (a) at least one calendar month of continuous
Service or (b) has completed during a computation
period beginning on or after April 1, 1993, 365
consecutive Days of Service, or has completed during
a computation period ending on or prior to March 31,
1993, at least 1,000 Hours of Service. A computation
period for purposes of this subsection 2.1(y)(ii)
shall be a period of 12 consecutive months, beginning
on the Employee's date of employment by the
Corporation, a Subsidiary or an Equity Company or an
anniversary thereof; and
(iii) he is in a Participating Unit.
<PAGE> 8
For purposes of this subsection, "on the regular payroll of an
Employer" shall mean paid through the payroll department of
such Employer, and shall exclude employees classified by an
Employer as intermittent or temporary, persons on limited
service receiving payments under the Scott Paper Company
Termination Pay Plan for Salaried Employees, and persons
classified by an Employer as independent contractors,
regardless of how such Employees may be classified by any
federal, state, or local, domestic or foreign, governmental
agency or instrumentality thereof, or court.
Any leased employee (as defined in Code section 414(n)) shall
not be considered an Eligible Employee under the Plan. In
addition, a person who formerly was an Eligible Employee shall
be treated as an Eligible Employee for all purposes hereunder
during such periods as he meets all of the following
conditions:
(i) he is an Employee on the regular payroll of an
Employer, and
(ii) he is on temporary assignment to provide services for
a corporation, hereinafter referred to as the
"Affiliate," which is a member of a controlled group
of corporations, within the meaning of Code section
414(b) as modified by Code section 415(h), of which
the Corporation is a member, and which is not an
Employer hereunder.
For purposes of the preceding sentence, a person shall be
considered on temporary assignment only if his period of
service for an Affiliate is expected to be of brief duration
not to exceed 5 years and if he is expected to resume services
for an Employer upon the expiration of the temporary
assignment with the Affiliate.
(z) Employee: A person employed by an Employer.
(aa) Employee Accounts: Those Accounts which reflect that portion
of a Participant's interest in the Investment Funds which are
attributable to his Contributions.
(bb) Employer: The Corporation and each Subsidiary which the
Committee shall from time to time designate as an Employer for
purposes of the Plan pursuant to Article X hereof and which
shall adopt the Plan and the Trust. A list of Employers is
set forth in Appendix A.
(cc) Employer Accounts: Those Accounts which reflect the portion
of a Participant's interest in the Investment Funds which are
attributable to Company Matching Contributions.
(dd) Entry Date: The first day of each month.
(ee) Equity Company: Any corporation, which is not the Corporation
or a Subsidiary, 33-1/3% or more of the voting shares of which
are owned directly or indirectly by the Corporation.
<PAGE> 9
(ff) ERISA: The Employee Retirement Income Security Act of 1974,
as amended from time to time.
(gg) Growth Stock Fund: An Investment Fund consisting primarily of
common or preferred stocks of medium to large capitalization
companies identified by the fund manager as having above
average growth potential. The Growth Stock Fund will include
funds transferred as of January 1, 1997 from, and
Contributions allocated as of January 1, 1997 to, the KCTC
U.S. Growth Portfolio Fund and the KCTC Index Trust - Small
Cap Stock Portfolio accounts of KCTC Heritage Employees under
the KCTC Salaried Plan. The Growth Stock Fund shall also
include funds transferred as of January 1, 1998 from the KCTC
U.S. Growth Portfolio Fund and KCTC Index Trust-Small Cap
Stock Portfolio Fund accounts pursuant to the merger of the
KCTC Salaried Plan herein.
(hh) Highly Compensated Eligible Employee: An Eligible Employee who
is described in Code section 414(q) and applicable regulations
thereunder. An Employee who is described in Code section
414(q) and applicable regulations thereunder generally means
an Employee who performed services for the Employer or an
Affiliated Employer during the "Determination Year" and is in
one or more of the following groups:
(i) Employees who at any time during the "Determination
Year" or "Look-Back Year" were "Five Percent Owners"
of the Employer or an Affiliated Employer. "Five
Percent Owner" means any person who owns (or is
considered owning within the meaning of Code Section
318) more than five percent of the outstanding stock
of the Employer or stock possessing more than five
percent of the total combined voting power of all
stock of the Employer or, in the case of an
unincorporated business, any person who owns more
than five percent of the capital or profits interest
in the Employer. In determining percentage ownership
hereunder, employers that would otherwise be
aggregated under Code sections 414(b), (c), (m) and
(o) shall be treated as separate employers; or
(ii) Employees who received "Compensation" during the
"Look-Back Year" from the Employer or an Affiliated
Employer in excess of $80,000, adjusted for changes
in the cost of living as provided in Code section
415(d) and, if the Employer elects, were in the "Top
Paid Group" of Employees for the Plan Year. "Top Paid
Group" means the top 20 percent of Employees,
excluding those Employees described in Code section
414(q)(8) and applicable regulations, who performed
services during the applicable Year, ranked according
to the amount of "Compensation" received from the
Employer during such Year.
The "Determination Year" shall be the Plan Year for which
testing is being performed, and the "Look-Back Year" shall be
the immediately preceding 12 month period.
<PAGE> 10
An Employer may make a uniform election with respect to all
plans of the Employer to apply a calendar year calculation, as
permitted by regulations under Code section 414(q).
For purposes of this subsection, "Compensation" shall mean
compensation as defined in subsection 12.1(a)(iv), including
elective salary reduction contributions made under this Plan
or another cash or deferred arrangement or pursuant to Code
section 125.
(ii) Hours of Service: Each hour for which an Employee is directly
or indirectly paid, or entitled to payment, by an Employer for
the performance of duties and for reasons other than the
performance of duties during the applicable computation
period. An Hour of Service shall also include each hour for
which back pay, irrespective of mitigation of damages, has
been either awarded or agreed to by an Employer. Hours of
Service shall be credited to the Employee for the computation
period or periods in which the duties are performed or for the
period to which the award or agreement pertains, whichever is
applicable. Credit for Hours of Service shall be given for
periods of absence spent in military service to the extent
required by law. Credit for Hours of Service may also be
given for such other periods of absence of whatever kind or
nature as shall be determined under uniform rules of the
Committee. Employment with a company which was not, at the
time of such employment, an Employer shall be considered as
the performance of duties for an Employer if such employment
was continuous until such company was acquired by, merged
with, or consolidated with an Employer and such employment
continued with an Employer following such acquisition, merger
or consolidation. Employment with a Subsidiary that is not an
Employer or with an Equity Company shall be considered as
performance of duties for an Employer.
Hours of Service shall be calculated and credited in a manner
consistent with U.S. Department of Labor regulation Section
2530.200b-2(b) and (c), and shall in no event exclude any
hours required to be credited under U.S. Department of Labor
regulation Section 2530.200b-2(a).
For any period or periods for which adequate records are not
available to accurately determine the Employee's Hours of
Service, the following equivalency shall be used:
190 Hours of Service for each month for which such
Employee would otherwise receive credit for at least
one Hour of Service.
Solely for purposes of determining whether an Employee has
incurred a one-year break-in-service, an Employee who is
absent from work:
(i) by reason of the pregnancy of the Employee;
(ii) by reason of the birth of a child of the Employee;
<PAGE> 11
(iii) by reason of a placement of a child with the
Employee in connection with the adoption of such
child by the Employee; or
(iv) for purpose of caring for such child for a period
beginning immediately following such birth or
placement,
shall be credited with certain Hours of Service which would
otherwise have been credited to the Employee if not for such
absence. The Hours of Service credited hereunder by reason of
such absence shall be credited with respect to the Plan Year
in which such absence begins, if such credit is necessary to
prevent the Employee from incurring a one-year
break-in-service in such Plan Year, and otherwise with respect
to the Plan Year immediately following the Plan Year in which
such absence begins. In addition, the Hours of Service
credited with respect to such absence shall not exceed 501,
and shall be credited only to the extent that the Employee
substantiates to the satisfaction of the Committee that the
Employee's absence, and the length thereof, was for the
reasons described in paragraphs (1)-(4) above.
Notwithstanding the foregoing, no Hours of Service shall be
credited pursuant to the three immediately preceding sentences
with respect to any absence which commences before April 1,
1985.
(jj) Installment Distribution. As defined in subsection 7.3(d).
(kk) International Index Fund: An Investment Fund consisting
primarily of stocks of established companies based in Europe,
Asia and the Far East, with the objective to match the
performance of the Morgan Stanley Capital International EAFE
Index or such other similar index as may be selected by the
Named Fiduciary. The International Index Fund shall include
funds transferred as of January 1, 1997 from, and
Contributions allocated as of January 1, 1997 to, the KCTC
International Growth Portfolio Fund accounts of KCTC Heritage
Employees under the KCTC Salaried Plan. The International
Index Fund shall also include funds transferred as of January
1, 1998 from the KCTC International Growth Portfolio Fund
accounts pursuant to the merger of the KCTC Salaried Plan
herein.
(ll) Investment Fund: An unsegregated fund of the Plan including
the K-C Stock Fund and such other funds as the Named Fiduciary
may establish. The Named Fiduciary may, from time to time, in
its discretion, establish additional funds or terminate any
fund. An Investment Fund may be, but shall not be limited to,
a fund managed by the Trustee, by an insurance company, or by
an investment company regulated under the Investment Company
Act of 1940. An Investment Fund, pending investment in
accordance with the fund purpose, may be invested in
short-term securities of the United States of America or in
other investments of a short-term nature.
(mm) K-C Stock Fund: An Investment Fund consisting of Corporation
Stock, with a portion invested in money market securities to
provide liquidity for Participant transactions. The K-C Stock
Fund shall also include funds transferred as of
<PAGE> 12
January 1, 1997 from, and Contributions allocated as of
January 1, 1997 to, the K-C Stock Fund accounts of KCTC
Heritage Employees under the KCTC Salaried Plan. The K-C Stock
Fund shall also include funds transferred as of January 1,
1998 from the K-C Stock Fund under the KCTC Salaried Plan
accounts pursuant to the merger of the KCTC Salaried Plan
herein.
(nn) KCTC: Kimberly-Clark Tissue Company, a wholly-owned
subsidiary of the Corporation.
(oo) KCTC Heritage Employee: An Employee of KCTC, as of December
31, 1996, who has an Hour of Service on January 1, 1997 and
who, as of January 1, 1997, is not receiving termination
payments under the Scott Paper Company Termination Pay Plan
for Salaried Employees, nor on a transition assignment and
expected to receive termination payments under the Scott Paper
Company Termination Pay Plan for Salaried Employees.
(pp) KCTC Heritage Rollover Account: An Account consisting of
Retirement Contributions and Matching Employer Contributions,
as defined under the KCTC Salaried Plan, and earnings and
losses attributable thereto, transferred from the KCTC
Salaried Plan as of January 1, 1997 with respect to KCTC
Heritage Employees, and such amounts transferred from the KCTC
Salaried Plan as of January 1, 1998 pursuant to the merger of
the KCTC Salaried Plan herein, and rollovers made under a
prior version of this Plan, with earnings thereon.
(qq) KCTC Salaried Plan: The Kimberly-Clark Tissue Company
Investment Plan for Salaried Employees.
(rr) Long-Term Managed Fund: An Investment Fund consisting
primarily of growth and emerging growth stocks, growth and
income stocks, bonds, and international stocks with a
long-term investment horizon. The Long-Term Managed Fund shall
include funds transferred as of January 1, 1997 from the KCTC
Asset Allocation Fund accounts of KCTC Heritage Employees
under the KCTC Salaried Plan. The Long-Term Managed Fund shall
also include funds transferred as of January 1, 1998 from the
KCTC Asset Allocation Fund accounts pursuant to the merger of
the KCTC Salaried Plan herein.
(ss) Lump Sum Distribution: A single distribution of the entire
amount of a Participant's Accounts.
(tt) Medium-Term Managed Fund: An Investment Fund consisting
primarily of bonds, growth and income stocks, growth and
emerging growth stocks and money market securities with a
medium-term investment horizon. The Medium-Term Managed Fund
shall include funds transferred as of January 1, 1997 from the
KCTC Balanced Index Fund accounts of KCTC Heritage Employees
under the KCTC Salaried Plan. The Medium-Term Managed Fund
shall also include funds transferred as of January 1, 1998
from the KCTC Balanced Index Fund accounts pursuant to the
merger of the KCTC Salaried Plan herein.
<PAGE> 13
(uu) Minimum Return Joint & Survivor Annuity Distribution. As
defined in subsection 7.3(e).
(vv) Minimum Return Single-Life Annuity. As defined in subsection
7.3(f).
(ww) Money Market Fund: An Investment Fund consisting of
short-term debt securities issued or fully guaranteed as to
the payment of principal and interest by the U.S. government
or any agency or instrumentality thereof.
(xx) Months of Service: A calendar month any part of which an
Employee completes an Hour of Service. Except, however, an
Employee shall be credited with a Month of Service for each
month during the 12 month computation period in which he has
not incurred a One-Year Period of Severance. An Employee
shall be credited with a Month of Service for each calendar
month of absence during the 12 month computation period
following the date on which the Employee does not complete an
Hour of Service for any reason other than the Employee quits,
is discharged, retires or dies.
(yy) Named Fiduciary: The Retirement Trust Committee (the members
of which are designated by the Chief Executive Officer of the
Corporation) shall be the Named Fiduciary of the Plan as
defined in ERISA.
(zz) One-Year Period of Severance: The applicable computation
period of 12 consecutive months during which an Employee fails
to accrue a Day of Service. Years of Service and One-Year
Periods of Severance shall be measured on the same computation
period.
An Employee shall not be deemed to have incurred a One-Year
Period of Severance if he completes an Hour of Service within
12 months following his Severance from Service Date.
(aaa) Partial Distribution: A distribution of a portion of a
Participant's Accounts.
(bbb) Participant: An Eligible Employee who has validly elected to
participate under Section 3.1. He remains a Participant until
all of his Accounts have been distributed pursuant to the
Plan.
(ccc) Participating Unit: A specific classification of Employees of
an Employer designated from time to time by the Committee
pursuant to Article X hereof as participating in this Plan.
The classifications so designated are shown in Appendix A.
(ddd) Period Certain and Continuous Annuity Distribution. As
defined in subsection 7.3(h).
(eee) Period Certain Annuity Distribution. As defined in subsection
7.3(g).
<PAGE> 14
(fff) Plan Year: After December 31, 1993, a twelve calendar month
period beginning January 1 and ending the following December
31. The period beginning on April 1, 1993, and ending
December 31, 1993, shall constitute a Plan Year. For the
period prior to April 1, 1993, and after March 31, 1970, each
twelve calendar month periods beginning on April 1 of one year
and ending March 31 of the following year.
For purposes of identification, each Plan Year is designated
in terms of the calendar year in which it commences.
(ggg) Service: Regular employment with the Corporation, a
Subsidiary or an Equity Company. For all purposes under the
Plan, Service shall include service with KCTC and Scott Paper
Company prior to January 1, 1997.
(hhh) Severance from Service Date: The earlier of:
(i) the date an Employee quits, is discharged, retires or
dies, or
(ii) the first anniversary of the date an Employee is
absent from Service for any reason other than a quit,
discharge, retirement, or death (e.g., disability,
leave of absence, or layoff, etc.)
(iii) SMI: Schweitzer-Mauduit International, Inc., a Delaware
corporation.
(jjj) SMI Stock: The common stock of SMI.
(kkk) SMI Stock Fund: An Investment Fund consisting of SMI Stock.
(lll) Stable Income Fund: An Investment Fund consisting primarily
of investment contracts issued by insurance companies or banks
and in money market securities. The Stable Income Fund shall
include funds transferred as of October 1, 1996 from the Fixed
Income Fund under the prior version of the Plan, and
Contributions allocated to the Fixed Income Fund under the
prior version of the Plan shall be allocated to the Stable
Income Fund. The Stable Income Fund shall also include funds
transferred as of January 1, 1998 from the KCTC Stable Income
Fund under the prior version of the Plan, from the Salaried
Fixed Income Fund under the KCTC Salaried Plan and from the
Hourly Fixed Income Fund under the Kimberly-Clark Tissue
Company Investment Plan for Hourly Employees.
(mmm) Stock and Cash Distribution: As defined in subsection 7.3(b).
(nnn) Stock Index Fund. An Investment Fund consisting of common and
preferred stocks of established corporations and other issues
convertible into such common and preferred stocks, with the
objective to match the performance of the Standard & Poors
(S&P) 500 Stock Index, or such other similar index as may be
<PAGE> 15
selected by the Named Fiduciary. The Stock Index Fund shall
include funds transferred as of October 1, 1996 from the
Diversified Fund under the prior version of the Plan and
Contributions allocated to the Diversified Fund under the
prior version of the Plan shall be allocated to the Stock
Index Fund. The Stock Index Fund shall include funds
transferred as of January 1, 1997 from, and Contributions
allocated as of January 1, 1997 to, the KCTC Index Trust-Total
Stock Market Portfolio and KCTC Windsor Fund accounts of KCTC
Heritage Employees under the KCTC Salaried Plan. The Stock
Index Fund shall also include funds transferred as of January
1, 1998 from the KCTC Index Trust-Total Stock Market Portfolio
Fund and KCTC Windsor Fund accounts pursuant to the merger of
the KCTC Salaried Plan herein.
(ooo) Subsidiary: Any corporation, 50% or more of the voting shares
of which are owned directly or indirectly by the Corporation,
which is incorporated under the laws of one of the States of
the United States.
(ppp) Terminated Participant: A Participant who has terminated his
employment with an Employer prior to January 1, 1998 (i) with
the aggregate value of the Participant's Accounts exceeding
$3,500, or (ii) a Participant who has terminated employment
with his Employer on or after January 1, 1998 with the
aggregate value of the Participant's Accounts exceeding
$5,000, and who has not elected to receive a distribution
under the Plan. A Terminated Participant shall also include a
former employee of KCTC whose account balance under the KCTC
Salaried Plan is transferred to the Plan as of January 1,
1998.
(qqq) Timely Notice: A notice in writing on forms, or by electronic
medium, or through a voice response system, prescribed by the
Committee and filed at such places and at such times as shall
be established by Committee rules.
(rrr) Total Compensation: An Eligible Employee's total compensation
as that term is defined in Code section 414(s). Total
Compensation of any Eligible Employee shall not exceed the
limit set forth in Section 11.12.
(sss) Trust: The Kimberly-Clark Corporation Defined Contribution
Plans Trust pursuant to the trust agreement provided for in
Article V.
(ttt) Trustee: The trustee under the Trust.
(uuu) Unrestricted After-Tax Contributions:
(i) Contributions made by Participants under subsection
3.2(b) on an after-tax basis on account of which no
Company Matching Contribution is made to the Plan on
behalf of the Participant; or
(ii) Employee contributions, as defined in Code Section
401(m) and the regulations thereunder, contributed
prior to April 1, 1990 on account of
<PAGE> 16
which a Company Matching Contribution was made under
this Plan on behalf of a Participant who was employed
prior to April 1, 1989; or
(iii) Before-Tax Contributions in excess of the limitation
under subsection 3.5(a)(i) or in excess of the
limitation under 3.5(b)(i) and which are
recharacterized under subsection 3.5(b)(ii) and any
other Employee contribution as defined under Code
Section 401(m) and the regulations thereunder, on
account of which no Company Matching Contribution was
made to this Plan on behalf of the Participant.
(vvv) Valuation Date: Each Business Day for which the Current Market
Value of a Participant's Accounts is determined for purposes
of this Plan.
(www) Year of Service: An Employee shall accrue a Year of Service
for each 365 Days of Service. If the total of an Employee's
Service exceeds his whole Years of Service, then such Employee
shall be credited with an additional fraction of a Year of
Service, the numerator of which shall be the total number of
his Days of Service represented by such excess and the
denominator of which shall be 365. If the total of an
Employee's Service is less than one Year of Service, then such
Employee shall be credited with a fraction of a Year of
Service, the numerator of which shall be the total number of
his Days of Service and the denominator of which shall be 365.
2.2 Construction. Where appearing in the Plan, the masculine shall
include the feminine and the plural shall include the singular, unless
the context clearly indicates otherwise. The words "hereof,"
"herein," "hereunder" and other similar compounds of the word "here"
shall mean and refer to the entire Plan and not to any particular
Section or subsection.
<PAGE> 17
ARTICLE III
PARTICIPATION, CONTRIBUTIONS, AND ALLOCATIONS
3.1 Election to Participate. An Eligible Employee's election to
participate in the Plan shall, if given on Timely Notice,
(a) be effective as of the first Entry Date following his
election, or as soon as administratively possible thereafter,
and
(b) remain in effect as a valid election to participate for each
successive Plan Year.
An election to participate by an Eligible Employee who, immediately
prior to becoming an Eligible Employee, was a participant under the
Kimberly-Clark Corporation Hourly Employees Incentive Investment Plan
shall be effective as soon as administratively possible upon
exercising his election, and his accounts thereunder shall be
transferred to this Plan in a manner determined by the Committee.
Notwithstanding the foregoing, a KCTC Heritage Employee who was a
participant in the KCTC Salaried Plan as of January 1, 1997 shall
become a Participant in the Plan on January 1, 1997, and such KCTC
Heritage Employee's elections in effect under the KCTC Salaried Plan
as of December 31, 1996 shall remain in effect as provided under this
Plan; provided that a KCTC Heritage Employee who is not actively
employed on January 1, 1997 shall become a Participant in the Plan
upon his return to active employment, and his elections in effect
under the KCTC Salaried Plan shall remain in effect as provided under
this Plan, and his accounts under the KCTC Salaried Plan shall be
transferred to this Plan in a manner determined by the Committee.
3.2 Amount of Contributions by and on behalf of Participants.
(a) Before-Tax Contributions. During each Plan Year, Before-Tax
Contributions shall be made on behalf of a Participant by his
Employer for deposit to his Account as follows:
(i) Subject to the provisions of Section 3.5, a
Participant may elect on Timely Notice to make
Before-Tax Contributions to his Account in any whole
percentage equal to an amount which is not less than
1% of his Base Salary Rate and not more than 15% of
his Base Salary Rate.
(ii) Before-Tax Contributions shall be deducted from a
Participant's Total Compensation. An election under
this subsection shall remain in effect for so long as
a Participant is eligible to make Before-Tax
Contributions or, if earlier, until changed by a
Participant. A Participant may change his election on
Timely Notice effective as of the Participant's first
payroll check on or after first day of the following
month, or as soon as administratively possible
thereafter.
<PAGE> 18
(b) After-Tax Contributions.
(i) A Participant may elect on Timely Notice to make
After-Tax Contributions to his Account in any whole
percentage equal to an amount which is not less than
1% of his Base Salary Rate and not more than 15% of
his Base Salary Rate.
(ii) An election to make After-Tax Contributions by
regular payroll deduction shall remain in effect for
so long as a Participant is eligible to make
After-Tax Contributions or, if earlier, until changed
by a Participant. A Participant may change such
election on Timely Notice effective as of the
Participant's first payroll check on or after the
first day of the following month, or as soon as
administratively possible thereafter.
(iii) After-Tax Contributions equal to the difference
between 5% of a Participant's Base Salary Rate and
the Participant's Before-Tax Contributions, but not
less than zero (0), shall be classified as Basic
After-Tax Contributions and shall be taken into
account in determining the Company Matching
Contributions made on behalf of the Participant.
(iv) After-Tax Contributions which are not Basic After-Tax
Contributions shall be classified as Unrestricted
After-Tax Contributions and shall not be taken into
account in determining the amount of Company Matching
Contributions made on behalf of Participants.
3.3 General Limitation.
(a) Notwithstanding any other provision of this Article III, no
Contribution shall be made to the Plan which would cause the
Plan to fail to meet the requirements for exemption from tax
or to violate any provisions of the Code.
(b) Notwithstanding any other provision of this Article III, the
Contributions made by and on behalf of a Participant shall not
exceed 20% of his Base Salary Rate; provided, however, that
effective January 1, 1997, the Contributions made by and on
behalf of a Participant shall not exceed 15% of his Base
Salary Rate.
3.4 Investment of Contributions by and on behalf of Participants.
(a) Before-Tax Contributions and After-Tax Contributions. On
Timely Notice, a Participant shall elect to invest in whole
multiples of 1% all of the Before-Tax Contributions and
After-Tax Contributions to be made on his behalf during a Plan
Year to one or more of
(i) the Money Market Fund
(ii) the Stable Income Fund
(iii) the Bond Index Fund
<PAGE> 19
(iv) the Medium-Term Managed Fund
(v) the Long-Term Managed Fund
(vi) the Stock Index Fund
(vii) the Growth Stock Fund
(viii) the International Index Fund, or
(ix) the K-C Stock Fund
An election under this subsection shall remain in effect until
changed by a Participant. A Participant may change his
election and such election shall be effective as of the date
of the Participant's next Contribution following Timely Notice
of the change, or as soon as administratively possible
thereafter.
(b) Notwithstanding any other provision of this Article III, no
Contributions shall be invested in a Participant's Accounts in
the SMI Stock Fund.
3.5 Limitations on Before-Tax Contributions.
(a) Overall Limitation.
(i) Notwithstanding any provision of the Plan to the
contrary, Before-Tax Contributions made on behalf of
a Participant by his Employer for deposit to his
Account shall not exceed $7,000 (or such greater
amount as permitted under applicable regulations to
reflect cost-of-living increases) in any taxable year
of the Participant.
(ii) If a Participant so elects, Before-Tax Contributions
made in excess of the amount permitted in (a)(i) of
this Section (or, if less, their Current Market Value
on the date of the deposit thereof pursuant to this
subsection) shall be deposited to the Participant's
Account as a Basic After-Tax Contribution or
Unrestricted After-Tax Contribution, as applicable,
by such Participant.
(iii) If a Participant does not elect to deposit his
Before-Tax Contributions in excess of the amount
permitted in Section 3.5(a)(i), the percentage of his
Before-Tax Contributions shall be reduced in order to
meet the limitations of Section 3.5(a)(i).
(iv) Basic After-Tax Contributions or Unrestricted
After-Tax Contributions, as applicable, deposited to
a Participant's Account pursuant to (ii) above will
be allocated to the Plan funds in the same manner as
Before-Tax Contributions made on behalf of the
Participant.
(b) Limitations on Actual Deferral Percentage.
(i) In any Plan Year in which the Actual Deferral
Percentage for the group of Highly Compensated
Eligible Employees would be more than the greater of
<PAGE> 20
(A) the Actual Deferral Percentage of all other
Eligible Employees multiplied by 1.25, or
(B) the lesser of (1) 2 percent plus the Actual
Deferral Percentage of all other Eligible
Employees or (2) the Actual Deferral
Percentage of all other Eligible Employees
multiplied by 2.0,
the deferral rate under subsection 3.2(a) of those
Highly Compensated Eligible Employees shall be
reduced (in whole or less than whole percentages) in
descending order by rate of deferral elected until
the Actual Deferral Percentage for the group of
Highly Compensated Eligible Employees is not more than
the greater of (A) or (B); provided, however, that
for Plan Years beginning after December 31, 1996, the
deferral rate under subsection 3.2(a) of those Highly
Compensated Eligible Employees shall be reduced (in
whole or less than whole percentages) in descending
order beginning with the Highly Compensated Eligible
Employee with the highest deferral rate until the
Actual Deferral Percentage for the group of Highly
Compensated Eligible Employees is not more than the
greater of (A) or (B).
For purposes of this subsection, a person shall not
be considered to be an Eligible Employee until such
time as he or she could first have in effect a valid
election to participate in the Plan.
(ii) In order to prevent the multiple use of the
alternative limitations described in subsections
3.5(b)(i)(B) and 4.4(a)(i)(B), the following
provisions shall apply. If the Actual Deferral
Percentage test in subsection 3.5(b)(i) is satisfied
using subsection 3.5(b)(i)(B), the Actual
Contribution Percentage test in subsection 4.4(a)(i)
is satisfied using subsection 4.4(a)(i)(B), and the
combined Actual Deferral Percentage and Actual
Contribution Percentage exceeds the greater of:
(A) the sum of: (I) the greater of the Actual
Deferral Percentage or the Actual
Contribution Percentage for Eligible
Employees other than Highly Compensated
Eligible Employees multiplied by 1.25, and
(II) 2 percent plus the lesser of the Actual
Deferral Percentage or the Actual
Contribution Percentage for Eligible
Employees other than Highly Compensated
Eligible Employees (but not more than the
lesser of the Actual Deferral Percentage or
Actual Contribution Percentage for Eligible
Employees other than Highly Compensated
Eligible Employees multiplied by 2.0), or
(B) the sum of: (I) the lesser of the Actual
Deferral Percentage or the Actual
Contribution Percentage for Eligible
Employees other than Highly Compensated
Eligible Employees multiplied by 1.25, and
(II) 2 percent plus the greater of the Actual
Deferral Percentage or the
<PAGE> 21
Actual Contribution Percentage for Eligible
Employees other than Highly Compensated
Eligible Employees (but not more than the
greater of the Actual Deferral Percentage or
Actual Contribution Percentage for Eligible
Employees other than Highly Compensated
Eligible Employees multiplied by 2.0),
then the deferral rate under subsection 3.2(a) of
those Highly Compensated Eligible Employees shall be
reduced in accordance with subsection 3.5(b)(i) or
the contribution rate of those Highly Compensated
Eligible Employees shall be reduced in accordance
with subsection 4.4(a)(i), or both as determined by
the Committee, so that there is no multiple use of
the alternative limitation, as described in
regulations under Code section 401(m).
In lieu of the reduction described in this subsection
3.5(b)(ii) and in 3.5(b)(i) above, the Employer may
make qualified nonelective contributions (pursuant to
the regulations under Code sections 401(k) and
401(m)) to be allocated only to the Accounts of
Participants who are not Highly Compensated Eligible
Employees.
Qualified nonelective contributions treated as
elective contributions, whether taken into account to
satisfy the limit set forth in this subsection
3.5(b)(ii) or in 3.5(b)(i) above, shall be fully
vested when made and shall not be distributed before
one of the events described in subsection
4.4(a)(iii).
Any excess contribution resulting from the required
reduction described above shall be corrected in
accordance with subsection 3.5(b)(iii). Any such
excess aggregate contribution resulting from required
reduction shall be corrected in accordance with
subsection 4.4(a)(iii).
(iii) Before-Tax Contributions actually made in excess of
the amount permitted under subsections 3.5(b)(i) and
3.5(b)(ii) shall be recharacterized as Basic
After-Tax Contributions or Unrestricted After-Tax
Contributions, as applicable, by the close of the
Plan Year following the Plan Year for which such
Before-Tax Contributions were made. If such excess
Before-Tax Contributions are not recharacterized as
Basic After-Tax Contributions or Unrestricted After-
Tax Contributions within 2 1/2 months after the close
of the Plan Year for which they were made, a 10
percent excise tax on the amount of such excess
Before-Tax Contributions may apply. Recharacterized
excess Before-Tax Contributions shall be fully vested
when made and shall not be distributed before one of
the events described in subsection 4.4(a)(iii). Such
Contributions (or, if less, their Current Market
Value on the date of the deposit thereof pursuant to
this subsection) shall be deposited to the
Participant's Account as a Basic After- Tax
Contribution or Unrestricted After-Tax Contribution,
as applicable.
<PAGE> 22
(iv) Before-Tax Contributions will be taken into account
for purposes of determining the Actual Deferral
Percentage for a Plan Year only if they relate to
Total Compensation that would have been received by
the Participant during the Plan Year (but for the
election to make Before-Tax Contributions hereunder),
or Total Compensation that is attributable to
services performed by the Participant during the Plan
Year and would have been received by the Participant
within 2 1/2 months after the close of the Plan Year
(but for the election to make Before-Tax
Contributions hereunder).
(c) Additional Limitation. Notwithstanding any provision of the
Plan to the contrary, the Committee may limit or adjust the
amount of Before-Tax Contributions in a manner that prevents
contributions in excess of the limit set forth in subsection
3.5(b) above; provided that a Participant may elect to
preserve his total Contributions election under the Plan so
that his Before-Tax Contributions which are limited under
Section 3.5 are automatically made as Basic After-Tax
Contributions or Unrestricted After-Tax Contributions, as
applicable, subject to Section 3.3 above during such period as
his Before-Tax Contributions are so limited.
3.6 Suspension of All Contributions. On Timely Notice and notwithstanding
the provisions of Section 3.2, a Participant may elect to suspend all
of his Contributions, effective as of the Participant's first payroll
check on or after the first day of the following month, or as soon as
administratively possible thereafter. On Timely Notice a Participant
may elect to resume Contributions as of the Participant's first
payroll check on or after the first day of the following month, or as
soon as administratively possible thereafter.
A Participant's Contributions shall be suspended commencing with and
continuing throughout any period during which he fails to qualify as
an Eligible Employee. On Timely Notice upon requalifying as an
Eligible Employee a Participant may elect to make Contributions to his
Accounts and such election shall be effective as soon as
administratively possible.
3.7 Payment of Contributions to Trustee. The Employers shall contribute
or remit to the Trustee no later than 15 days after the end of each
month the amounts deducted or withheld from the Participants'
compensation as Contributions under the Plan.
3.8 Reallocation of Participant's Accounts.
(a) A Participant may, as of any Business Day, elect to (i)
reallocate all or any whole percentage portion, or (ii) effect
a fund transfer of all or any whole percentage portion or
dollar amount, of any of his Employee Accounts or Employer
Accounts among the Investment Funds listed in Section 3.4,
including the SMI Stock Fund; provided, however, that:
<PAGE> 23
(i) Company Matching Contributions contributed to a
Participant's Employer Account in the K-C Stock
Fundon or after October 1, 1996, excluding amounts in
the KCTC Heritage Rollover Account, and earnings and
losses thereon, shall not be reallocated to any other
Employer Account until a Participant attains age 50,
(ii) no amounts shall be reallocated or transferred to a
Participant's Employee Accounts or Employer Accounts
in the SMI Stock Fund, and
(iii) effective January 1, 1998, amounts in a Participant's
Employee Accounts or Employer Accounts in the Stable
Income Fund (A) may only be reallocated or
transferred to one or more of the Investment Funds
listed in subsections 3.4(a)(iii) through 3.4(a)(ix);
and (B) once reallocated or transferred, cannot be
transferred to the Money Market Fund for a period of
not less than 90 days.
(b) A Participant's election to reallocate or effect a fund
transfer shall be effective as soon as administratively
possible following Timely Notice, and the amount of such
reallocation shall be determined by the value of the
Participant's interest in any Investment Fund on the Valuation
Date on which such reallocation takes effect.
3.9 Redeposits and Restored Amounts.
(a) Notwithstanding any provision in this Plan to the contrary, on
Timely Notice, an Employee who has forfeited all or a portion
of his Employer Accounts may redeposit such distribution or
withdrawal before the earlier of (i) the date on which the
Employee has been reemployed for five years or (ii) the date
on which the Employee incurs five consecutive One-Year Periods
of Severance following the year of the distribution or
withdrawal. Upon such redeposit, the amount of the forfeiture
associated with the redeposit shall be restored to the
Employee's Account in the K-C Stock Fund from which it was
forfeited. Redeposits shall be allocated to the Plan funds in
the same manner as Before-Tax Contributions made on behalf of
the Participant. The amount redeposited shall be equal to the
total amount distributed or withdrawn which caused the
forfeiture.
(b) No redeposit of such a withdrawal or distribution shall be
permitted if, coincident with or subsequent to the forfeiture
associated with that withdrawal or distribution, an Employee
incurs 5 consecutive One-Year Periods of Severance. For Plan
Years prior to April 1, 1989, and for purposes of this Section
3.9 only, an Employee incurs a One-Year Period of Severance if
he is not an Employee on the last day of a Plan Year.
(c) A Participant who is entitled to no portion of his Employer
Account upon termination of employment shall be deemed to have
received a distribution of zero dollars ($0) from such
account.
<PAGE> 24
(d) Any forfeiture from the Before-Tax Contributions or Basic
After-Tax Contribution Section of his Employer Accounts shall
be restored in accordance with the provisions of this Section
3.9 if the Terminated Participant returns to his employment
with an Employer prior to incurring five consecutive One-Year
Periods of Severance and, effective with forfeitures on or
after October 1, 1996, the Terminated Participant has either
(i) not received a distribution or withdrawal from the
Before-Tax Contributions or Basic After-Tax Contribution
Section of his Employee Accounts, or (ii) has redeposited such
distribution or withdrawal as provided in subsection (a)
above.
3.10 Source of and Interest in Before-Tax Contributions. Anything in this
Plan to the contrary notwithstanding, Before-Tax Contributions shall
be made by the Employers out of current or accumulated earnings and
profits, and the Employers shall have no beneficial interest of any
nature whatsoever in any such Contributions after the same have been
received by the Trustee.
3.11 Contributions During Qualified Military Leave. Notwithstanding any
provision of this Plan to the contrary, Contributions and Company
Matching Contributions may be made for periods of qualified military
service in accordance with Section 414(u) of the Code.
<PAGE> 25
ARTICLE IV
EMPLOYER CONTRIBUTIONS
4.1 Contribution Percentage. Subject to Section 4.3, Company Matching
Contributions for each Plan Year shall be 75% of a Participant's
Before-Tax Contributions or Basic After-Tax Contributions on the first
2% of such Participant's Base Salary Rate per pay period, and 50% of a
Participant's Before-Tax Contributions or Basic After-Tax
Contributions on the next 3% of such Participant's Base Salary Rate
per pay period.
No Company Matching Contributions shall be made with respect to a
Participant's Unrestricted After-Tax Contributions.
4.2 Allocation and Payment of Company Matching Contributions. Company
Matching Contributions shall be
(a) made out of current or accumulated earnings and profits,
(b) allocated exclusively to the K-C Stock Fund,
(c) made to the Trustee as soon as practicable after the end of
the month in which the related Contributions are deducted or
withheld for payment to the Trustee, and
(d) made in cash, or at the sole option of the Employer, in shares
of Corporation Stock held in the treasury, or both (but not in
authorized but unissued shares) in which event the amount of
any Company Matching Contribution made in Corporation Stock
shall be the Current Market Value thereof on the date of
delivery to the Trustee which, for the purposes of the Plan,
shall be considered as the Trustee's cost of such shares
except where Treasury Regulations sections
1.402(a)-1(b)(2)(ii) and 54.4975-11(d)(1) require shares of
Corporation Stock acquired while the Plan is an employee stock
ownership plan to have a different cost in order to satisfy
their requirements.
Any forfeiture under the Plan may be applied to reduce Company
Matching Contributions, or if determined by the Committee in its
discretion, to offset administrative expenses of the Plan. A
forfeiture shall be valued at Current Market Value as of the Valuation
Date on which the forfeiture occurred.
4.3 Temporary Suspension of Company Matching Contributions. The Board may
order the suspension of all Company Matching Contributions if, in its
opinion, the Corporation's consolidated net income after taxes for the
last fiscal year is substantially below the Corporation's consolidated
net income after taxes for the immediately preceding fiscal year. Any
such determination by the Board shall be communicated to all Eligible
Employees and to all Participants reasonably in advance of the first
date for which such temporary suspension is ordered.
<PAGE> 26
Except when caused, as determined by the Board, by a change in the
capital structure of the Corporation which has the effect that the
regular cash dividend rate is not in fairness comparable between
successive quarters, any reduction of the regular cash dividend rate
payable on Corporation Stock for any quarter as compared with the
immediately preceding quarter shall automatically result in the
suspension of all Company Matching Contributions for the first Plan
Year commencing after the quarter in which such reduction occurs.
4.4 Limitations on Company Matching Contributions, Unrestricted After-Tax
Contributions and Basic After-Tax Contributions.
(a) Limitations on Actual Contribution Percentage.
(i) In any Plan Year in which the Actual Contribution
Percentage for the group of Highly Compensated
Eligible Employees would be more than the greater of
(A) the Actual Contribution Percentage of all
other Eligible Employees multiplied by 1.25,
or
(B) the lesser of (I) 2 percent plus the Actual
Contribution Percentage of all other Eligible
Employees or (II) the Actual Contribution
Percentage of all other Eligible Employees
multiplied by 2.0,
the contribution rate under subsection 3.2(b) and
Section 4.1 of those Highly Compensated Eligible
Employees shall be reduced (in whole or less than
whole percentages) in descending order until the
Actual Contribution Percentage for the group of Highly
Compensated Eligible Employees is not more than the
greater of (A) or (B); provided, however that for Plan
Years beginning after December 31, 1996 the
contribution rate under Section 3.2 and 4.1 of those
Highly Compensated Eligible Employees shall be reduced
(in whole or less than whole percentages) in
descending order beginning with the Highly Compensated
Eligible Employee with the highest contribution rate
until the Actual Contribution Percentage for the group
of Highly Compensated Eligible Employees is not more
than the greater of (A) or (B).
For purposes of this subsection, a person shall not
be considered to be an Eligible Employee until such
time as he or she could first have in effect a valid
election to participate in the Plan.
(ii) In order to prevent the multiple use of the
alternative limitations described in subsections
3.5(b)(i)(B) and 4.4(a)(i)(B), the provisions of
subsection 3.5(b)(ii) shall apply.
<PAGE> 27
(iii) After-Tax Contributions and Company Matching
Contributions for the Plan Year (if any) in excess of
the amount permitted under subsection 4.4(a)(i) and
4.4(a)(ii), together with the income or loss
allocable thereto, shall be distributed to the
Participant after the close of the Plan Year and
within 12 months after the close of that Plan Year
(and, if practicable, no later than 2 1/2 months
after the close of the Plan Year in order to avoid
any excise tax imposed on the Employer for excess
aggregate contributions); provided, however, that an
Employer may make qualified nonelective contributions
(as provided under Code section 401(m) and the
regulations thereunder) to be allocated only to the
Accounts of Participants who are not Highly
Compensated Eligible Employees that, in combination
with After-Tax Contributions and Company Matching
Contributions, satisfy the limit set forth in
4.4(a)(i) and 4.4(a)(ii) above. Such qualified
nonelective contributions (as provided under Code
section 401(m) and the regulations thereunder),
whether taken into account to satisfy the limit set
forth in 4.4(a)(i) and 4.4(a)(ii) above, shall be
fully vested when made, shall be allocated as of a
date within the Plan Year, and shall not be
distributed before one of the following events:
(A) the Eligible Employee's retirement, death,
disability, or separation from service, as
provided under Code section 401(k) and
applicable regulations;
(B) the Eligible Employee's attainment of age 59
1/2 or the Eligible Employee's hardship, as
provided under Code section 401(k) and
applicable regulations;
(C) the termination of the Plan without the
establishment or maintenance of a successor
plan, as provided under Code section 401(k)
and applicable regulations;
(D) the date of the sale or other disposition by
an Employer of substantially all the assets
used in a trade or business to an unrelated
corporation, but only with respect to an
Eligible Employee who continues employment
with the acquiring corporation, provided that
the Employer continues to maintain the plan
after the sale or disposition and the
acquiring corporation does not maintain the
plan after the sale or disposition, in
accordance with Code section 401(k) and
applicable regulations; or
(E) the date of the sale or other disposition by
an Employer of its interest in a subsidiary
to an unrelated entity or individual, but
only with respect to an Eligible Employee who
continues employment with the acquiring
corporation, provided that the Employer
continues to maintain the plan after the sale
or disposition and the acquiring corporation
does not maintain the plan after the sale or
<PAGE> 28
disposition, in accordance with Code section
401(k) and applicable regulations.
The income or loss allocable to an excess aggregate
contribution under subsection 4.4(a)(i) shall be
determined in the manner set forth in subsection
4.4(a)(iii).
(iv) The income or loss allocable to an excess aggregate
contribution shall be determined by multiplying the
income or loss allocable to a Participant's After-Tax
Contributions and Company Matching Contributions for
the Plan Year by a fraction, the numerator of which
is the After-Tax Contributions and Company Matching
Contributions made in excess of the amount permitted
in (a)(i) of this Section and the denominator of
which is the balance of the After-Tax Contributions
and Company Matching Contributions Sections of the
Participant's Account on the last day of the Plan
Year, together with any After-Tax Contributions and
Company Matching Contributions for the gap period
described below, but reduced by the income allocable
to such Sections for the Plan Year and increased by
the loss allocable to such Sections for the Plan
Year. The income or loss allocable to an excess
aggregate contribution shall include the income or
loss allocable for the period between the end of the
Plan Year and the date of distribution (the "gap
period"). The income or loss allocable to an excess
aggregate contribution for the gap period shall equal
10% of the income or loss allocable to such
contribution as determined above, multiplied by the
number of months that have elapsed since the end of
the Plan Year. For this purpose, a distribution on
or before the 15th of the month shall be treated as
made on the last day of the preceding month, and a
distribution made after the 15th of the month shall
be treated as made on the first day of the next
month.
(b) Additional Limitation. Notwithstanding any provision of the
Plan to the contrary, the Committee may limit or adjust the
amount of After-Tax Contributions and Company Matching
Contributions in a manner that prevents contributions in
excess of the limit set forth in subsection 4.4(a)(i) above.
<PAGE> 29
ARTICLE V
TRUSTEE AND TRUST AGREEMENT
5.1 The Corporation shall enter into a trust agreement with a person or
corporation selected by the Chief Executive Officer of the Corporation
to act as Trustee of Contributions and Company Matching Contributions.
The Trustee shall receive all Contributions and all Company Matching
Contributions and shall hold, manage, administer, and invest the same,
reinvest any income, and, in accordance with instructions and
directions of the Committee subject to the Plan, make distributions.
The trust agreement shall be in such form and contain such provisions
as the Chief Executive Officer of the Corporation may deem necessary
and appropriate to effectuate the purposes of the Plan and to qualify
the Plan and the Trust under the Code. Upon the written request of an
Eligible Employee, a copy of the trust agreement shall be made
available for his inspection.
The Chief Executive Officer of the Corporation may, from time to time,
remove the Trustee or any successor Trustee at any time and any such
Trustee or any successor Trustee may resign. The Chief Executive
Officer of the Corporation shall, upon removal or resignation of a
Trustee, appoint a successor Trustee.
The Trustee's accounts, books, and records relating to the Trust may
be audited annually by auditors selected by the Chief Executive
Officer of the Corporation.
The Trustee's fee shall be paid by the Trustee out of the funds of the
Trust, unless paid by the Corporation in its discretion. Brokerage
fees, asset management fees, investment management fees and other
direct costs of investment, taxes (including interest and penalties),
and administrative expenses of the Plan shall be paid by the Trustee
out of the funds of the Trust to which such costs are attributable,
unless paid by the Corporation in its discretion.
<PAGE> 30
ARTICLE VI
INVESTMENT, PARTICIPANT'S ACCOUNTS, AND VOTING OF STOCK
6.1 Investment of Contributions.
(a) A Participant's Contributions during each Plan Year shall be
invested in the Investment Funds in accordance with the
Participant's allocations under Section 3.4; provided, however
that a Participant's allocations under the prior version of
the Plan or under the KCTC Salaried Plan shall be carried
forward as set forth in this Plan. A Participant's interest
arising from his reallocation for prior Plan Years shall be
invested in the Investment Funds in accordance with the
Participant's directions under Section 3.8. Company Matching
Contributions during each Plan Year shall be invested in the
K-C Stock Fund. All such investments and gains or losses
related thereto shall be allocated to each Participant's
Accounts pursuant to the provisions of Section 6.2.
(b) The Committee shall designate Participant's Contributions and
Company Matching Contributions for payment to the Trustee for
investment, and Employee Accounts and Employer Accounts for
reallocation in accordance with subsection 6.1(a), and shall
advise the Trustee of such designation.
6.2 Participant's Accounts.
(a) Establishment of Accounts. Each Participant shall have
established and maintained for him separate Accounts which,
depending upon the allocation and reallocation options he has
selected, shall consist of Employee Accounts and Employer
Accounts in one or more of the Money Market Fund, the Stable
Income Fund, the Bond Index Fund, the Medium-Term Managed
Fund, the Long-Term Managed Fund, the Stock Index Fund, the
Growth Stock Fund, the International Index Fund, the K-C Stock
Fund and the SMI Stock Fund. Each such Employee Account shall
be subdivided into a Basic After-Tax Contributions Section, a
Before-Tax Contributions Section, and an Unrestricted
After-Tax Contribution Section. Each such Employer Account
shall be subdivided into subsections corresponding to the
Sections of Employee Accounts, other than the Unrestricted
After-Tax Contribution Section.
As soon as practicable following the end of each calendar
quarter, the Committee will cause an annual statement to be
prepared for each Participant which will reflect the status of
the Participant's Accounts in such form as shall be prescribed
by the Committee.
(b) Crediting of Accounts. As of the close of business on each
Valuation Date the designated Accounts of each Participant
shall be appropriately credited with the amounts of his
Contributions and Contributions made on his behalf on that
Valuation Date, or the reallocation or transfer of his other
Accounts, if any,
<PAGE> 31
effective on that Valuation Date and his Employer Account in
the K-C Stock Fund shall be credited with the amount of any
Company Matching Contributions made with respect to him on
that Valuation Date.
(c) Valuation of Accounts. Each Participant's Accounts shall be
valued and adjusted each Business Day to preserve for each
Participant his proportionate interest in the related funds
and reflect the effect of income, collected and accrued,
realized and unrealized profits and losses, expenses,
valuation adjustments, and all other transactions with respect
to the related fund as follows:
(i) The Current Market Value of the assets held in each
of the funds shall be determined by the Trustee, and
(ii) The separate balances provided for in subsection
6.2(b) of each Participant's Account under each of
the related funds shall be adjusted by multiplying by
the ratio that the Current Market Value of such fund
as determined under subsection 6.2(c)(i) bears to the
aggregate of the Account balances under such fund.
6.3 Stock Rights, Stock Splits and Stock Dividends. A Participant shall
have no right of request, direction or demand upon the Committee or
the Trustee to exercise in his behalf rights to purchase shares of
Corporation Stock or other securities of the Corporation. The
Trustee, at the direction of the Committee, shall exercise or sell any
rights to purchase shares of Corporation Stock appertaining to shares
of such stock held by the Trustee and shall sell at the direction of
the Committee any rights to purchase other securities of the
Corporation appertaining to shares of Corporation Stock held by the
Trustee. The Accounts of Participants shall be appropriately
credited. Shares of Corporation Stock or SMI Stock received by the
Trustee by reason of a stock split or a stock dividend shall be
appropriately allocated to the Accounts of the Participants.
6.4 Voting of Corporation Stock. A Participant (or in the event of his
death, his Beneficiary) may direct the voting at each annual meeting
and at each special meeting of the stockholders of the Corporation of
that number of whole shares of Corporation Stock held by the Trustee
and attributable to the balances in his K-C Stock Fund Account as of
the Valuation Date coincident with the record date for such meeting.
Each such Participant (or Beneficiary) will be provided with copies of
pertinent proxy solicitation material together with a request for his
instructions as to how such shares are to be voted. The Committee
shall direct the Trustee to vote such shares in accordance with such
instructions and shall also direct the Trustee how to vote any shares
of Corporation Stock at any meeting for which it has not received, or
is not subject to receiving, such voting instructions.
Notwithstanding the foregoing, a Participant's (or Beneficiary's)
voting instructions shall apply to the balances in the K-C Stock Fund
Accounts for all plans maintained by an Employer in which he
participates.
6.5 Voting of SMI Stock. The Trustee shall appoint a proxy committee (the
"Proxy Committee") to direct the voting at each annual meeting and at
each special meeting of the stockholders of SMI of that number of
whole shares of SMI Stock held by the Trustee
<PAGE> 32
in the SMI Stock Fund. The Proxy Committee shall direct the Trustee
to vote such shares in accordance with its instructions. The Proxy
Committee shall direct the Trustee on how to respond to a tender or
exchange offer for any or all shares of SMI Stock held by the Trustee
in the SMI Stock Fund, and the Trustee shall act only in accordance
with such directions.
6.6 Tender Offers. A Participant (or in the event of his death, his
Beneficiary) may direct the Trustee in writing how to respond to a
tender or exchange offer for any or all whole shares of Corporation
Stock held by the Trustee and attributable to the balances in his K-C
Stock Fund Account as of the Valuation Date coincident with such
offer. The Committee shall notify each Participant (or Beneficiary)
and exert its best efforts to timely distribute or cause to be
distributed to him such information as will be distributed to
stockholders of the Corporation in connection with any such tender or
exchange offer. Upon receipt of such instructions, the Trustee shall
tender such shares of Corporation Stock as and to the extent so
instructed. If the Trustee shall not receive instructions from a
Participant (or Beneficiary) regarding any such tender or exchange
offer for such shares of Corporation Stock (or shall receive
instructions not to tender or exchange such shares), the Trustee shall
have no discretion in such matter and shall take no action with
respect thereto. With respect to shares of Corporation Stock in the
K-C Stock Fund for which the Trustee is not subject to receiving such
instructions, however, the Trustee shall tender such shares in the
same ratio as the number of shares for which it receives instructions
to tender bears to the total number of shares for which it is subject
to receiving instructions, and shall have no discretion in such matter
and shall take no action with respect thereto other than as
specifically provided in this sentence. Notwithstanding the foregoing,
a Participant's (or Beneficiary's) voting instructions shall apply to
the balances in the K-C Stock Fund Accounts for all plans maintained
by an Employer in which he participates.
<PAGE> 33
ARTICLE VII
DISTRIBUTION OF ACCOUNTS
7.1 Accounts to be Distributed.
(a) Termination On or After Attainment of Age 55. If a
Participant's employment with an Employer is terminated on or
after his attainment of age 55, he shall be fully vested in
his Accounts and shall be entitled to receive a distribution
of the entire amount then in his Accounts in accordance with
Section 7.7. Notwithstanding the foregoing, if a Participant
is determined by the Committee to be Totally and Permanently
Disabled on or before October 31, 1996 under the prior version
of the Plan and has less than 5 Years of Service, such
Participant shall be fully vested in his Accounts.
(b) Termination Upon Death. In the event that the termination of
employment of a Participant is caused by his death, or a
Terminated Participant dies prior to the first day on which
such Terminated Participant's Accounts are payable, the entire
amount then in his Accounts shall be paid to his Beneficiary
in accordance with Section 7.7 after receipt by the Committee
of acceptable proof of death.
(c) Termination As a Result of Group Termination. In the event
that the termination of employment of a Participant is caused
by reason of his status as a member of a group involved in a
group termination, he shall be entitled to receive a
distribution of the entire amount then in his Accounts in
accordance with Section 7.7, unless action is taken pursuant
to the Plan to segregate the Accounts of all the Participants
in such group from the Trust and arrange for a transfer to or
a merger with a qualified successor plan or trust with respect
thereto. Notwithstanding the foregoing, this subsection
7.1(c) shall not apply after October 31, 1996.
(d) Termination for Other Reasons. If a Participant's employment
with an Employer is terminated for any other reason, the
Participant shall be entitled to the entire amount in his
Employee Accounts and a portion of his Employer Accounts as
determined in accordance with the following schedule:
<TABLE>
<CAPTION>
Vested Forfeited
Years of Service Percentage Percentage
---------------- ---------- ----------
<S> <C> <C>
Less than 5 0% 100%
5 or more 100% 0%
</TABLE>
Notwithstanding any other provision of this Section 7.1, a
KCTC Heritage Employee shall be fully vested in his Accounts
upon becoming a Participant as of January 1, 1997, and shall
be entitled to receive a distribution of the entire amount in
his Accounts in accordance with Section 7.7.
<PAGE> 34
In the event that the termination of employment of a
Participant is caused by any reason other than the Employee
quits, is discharged, retires or dies, the Participant will be
deemed to have a 12 month period of absence following the date
of such termination of employment, for purposes of determining
the portion of his Employer Accounts which such Participant
shall be entitled to receive in a distribution in accordance
with this subsection.
In the event that the Plan is amended to change the vesting
provisions set forth in this subsection 7.1(c), a Participant
with 3 or more years of Service may elect to have the vested
percentage of the Participant's Employer Accounts determined
pursuant to the vesting provisions in effect prior to the
amendment.
(e) Deferred Distributions. Notwithstanding anything in this
Article VII to the contrary, if the aggregate value of the
Accounts of any Participant exceeds $5,000 as provided under
Code section 411(a)(11), an immediate distribution shall not
be made without the consent of the Participant. A Participant
who fails to consent to a distribution under this subsection
7.1(e) shall continue to participate as a Terminated
Participant and shall be entitled to a distribution of his
Employee Accounts and the vested percentage of his Employer
Accounts. Upon Timely Notice of request for payment, the
Terminated Participant's Employee Accounts and the vested
percentage of his Employer Accounts shall be distributed in
accordance with the provisions of Section 7.7.
7.2 Timing of Distributions. A Participant's election to receive a
distribution of his Accounts shall be effective as soon as practicable
following Timely Notice and the amount of the distribution shall be
determined by the value of the Participant's interest in any
Investment Fund as of the Valuation Date of the distribution. Any
forfeiture with respect to the Accounts of the Participant or
Terminated Participant shall be determined as of the Valuation Date
coincident with such Participant's or Terminated Participant's
termination of employment. Distribution of a Participant's Accounts
shall be made to him or to his Beneficiary after the termination of
his employment and within 60 days following his request for a
distribution.
7.3 Certain Definitions Relating to Distributions and Withdrawals. The
following are forms of distribution under the Plan:
(a) All Stock Distribution. An All Stock Distribution of a
Participant's Accounts shall mean a single distribution as of
the Valuation Date consisting of full shares of Corporation
Stock attributable to the Participant's Employee Accounts and
to the vested percentage of his Employer Accounts, together
with the cash equivalent of the Current Market Value on the
Valuation Date of fractional shares of such stock attributable
to such Accounts.
(b) Stock and Cash Distribution. A Stock and Cash Distribution of
a Participant's Accounts shall mean a single distribution
consisting of:
<PAGE> 35
(i) the cash equivalent of the Current Market Value on
the Valuation Date of the Participant's Employee
Accounts, except his Employee Account in the K-C
Stock Fund, and the vested percentage of his Employer
Accounts, except his Employer Account in the K-C
Stock Fund, and
(ii) full shares of Corporation Stock on the Valuation
Date, attributable to the Participant's Employee
Account in the K-C Stock Fund and to the vested
percentage of his Employer Account in the K-C Stock
Fund, together with the cash equivalent of the
Current Market Value on the Valuation Date of
fractional shares of such stock attributable to such
Accounts, and
(iii) the cash equivalent of any other interest
attributable to the Participant's Accounts, except
the forfeited percentage of his Employer Accounts, on
the Valuation Date.
(c) All Cash Distribution. An All Cash Distribution of a
Participant's Accounts shall mean the same as a Stock and Cash
Distribution, as defined in subsection 7.3(b), except that
clause (ii) in said subsection shall be replaced by the
following clause:
(ii) the cash equivalent of the Current Market Value as of
the Valuation Date of all the shares and fractional
shares of Corporation Stock attributable to the
Participant's Employee Account in the K-C Stock Fund
and to the vested percentage of his Employer Account
in the K-C Stock Fund.
(d) Installment Distribution. An Installment Distribution shall
mean the cash equivalent of the Current Market Value of the
Participant's vested percentage of his Accounts on the
Valuation Date, paid monthly in cash for a period elected by
the Participant, which elected period shall not exceed the
lesser of 20 years or the Participant's life expectancy at the
time such Installment Distribution is to commence. The value
of each payment shall be determined on a declining balance
method. Notwithstanding the foregoing provisions of Section
7.3(d), a KCTC Heritage Employee may elect to receive an
Installment Distribution on the same basis as a Stock and Cash
Distribution or All Cash Distribution and to be paid monthly
or annually.
Prior to the distribution of the final payment of an
Installment Distribution, a Participant may elect:
(i) to receive the remaining balance in his Accounts as a
Lump Sum Distribution;
(ii) to change the elected period of the Installment
Distribution; or
(iii) to receive a Partial Distribution from the remaining
balance in his Accounts.
<PAGE> 36
(e) Minimum Return Joint & Survivor Annuity Distribution. A
Participant who elects a Minimum Return Joint & Survivor
Annuity Distribution shall have an annuity purchased for him
from an insurance company, the value of which shall be
determined by the Current Market Value of the Participant's
Employee Accounts and the vested percentage of his Employer
Accounts on the Valuation Date. The following types of
Minimum Return Joint and Survivor Annuity Distribution may be
elected:
(i) 100% Joint & Survivor Annuity Distribution. A 100%
Joint & Survivor Annuity Distribution shall mean a
reduced monthly distribution payable for the
Participant's life, provided however, that the same
amount of such reduced distribution is payable to the
Participant's Beneficiary for the Beneficiary's life,
after the death of the Participant.
(ii) 50% Joint & Survivor Annuity Distribution. A 50%
Joint & Survivor Annuity Distribution shall mean a
reduced monthly distribution payable for the
Participant's life, provided however, that one-half
of the amount of such reduced distribution is payable
to the Participant's Beneficiary for the
Beneficiary's life, after the death of the
Participant.
For purposes of subsections 7.3(e)(i) and 7.3(e)(ii), upon the
death of the designated Beneficiary, the remainder, if any, of
the total amount in the Participant's Accounts on the
Valuation Date which exceeds the aggregate of all payments
made to the Participant and Beneficiary shall be paid to the
estate of the Beneficiary as a Lump Sum Distribution in the
form of an All Cash Distribution.
(f) Minimum Return Single-Life Annuity Distribution. A Participant
who elects a Minimum Return Single-Life Annuity Distribution
shall have an annuity purchased for him from an insurance
company, the value of which shall be determined by the Current
Market Value of the Participant's Employee Accounts and the
vested percentage of his Employer Accounts on the Valuation
Date. A Minimum Return Single-Life Annuity Distribution shall
mean a monthly distribution payable for the Participant's
life, provided however, that upon the death of the
Participant, the remainder, if any, of the total amount in the
Participant's Accounts on the Valuation Date which exceeds the
aggregate of all payments made to the Participant shall be
paid to the Participant's Beneficiary as a Lump Sum
Distribution in the form of an All Cash Distribution.
(g) Period Certain Annuity Distribution. A Participant who elects
a Period Certain Annuity Distribution shall have an annuity
purchased for him from an insurance company, the value of
which shall be determined by the Current Market Value of the
Participant's Employee Accounts and the vested percentage of
his Employer Accounts on the Valuation Date. A Period Certain
Annuity Distribution shall mean a monthly distribution payable
for a period certain elected by the Participant, which elected
period shall not exceed the lesser of (i) 240 months or (ii)
the Participant's life expectancy at the time such payments
are to commence;
<PAGE> 37
provided however, that such monthly payments are payable to
the Participant's Beneficiary for the remainder of the elected
period, if any, upon the death of the Participant.
(h) Period Certain and Continuous Annuity Distribution. A
Participant who elects a Period Certain and Continuous Annuity
Distribution shall have an annuity purchased for him from an
insurance company, the value of which shall be determined by
the Current Market Value of the Participant's Employee
Accounts and the vested percentage of his Employer Accounts on
the Valuation Date. A Period Certain and Continuous Annuity
Distribution shall mean a monthly distribution payable for the
Participant's life; provided however, that such monthly
payments are payable to the Participant's Beneficiary for the
remainder of the elected period, if any, upon the death of the
Participant. The elected period shall not exceed the lesser
of 240 months or the Participant's life expectancy at the time
such payments are to commence.
7.4 Lump Sum and Partial Distributions. A Lump Sum Distribution or a
Partial Distribution may be elected by any Participant in the form of
an All Cash Distribution, a Stock and Cash Distribution or an All
Stock Distribution.
7.5 Installment Distributions. An Installment Distribution may be elected
by any Participant who has reached age 55 or by an eligible KCTC
Heritage Employee who is determined to be Totally and Permanently
Disabled on or before January 1, 1997 under the terms of the KCTC
Salaried Plan. The Beneficiary or former spouse or child who is
designated as an alternate payee under a Qualified Domestic Relations
Order of a Participant who is eligible to elect an Installment
Distribution may elect to receive an Installment Distribution.
7.6 Annuity Forms of Distribution. A Minimum Return Joint & Survivor
Annuity Distribution, Minimum Return Single-Life Annuity
Distribution, Period Certain Annuity Distribution, or Period Certain
and Continuous Annuity Distribution may be elected only by a KCTC
Heritage Employee who was employed by Scott Paper Company on or before
July 1, 1993.
7.7 Methods of Distribution.
(a) Distribution by Reason of Death. The Beneficiary of a
Participant to which subsection 7.1(b) applies shall be
entitled to receive a distribution of such Participant's
Accounts in the form elected by the Participant in the
appointment of his Beneficiary. If no such election was made,
such distribution shall be in any form available pursuant to
the terms of the Plan as elected by the Beneficiary. If a
Participant designates a Beneficiary other than his spouse at
the time of such designation, such designation shall not be
valid unless:
(i) the spouse of such Participant consents in writing to
each such election or designation and acknowledges
its effect, and
<PAGE> 38
(ii) such consent is witnessed by a notary public.
No spousal consent described in the immediately preceding
sentence need be furnished, however, with respect to any
election or designation if the Committee is satisfied that
there is no spouse, that the spouse cannot be located, or that
such consent is unobtainable for any other reason provided
under regulations of the Internal Revenue Service.
(b) Distribution Upon Termination of Employment for Reasons Other
than Death. A Participant who is entitled to receive a
distribution of his Accounts due to the termination of his
employment for any reason specified in Section 7.1, except
death, may on Timely Notice elect to receive such distribution
in the form of an All Stock Distribution, a Stock and Cash
Distribution or an All Cash Distribution or, if eligible under
Section 7.5, an Installment Distribution, at any time.
(c) Small Distributions. Notwithstanding any provision of this
Section 7.7 to the contrary, if the aggregate value of a
Participant's Accounts does not exceed $5,000 as provided
under Code section 411(a)(11), the Committee shall direct the
distribution of the Accounts of any Participant as an All
Stock Distribution, a Stock and Cash Distribution or an All
Cash Distribution as elected by the Participant or his
Beneficiary. If no earlier election is made, Timely Notice of
a request for payment shall be deemed to have been given as of
the Valuation Date which is three months following notice of
the Participant's entitlement to a distribution under Section
7.1, and such distribution shall be in the form of an All Cash
Distribution.
(d) Additional Requirements for Annuity Forms of Distribution
Applicable to Certain KCTC Heritage Employees.
Notwithstanding any provision of this Section 7.7 to the
contrary, none of the forms of distribution described in
Section 7.6 may be elected if such form of distribution would
result in the present value of all benefits to be distributed
to the Participant being less than 50 percent of the present
value of all benefits to be distributed, (i) unless the
designated Beneficiary is the Participant's spouse, and (ii)
if the Participant designates a Beneficiary to receive
survivor benefits in the event of the Participant's death
under any of the foregoing forms, such designation must be
made in accordance with the provisions of subsection 7.7(a).
Notwithstanding any provision of the Plan to the contrary, if
a Participant elects an annuity form of distribution under
subsections 7.3(e), 7.3(f), 7.3(g) or 7.3(h), the Plan
Administrator shall furnish to the Participant, no less than
30 days and no more than 90 days prior to his Annuity Starting
Date (and consistent with such regulation as may be issued
under Code section 417(a)(3)(A)), a written explanation of the
terms and conditions of electing a Minimum Return Joint &
Survivor Annuity Distribution, Minimum Return Single-Life
Annuity Distribution, Period Certain Annuity Distribution or
Period Certain and Continuous Annuity Distribution with his
then spouse as the contingent annuitant, and the attempted
election by a married Participant of an annuity form of
distribution other than a
<PAGE> 39
50% Minimum Return Joint and Survivor Annuity Distribution
("Qualified Joint and Survivor Benefit") with this then spouse
as the sole contingent annuitant, shall not be effective
unless the consent of his spouse is obtained in the same
manner and to the same extent as would be required under
subsection 7.7(a). If the Participant affirmatively elects to
receive a distribution and has obtained appropriate spousal
consent pursuant to this Section, the Participant's
distribution may commence earlier than 30 days after providing
the Participant with such written explanation. An election not
to take a Qualified Joint and Survivor Benefit, or a change in
or revocation of any such election, may be made at any time
during an election period beginning 90 days before the
Participant's (i) Annuity Starting Date or (ii) the end of the
7-day period after the Participant is provided with such
written explanation. The Annuity Starting Date may be prior to
the expiration of the 7-day period described above, but not
earlier than the date the Participant is provided with the
written explanation. Notwithstanding the foregoing, payment
of the distribution may commence as of the Annuity Starting
Date, but shall not actually be paid prior to the expiration
of the 7-day period described herein.
7.8 Miscellaneous.
(a) For the purpose of the Plan, no termination of employment will
be deemed to have occurred in any instance where the person
involved remains in Service or is re-employed by an Employer
prior to receiving a distribution of his Accounts.
(b) In the event of the death, prior to his receipt of a
distribution, of a Participant who at the time of his death
was entitled to receive distribution under subsection 7.7(b)
and elected to receive such distribution in the form of an All
Stock Distribution, a Stock and Cash Distribution, an All Cash
Distribution, or an Installment Distribution, if eligible
under Section 7.5, or was entitled to receive a distribution
under subsection 7.7(c), and if the Committee has notice of
the Participant's death prior to such distribution, then such
distribution shall be made to the Participant's Beneficiary by
the same method as it would have been made to the Participant
but for his death.
(c) Notwithstanding anything in this Article VII to the contrary,
the distribution provisions of this Article VII shall not
apply for Terminated Participants or Participants whose
qualified domestic relations order is pending approval by the
Plan Administrator.
7.9 Required Distributions.
(a) Notwithstanding any provision of the Plan to the contrary, a
Participant's or Terminated Participant's Accounts shall be
distributed commencing no later than the earlier of:
(i) April 1 of the calendar year following the
year in which the Participant or Terminated
Participant attains age 70-1/2, except to the
<PAGE> 40
extent that Section 1121(d)(4) of the Tax Reform Act
of 1986 provides otherwise, or
(ii) unless the Participant elects a later date (which can
be no later than the date specified in (i) above),
the 60th day after the latest of:
(A) the close of the Plan Year in which the
Participant attains age 65,
(B) the close of the Plan Year which includes the
date 10 years after the date the Participant
first commenced participating in the Plan, or
(C) the close of the Plan Year in which the
Participant terminated employment with his
Employer.
(b) All distributions from the Plan shall be made in accordance
with the requirements of Code section 401(a)(9) and the
regulations thereunder, including the minimum distribution
incidental benefit requirements.
(c) The Committee may, in its discretion, establish procedures for
making such required distributions consistent with the
provisions hereof.
7.10 Unclaimed Benefits. During the time when a benefit hereunder is
payable to any Terminated Participant or, if deceased, his
Beneficiary, the Committee shall mail by registered or certified mail
to such Participant or Beneficiary, at his last known address, a
written demand for his then address, or for satisfactory evidence of
his continued life, or both. If such information is not furnished to
the Committee within 12 months from the mailing of such demand, then
the Committee may, under rules established by the Committee, in its
sole discretion, declare such benefit, or any unpaid portion thereof,
suspended, with the result that such unclaimed benefit shall be
treated as a forfeiture for the Plan Year within which such 12-month
period ends, but shall be subject to restoration through an Employer
Contribution if the lost Participant or such Beneficiary later files a
claim for such benefit.
7.11 Brown-Bridge Benefit. Notwithstanding any other provision of the
Plan, if a Participant's employment with an Employer is terminated, he
shall be fully vested in his Accounts and shall be entitled to receive
a distribution of the entire amount then in his Accounts in accordance
with Section 7.7. if such Participant meets all of the following
conditions:
(a) immediately prior to his termination of employment he must
have been an Employee of the Brown-Bridge Mill; and
(b) such termination of employment must be involuntary on the part
of the Participant, be caused solely by the elimination of his
job function with the Corporation due to the sale of assets of
the Brown-Bridge Mill under the Assets Purchase Agreement
entered into between the Corporation and Brown-Bridge
<PAGE> 41
Acquisition Corp. dated June 15, 1994, and such termination of
employment must occur on the Closing Date of such Assets
Purchase Agreement.
7.12 Karolton Envelope Benefit. Notwithstanding any other provision of the
Plan, if a Participant's employment with an Employer is terminated, he
shall be fully vested in his Accounts and shall be entitled to receive
a distribution of the entire amount then in his Accounts in accordance
with Section 7.7. if such Participant meets all of the following
conditions:
(a) immediately prior to his termination of employment he must
have been an Employee of Karolton Envelope; and
(b) such termination of employment must be involuntary on the part
of the Participant, be caused solely by the elimination of his
job function with the Corporation due to the sale of assets of
Karolton Envelope under the Assets Purchase Agreement entered
into between the Corporation and KECA Corporation dated
October 29, 1993, and such termination of employment must
occur on the Closing Date of such Assets Purchase Agreement.
7.13 Spenco Medical Corporation Benefit. Notwithstanding any other
provision of the Plan, a Participant shall be fully vested in his
Accounts and shall be entitled to receive a distribution of the entire
amount then in his Accounts in accordance with Section 7.7. if such
Participant is employed by Spenco Medical Corporation on the Closing
Date of the sale of Spenco Medical Corporation under the Agreement and
Plan of Merger entered into between the Corporation and Spenco Medical
Corporation, SBS Enterprises, Inc., Spenco Acquisition Corporation and
Steven B. Smith, dated March 4, 1994. For purposes of this Section, a
Participant described in the preceding sentence shall be treated under
Section 7.7 as if he terminated employment with an Employer for a
reason other than death on the Closing Date; provided, however, that a
distribution pursuant to this Section shall be delayed to the extent
required by the Internal Revenue Service under section
401(k)(2)(B)(i)(I) of the Code.
7.14 Form of ESOP Benefit. Notwithstanding anything in the Plan to the
contrary but subject to the provisions of Sections 7.7 (c) and 7.9,
the form of benefit payment available to a Participant, unless the
Participant elects otherwise, shall be substantially equal periodic
payments (not less frequently than annually) over a period not longer
than the greater of (i) five (5) years, or (ii) in the case of a
Participant whose vested portion of his Accounts exceeds $500,000 (as
adjusted by legislation or for cost-of-living increases), five (5)
years plus one (1) additional year (not exceeding five (5) additional
years) for each $100,000 (or fraction of $100,000) (as adjusted by
legislation or for cost-of-living increases) by which the vested
portion of his Accounts exceeds $500,000 (as adjusted by legislation
or for cost-of-living increases).
7.15 ESOP Dividend Distributions. Dividends paid to the Trust that had
dividend record dates during a Plan Year on Corporation Stock
allocated to a Participant's Accounts shall be paid to that
Participant, or if applicable, to his Beneficiary, in the first
quarter of the Plan Year following the Plan Year in which the
dividends' record dates occurred; provided,
<PAGE> 42
however that the amount of such dividend payment shall not be less
than the minimum amount established by the Committee in its sole
discretion. Notwithstanding the preceding sentence, in the last
quarter of each Plan Year, a Participant who is employed by an
Employer or an affiliate of an Employer on the last day of that Plan
Year may elect to have 25%, 50%, 75%, or all of such dividend payments
remain in the Trust in lieu of a distribution under this Section;
provided, however, that in the last quarter of 1996, a Participant
who, at the time of election under this Section, had terminated
employment as described in Section 7.23 but who is employed by
American Tissue Mills of Neenah, L.L.C. on the last day of the Plan
Year, may make a one-time election to have 25%, 50%, 75%, or all of
such dividend payments allocated to the Participant's Accounts in 1996
remain in the Trust in lieu of distribution under this Section.
Dividends retained in the Trust under this Section shall be invested
as directed by the Participant under Section 3.8. Notwithstanding
both the dollar amount (if any) of any election under this Section and
the preceding provisions of this Section, the amount actually paid
under this Section shall not exceed the lesser of (i) the electing
Participant's share of the dividends subject to such election and (ii)
his balance in his Accounts at the time of payment. A dividend
payment shall not be made to a Terminated Participant or Participant
whose qualified domestic relations order is pending approval by the
Plan Administrator.
7.16 Memphis Mill Benefit. Notwithstanding any other provision of the
Plan, if a Participant's employment with an Employer is terminated, he
shall be fully vested in his Accounts and shall be entitled to receive
a distribution of the entire amount then in his Accounts in accordance
with Section 7.7. if such Participant meets all of the following
conditions:
(a) immediately prior to his termination of employment he must
have been an Employee of the Memphis Mill; and
(b) such termination of employment must be involuntary on the part
of the Participant and be caused solely by the elimination of
his job function with the Corporation due to the sale of
assets of the Memphis Mill under the Assets Purchase Agreement
entered into between the Corporation and Shepherd Tissue,
Inc., and such termination of employment must occur on or
after the Closing Date of such Assets Purchase Agreement.
7.17 Kimberly-Clark Integrated Services Corporation Benefit.
Notwithstanding any other provision of the Plan, if a Participant's
employment with an Employer is terminated, he shall be fully vested in
his Accounts and shall be entitled to receive a distribution of the
entire amount then in his Accounts in accordance with Section 7.7. if
such Participant meets all of the following conditions:
(a) immediately prior to his termination of employment he must
have been an Employee of Kimberly-Clark Integrated Services
Corporation; and
(b) such termination of employment must be involuntary on the part
of the Participant, be caused solely by the elimination of his
job function with Kimberly-Clark Integrated Services
Corporation due to the cessation of operations of
Kimberly-Clark Integrated Services Corporation on or about
June 30, 1995, and
<PAGE> 43
such termination of employment must occur on or after the date
of such cessation of operations.
7.18 Direct Rollovers. This Section applies to distributions and
withdrawals made under Articles VII and VIII on or after January 1,
1993. Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a distributee's election under this Section, a
distributee may elect, at the time and in the manner prescribed by the
Committee, to have any portion of an eligible rollover distribution
paid directly to a single eligible retirement plan specified by the
distributee in a direct rollover.
For purposes of this Section, the following definitions shall apply:
(a) An "eligible rollover distribution" is any distribution of all
or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution
does not include: any distribution that is one of a series of
substantially equal periodic payments (not less frequently
than annually) made for the life (or life expectancy) of the
distributee and the distributee's designated beneficiary, or
for a specified period of ten years of more; any distribution
to the extent that such distribution is required under Code
section 401(a)(9); and the portion of any distribution that is
not includable in gross income (determined without regard to
the exclusion for net unrealized appreciation with respect to
employer securities).
(b) An "eligible retirement plan" is an individual retirement
account described in Code section 408(a), an individual
retirement annuity described in Code section 408(b), an
annuity plan described in Code section 403(a), or a qualified
trust described in Code section 401(a), that accepts the
distributee's eligible rollover distribution. However, in the
case of an eligible rollover distribution to the surviving
spouse, an eligible retirement plan is limited to an
individual retirement account or individual retirement
annuity.
(c) A "distributee" includes a Participant. In addition, the
Participant's surviving spouse and the Participant's spouse or
former spouse who is the alternate payee under a qualified
domestic relations order, as defined in Code section 414(p),
are distributees with regard to the interest of the spouse or
former spouse.
(d) A "direct rollover" is a payment by the Plan to the eligible
retirement plan specified by the distributee.
This Section shall not be construed to alter any of the requirements
for distributions or withdrawals under the remaining provisions of
this Article VII and the provisions of Article VIII.
7.19 Specialty Products Benefit. Notwithstanding any other provision of
the Plan, if a Participant's employment with an Employer is
terminated, he shall be fully vested in his Accounts and shall be
entitled to receive a distribution of the entire amount then in his
Accounts in accordance with Section 7.7 if such Participant meets all
of the following conditions:
<PAGE> 44
(a) immediately prior to his termination of employment, he must
have been an Employee whose employment duties are principally
related to the Specialty Products business of the Corporation;
(b) such termination of employment must be involuntary on the part
of the Participant, be caused solely by the elimination of his
job function with the Corporation due to the spinoff of SMI on
or about the fourth quarter of 1995, and such termination of
employment must occur on or after the SMI Distribution Date;
and
(c) immediately following his termination of employment, he must
have become employed by SMI.
7.20 Midwest Express Airlines Benefit. Notwithstanding any other provision
of the Plan, a Participant shall be fully vested in his Accounts as of
the date on which he ceases to be an Eligible Employee under the Plan,
if such Participant meets all of the following conditions:
(a) immediately prior to the date of the closing (the "Closing
Date") of the sale of a majority of the stock of Midwest
Express Airlines, Inc. by the Corporation through K-C Nevada,
Inc. in an initial public offering (the "Midwest Express
Sale"), he must have been an Employee employed by an Employer;
and
(b) on or after the Closing Date but prior to December 31, 1995,
he must (i) have ceased to be an Eligible Employee solely on
account of the Midwest Express Sale and (ii) be employed by
Midwest Express Airlines, Inc. immediately after he ceases to
be an Eligible Employee hereunder.
A Participant who ceases to be an Eligible Employee under this Section
shall not be considered to have terminated employment for purposes of
the Plan; provided further that Sections 3.2 and 3.4 of the Plan shall
not apply to such Participant effective as of the date on which the
Participant ceases to be an Eligible Employee under this Section.
Unless distributed or withdrawn prior to July 31, 1996, the Accounts
of Participants who cease to be Eligible Employees under this Section
shall be transferred by the Trustee, for the benefit of such
Participants, to the trustee of the Midwest Express Airlines Savings
and Investment Plan. Such Accounts as of July 31, 1996 shall be valued
as of the date of transfer and delivered as soon as administratively
feasible thereafter, except that those Accounts invested in the K-C
Stock Fund and the SMI Stock Fund as of July 31, 1996 shall be
transferred in kind. Such transfer shall be made in accordance with
Article XIII of the Plan.
7.21 K-C Aviation/JPI Benefit. Notwithstanding any other provision of the
Plan, if a Participant's employment with an Employer is terminated, he
shall be fully vested in his Accounts and shall be entitled to receive
a distribution of the entire amount then in his Accounts in accordance
with Section 7.7. if such Participant meets all of the following
conditions:
<PAGE> 45
(a) immediately prior to his termination of employment he must
have been an Employee of K-C Aviation Inc. or Jet
Professionals, Inc.; and
(b) such termination of employment must be involuntary on the part
of the Participant, be caused solely by the elimination of his
job function with K-C Aviation Inc. or Jet Professionals, Inc.
due to the sale of assets of the aircraft chartering and
personnel placement businesses under the Assets Sale Agreement
entered into between K-C Aviation Inc. and Jet Aviation
Business Jets, Inc. dated July 18, 1996, and such termination
of employment must occur on the Closing Date of such Assets
Sale Agreement.
7.22 Limitations on Distribution of Before-Tax Contributions.
Notwithstanding any other provision of the Plan to the contrary,
Before-Tax Contributions and earnings thereon (except for the
withdrawal of earnings provided under subsection 8.3(b)) shall not be
distributed before one of the following events:
(a) the Eligible Employee's retirement, death, disability, or
separation from service, as provided under Code section 401(k)
and applicable regulations;
(b) the Eligible Employee's attainment of age 59 1/2 or the
Eligible Employee's hardship, as provided under Code section
401(k) and applicable regulations;
(c) the termination of the Plan without the establishment or
maintenance of a successor plan, as provided under Code
section 401(k) and applicable regulations;
(d) the date of the sale or other disposition by an Employer of
substantially all the assets used in a trade or business to an
unrelated corporation, but only with respect to an Eligible
Employee who continues employment with the acquiring
corporation, provided that the Employer continues to maintain
the plan after the sale or disposition and the acquiring
corporation does not maintain the plan after the sale or
disposition, in accordance with Code section 401(k) and
applicable regulations; or
(e) the date of the sale or other disposition by an Employer of
its interest in a subsidiary to an unrelated entity or
individual, but only with respect to an Eligible Employee who
continues employment with the acquiring corporation, provided
that the Employer continues to maintain the plan after the
sale or disposition and the acquiring corporation does not
maintain the plan after the sale or disposition, in accordance
with Code section 401(k) and applicable regulations.
7.23 Lakeview Benefit. Notwithstanding any other provision of the Plan, if
a Participant's employment with an Employer is terminated, he shall be
fully vested in his Accounts and shall be entitled to receive a
distribution of the entire amount then in his Accounts in accordance
with Section 7.7 if such Participant meets all of the following
conditions:
<PAGE> 46
(a) immediately prior to his termination of employment he must
have been an Employee at the Lakeview Mill, Lakeview Diaper
Plant, Lakeview Feminine Care Plant, Lakeview Distribution
Center, or Badger-Globe Mill; and
(b) such termination of employment must be involuntary on the part
of the Participant and be caused solely by the elimination of
his job function with the Corporation due to the sale of the
assets of the tissue manufacturing facilities of the Lakeview
Mill under the Assets Purchase Agreement entered into between
the Corporation and American Tissue Mills of Neenah L.L.C.
dated as of August 8, 1996, and such termination of employment
must occur on or within 30 days after the Closing Date of such
Assets Purchase Agreement.
7.24 Coosa Benefit. Notwithstanding any other provision of the Plan, if a
Participant's employment with an Employer is terminated, he shall be
fully vested in his Accounts and shall be entitled to receive a
distribution of the entire amount then in his Accounts in accordance
with Section 7.7 if such Participant meets all of the following
conditions:
(a) immediately prior to his termination of employment he must
have been (i) an Employee of Coosa Pines Golf Club Inc., or
(ii) an Employee of an Employer located at Coosa Pines,
Alabama; and
(b) such termination of employment must be involuntary on the part
of the Participant and be caused solely by the elimination of
his job function from his Employer due to the sale of the
assets of the Coosa pulp and newsprint mill facility and
woodlands under the Assets Purchase Agreement entered into
between the Corporation and Alliance Forest Products, Inc.
dated as of February 14, 1997, and such termination of
employment must occur on or within 30 days after the Closing
Date of such Assets Purchase Agreement.
7.25 KIMPAK(R) Benefit. Notwithstanding any other provision of the Plan,
if a Participant's employment with an Employer is terminated, he shall
be fully vested in his Accounts and shall be entitled to receive a
distribution of the entire amount then in his Accounts in accordance
with Section 7.7 if such Participant meets all of the following
conditions:
(a) immediately prior to his termination of employment he must
have been an Employee at the Badger-Globe Mill; and
(b) such termination of employment must be involuntary on the part
of the Participant and be caused solely by the elimination of
his job function with the Corporation due to the sale of
assets of the KIMPAK(R) product line under the Assets Purchase
Agreement entered into between the Corporation and National
Packaging Services Corporation dated as of September 30, 1996
and such termination of employment must occur on or within one
year after the Closing Date of such Assets Purchase Agreement.
<PAGE> 47
ARTICLE VIII
WITHDRAWALS AND LOANS
8.1 Regular Withdrawals. A Participant, subject to the conditions stated
below, may make the following Regular Withdrawals:
(a) Such amounts as the Participant may elect from the
Unrestricted After-Tax Contribution Section of his Accounts;
(b) Such amounts as the Participant may elect from the Basic
After-Tax Contribution Section of his Accounts;
(c) Such amounts as a Participant may elect from his Employer
Accounts, provided such amounts are vested and such amounts
(disregarding earnings and losses) have been in the Plan for
at least 24 months; and
(d) Such amounts as a KCTC Heritage Employee who has at least 5
Years of Service may elect from his KCTC Heritage Rollover
Account. Notwithstanding the foregoing, a KCTC Heritage
Employee who has less than 5 Years of Service may withdraw
Matching Employer Contributions (as such term is defined in
the KCTC Salaried Plan) from his KCTC Heritage Rollover
Account provided such amounts are vested and such amounts
(disregarding earnings and losses) have been in the Plan
(including periods under the KCTC Salaried Plan) for at least
24 months. A KCTC Heritage Employee who has less than 5 Years
of Service may withdraw Retirement Contributions (as such term
is defined in the KCTC Salaried Plan) provided such amounts
(disregarding earnings and losses) have been in the Plan
(excluding periods under the KCTC Salaried Plan) for at least
24 months. A KCTC Heritage Employee who has attained age 59
1/2 may withdraw any funds from his KCTC Heritage Rollover
Account provided such amounts are vested.
Any Participant not otherwise described above shall not be eligible to
make withdrawals from his Employer Accounts.
In the event of a Regular Withdrawal from the Basic After-Tax
Contribution section of a Participant's Accounts pursuant to
subsection 8.1(b), such Participant's Contributions under the Plan
shall be suspended for a period of 12 months following such
withdrawal.
8.2 Over Age 59 1/2 Withdrawals. A Participant who has attained age 59
1/2 may withdraw such amounts as he may elect from the Before-Tax
Contributions Sections of his Accounts.
8.3 Hardship Withdrawals.
(a) Upon the application of any Participant who has not attained
age 59 1/2, the Committee, in accordance with its uniform
nondiscriminatory rules, may permit
<PAGE> 48
such Participant to withdraw all or a portion (subject to
subsection (b) below) of the amount in the Before-Tax
Contributions Section of his Accounts if the Participant is
able to demonstrate financial hardship and provided, however,
that all amounts available as Regular Withdrawals described in
Section 8.1 shall first be withdrawn. A Participant shall be
considered to have demonstrated financial hardship only if the
Participant demonstrates that the purpose of the withdrawal is
to meet his immediate and heavy financial needs, the amount of
the withdrawal does not exceed such financial needs, and the
amount of the withdrawal is not reasonably available from
other resources. A Participant making application under this
Section 8.3 shall have the burden of demonstrating a financial
hardship to the Committee, and the Committee shall not permit
withdrawal under this subsection without first receiving such
proof.
The Participant will be deemed to have demonstrated that the
purpose of the withdrawal is to meet his immediate and heavy
financial needs only if he represents that the distribution is
on account of:
(i) medical expenses (as described in Code section
213(d)) incurred by the Participant, his spouse, or
any of his dependents, or necessary for such persons
to obtain medical care;
(ii) the purchase (excluding mortgage payments) of a
principal residence for the Participant;
(iii) the payment of tuition, related educational fees, and
room and board expenses for the next 12 months of
post-secondary education for the Participant, his
spouse, children, or dependents;
(iv) payments necessary to prevent eviction from or
foreclosure on the Participant's principal residence
or the mortgage on that residence; or
(v) any other condition determined by the Committee
pursuant to its uniform Committee Rules to represent
a financial hardship.
Moreover, the Participant will be deemed to have demonstrated
that the amount of the withdrawal is unavailable from his
other resources and in an amount not in excess of that
necessary to satisfy his immediate and heavy financial needs
only if each of the following requirements is satisfied:
(i) the Participant represents that the distribution is
not in excess of the amount of his immediate and
heavy financial needs, except that the withdrawal may
include any amounts necessary to pay any federal,
state, or local income taxes or penalties reasonably
anticipated to result from the withdrawal; and
(ii) the Participant has obtained all distributions, other
than hardship distributions, and all nontaxable loans
currently available to him under all
<PAGE> 49
other qualified and nonqualified deferred
compensation plans currently maintained by an
Employer.
In the event of any withdrawal by a Participant pursuant to
this Section 8.3, (i) such Participant's Contributions under
this Plan and his contributions under all other qualified and
nonqualified deferred compensation plans maintained by an
Employer shall be suspended for a period of 12 months
following such withdrawal, and (ii) for the calendar year
following the calendar year in which such withdrawal occurred,
the amount of the Participant's Before-Tax Contributions may
not exceed the limitation on the amount of Before-Tax
Contributions which may be contributed, as set forth in
subsection 3.5(a), less the amount of any Before-Tax
Contributions made by said Participant during the calendar
year of the withdrawal.
(b) No hardship withdrawal shall exceed the balance then credited
to the Participant's Before-Tax Contributions Section of his
Accounts (or, if less, the Current Market Value thereof) nor
shall any withdrawal include earnings on such Contributions
after December 31, 1988.
8.4 Distribution of Withdrawals.
(a) Regular Withdrawals and Over Age 59-1/2 Withdrawals. Regular
Withdrawals and Over Age 59-1/2 Withdrawals shall be permitted
as of any Valuation Date following Timely Notice. A
distribution of a withdrawal shall be made as soon as
practicable after the withdrawal request or such other time as
specified by Committee rule. A Participant who is entitled to
receive a Regular Withdrawal or an Over Age 59-1/2 Withdrawal
may on Timely Notice elect to receive such distribution in the
form of an All Stock Distribution, a Stock and Cash
Distribution or an All Cash Distribution.
(b) Hardship Withdrawals. If a Participant's application for a
hardship withdrawal is approved, the effective date for such
withdrawal shall be the Valuation Date coincident with or
immediately following such approval. If the Participant's
application for a hardship withdrawal is denied and, on
appeal, subsequently approved, the effective date for such
withdrawal shall be the Valuation Date coincident with or
immediately following the date of the Committee's decision on
the appeal. Hardship withdrawals will be made only in the
form of an All Cash Distribution.
8.5 Miscellaneous.
(a) Notwithstanding anything in this Article VIII to the contrary,
the withdrawal and loan provisions of this Article VIII shall
not apply for Terminated Participants or Participants whose
qualified domestic relations order is pending approval by the
Plan Administrator.
<PAGE> 50
(b) In the event of the death of a Participant on or after the
Valuation Date with respect to which the Participant has
elected to make a withdrawal, but prior to the actual
distribution thereof, and if the Committee has notice of the
Participant's death prior to such distribution, then such
distribution shall be made to the Participant's Beneficiary by
the same method as it would have been made to the Participant
but for his death.
8.6 Waiver of Right to Withdraw. A Participant who is on an assignment
outside of the United States may waive his right to make a withdrawal
pursuant to this Article VIII. Any such waiver shall be in writing,
in a form acceptable to the Committee and signed by the Participant,
and shall be irrevocable. The duration of a waiver hereunder may be
for a stated period or until the occurrence of a specified event, at
the election of the Participant, but in absence of such an election
the waiver shall expire upon termination or completion of the
Participant's assignment outside the United States.
8.7 Participant Loans. For purposes of this Section 8.7, "Participant"
shall mean a Participant who is a "party in interest" as defined in
ERISA section 3(14). Loans shall be available to Participants on a
reasonably equivalent basis on the following conditions:
(a) A Participant may, on Timely Notice, request a loan from the
Plan under the following terms and conditions, provided that
such Participant may not request a loan from the Plan if the
Participant has an outstanding loan (whether such outstanding
loan has become a deemed distribution under Section 72(p) of
the Code) from the Plan at the time of such request.
(b) Loan amounts shall be at least $1,000 and shall not exceed the
lesser of (i) 50% of Before-Tax Contributions Section of the
Participant's Account as of the date of the loan request, less
any amounts payable for pending withdrawal or (ii) $50,000
(reduced by the highest outstanding loan balance under the
Plan during the one-year period ending on the day before the
date on which the loan is made). Loans under any other
qualified plan sponsored by the Employer or an Affiliated
Employer shall be aggregated with loans under the Plan in
determining whether or not the limitation stated herein has
been exceeded. Loan amounts shall be taken from the
Before-Tax Contributions Section of the Participant's
Accounts.
(c) Loans shall be classified as either a General Purpose Loan or
a Primary Residence Loan.
(i) A General Purpose Loan may be requested on Timely
Notice for any purpose other than for the purchase of
a primary residence for the Participant. General
Purchase Loans shall be for a term not to exceed 4
years from the date of the loan.
(ii) A Primary Residence Loan may be requested on Timely
Notice for the purchase (excluding mortgage payments)
or construction of a Participant's primary residence
and may be made only upon receipt of proper
<PAGE> 51
documentation from the Participant. Primary
Residence Loans shall be for a term not to exceed 10
years from the date of the loan.
(d) Loans shall be nonrenewable and nonextendable. Loans shall be
repaid, through payroll deduction or, in the case of a
Participant who is on an unpaid leave of absence and who does
not elect to suspend his loan payments hereunder, by manual
repayments.
(e) Loans shall be repaid in periodic payments (not less
frequently than quarterly) with substantially level
amortization required over the term of the loan; provided,
however, that a Participant with an outstanding loan who is on
an unpaid leave of absence, or qualified military service
pursuant to Section 414(u)(4) of the Code, may elect, at the
commencement of such leave of absence, to suspend his loan
repayments for the lesser of (i) the period of the leave of
absence or (ii) 12 months. Notwithstanding the foregoing, a
Participant whose Contributions are suspended pursuant to
Section 3.6 may not elect to suspend his loan repayments.
(f) Loans may be prepaid in full at any time without penalty;
provided however, that a Participant who provides notification
of his intention to prepay a loan and fails to do so may not
resubmit notification for such period as determined by the
Committee. Partial prepayments shall be not be permitted.
(g) Each Participant receiving a loan hereunder shall receive a
statement reflecting the charges involved in each transaction,
including the dollar amount and annual interest rate of the
finance charges.
(h) All loans hereunder shall be considered investments of a
segregated account of the Trust directed by the borrower. All
loans shall be secured by up to 50% of the vested portion of
the Participant's Accounts, less any portion of the
Participant's Account which has been assigned to an alternate
payee under a qualified domestic relations order, to the
extent necessary to secure the outstanding loan amount and
applied first to the Before-Tax Contributions section of the
Participant's Accounts. No additional security shall be
permitted.
(i) Interest shall be charged at a rate determined by the
Committee and shall be determined with regard to interest
rates currently being charged on similar commercial loans by
persons in the business of lending money.
(j) Any loan made to a Participant hereunder shall be evidenced by
a promissory note which shall be executed by the Participant
in such manner and form as the Committee shall determine.
Such promissory note shall contain the irrevocable consent of
the Participant to payroll deductions.
(k) Fees chargeable in connection with a Participant's loan may be
charged, in accordance with a uniform and nondiscriminatory
policy established by the Committee, against the Participant's
Account to whom the loan is granted.
<PAGE> 52
(l) All loans shall be made from the Before-Tax Contributions
section of the Participant's Accounts and pro rata from the
Investment Fund in which the Before-Tax Contributions section
of such Participant's Account are then invested.
(m) Loan repayments to the Plan by the Participant shall be made
on an after-tax basis and shall be allocated to the Before-Tax
Contributions section of the Participant's Account in the
Investment Funds in the proportion that Before-Tax
Contributions section such Account is represented and shall be
invested in the Investment Funds on the basis of the
Participant's investment election under Section 3.4 in effect
at the time of such loan repayment.
(n) In the event that the Participant fails to make any required
loan repayment before a loan is repaid in full, the unpaid
balance of the loan, with interest due thereon, shall become
immediately due and payable, unless the Committee determines
otherwise. In the event that a loan becomes immediately due an
payable (in "default") pursuant to this Section 8.7, the
Participant (or his Beneficiary, if the Beneficiary is the
surviving spouse, in the event of the Participant's death) may
satisfy the loan by paying the outstanding balance in full
within such time as may be specified by the Committee in a
uniform and nondiscriminatory manner. Otherwise, any such
outstanding loan shall be deducted from the portion of the
Participant's vested Accounts (first from the Before-Tax
Contributions section of his Accounts) before any benefit
which is or becomes payable to the Participant or his
Beneficiary is distributed. In the case of a benefit which
becomes payable to the Participant or his Beneficiary pursuant
to Article 7 (or would be payable to the Participant or
Beneficiary but for such individual's election to defer the
receipt of benefits), the deduction described in the preceding
sentence shall occur on the earliest date following such
default on which the Participant or Beneficiary could receive
payment of such benefit, had the proper application been filed
or election been made, regardless of whether or not payment is
actually made to the Participant or Beneficiary on such date.
In the case of a benefit which becomes payable under any other
provision, the deduction shall occur on the date such benefit
is paid. The Committee shall also be entitled to take any and
all other actions necessary and appropriate to enforce
collection of the outstanding balance of the loan. Failure of
the Committee to strictly enforce Plan rights with respect to
a default on a Plan loan shall not constitute a waiver of such
rights.
(o) The outstanding loan balance or balances of a KCTC Heritage
Employee under the KCTC Salaried Plan shall be transferred to,
and repayment made to, this Plan effective as of January 1,
1997, and shall be subject to the terms of this Plan to the
extent not inconsistent with the terms of the outstanding
loan; provided, however, that a KCTC Heritage Employee whose
loan is transferred to this Plan with past due loan payments
shall have an extended grace period, as determined by the
Committee, in which to avoid default under this Section 8.7,
provided the total grace period under this Plan and the KCTC
Salaried Plan does not exceed the time period as provided
under the rules of the Internal Revenue Service. Such
outstanding loan balance shall be taken into account for all
purposes under this Section 8.7.
<PAGE> 53
ARTICLE IX
INCENTIVE INVESTMENT PLAN COMMITTEE
9.1 Membership. The Committee shall consist of at least three persons who
shall be officers or directors of the Corporation or Eligible
Employees. Members of the Committee shall be appointed from time to
time by, and shall serve at the pleasure of, the Chief Executive
Officer of the Corporation. The Committee shall elect one of its
members as chairman. The Committee shall not receive compensation for
its services. Committee expenses shall be paid by the Corporation.
9.2 Powers. The Committee shall have all such powers as may be necessary
to discharge its duties hereunder, including, but not by way of
limitation, the power to construe or interpret the Plan, to determine
all questions of eligibility hereunder, to determine the method of
payment of any Accounts hereunder, to adopt rules relating to the
giving of Timely Notice, and to perform such other duties as may from
time to time be delegated to it by the Chief Executive Officer of the
Corporation. The Committee may prescribe such forms and systems and
adopt such rules and actuarial methods and tables as it deems
advisable. It may employ such agents, attorneys, accountants,
actuaries, medical advisors, or clerical assistants (none of whom need
be members of the Committee) as it deems necessary for the effective
exercise of its duties, and may delegate to such agents any power and
duties, both ministerial and discretionary, as it may deem necessary
and appropriate.
9.3 Procedures. A majority of the Committee members shall constitute a
quorum. The Committee may take any action upon a majority vote at any
meeting at which a quorum is present, and may take any action without
a meeting upon the unanimous written consent of all members. All
action by the Committee shall be evidenced by a certificate signed by
the chairman or by the secretary to the Committee. The Committee
shall appoint a secretary to the Committee who need not be a member of
the Committee,and all acts and determinations of the Committee shall be
recorded by the secretary, or under his supervision. All such
records, together with such other documents as may be necessary for
the administration of the Plan, shall be preserved in the custody of
the secretary.
9.4 Rules and Decisions. All rules and decisions of the Committee shall
be uniformly and consistently applied to all Eligible Employees and
Participants under this Plan in similar circumstances and shall be
conclusive and binding upon all persons affected by them. The
Committee shall have absolute discretion in carrying out its duties
under the Plan.
9.5 Authorization of Payments. Subject to the provisions hereof, it shall
be the duty of the Committee to furnish the Trustee with all facts and
directions necessary or pertinent to the proper disbursement of the
Trust funds.
9.6 Books and Records. The records of the Employers shall be conclusive
evidence as to all information contained therein with respect to the
basis for participation in the Plan and for the calculation of
Contributions and Company Matching Contributions.
9.7 Perpetuation of the Committee. In the event that the Corporation
shall for any reason cease to exist, then, unless the Plan is adopted
and continued by a successor, the
<PAGE> 54
members of the Committee at that time shall remain in office until the
final termination of the Trust, and any vacancies in the membership of
the Committee caused by death, resignation, disability or other cause,
shall be filled by the remaining member or members of the Committee.
9.8 Claim Procedure. The Committee shall establish a procedure for
handling all claims by all persons. In the event any claim is denied,
the Committee shall provide a written explanation to the person
stating the reasons for denial.
9.9 Allocation or Reallocation of Fiduciary Responsibilities. The Named
Fiduciary may allocate powers and responsibilities not specifically
allocated by the Plan, or reallocate powers and responsibilities
specifically allocated by the Plan, to designated persons,
partnerships or corporations other than the Committee, and the members
of the Committee may allocate their responsibilities under the Plan
among themselves. Any such allocation, reallocation, or designation
shall be in writing and shall be filed with and retained by the
secretary of the Committee with the records of the Committee.
Notwithstanding the foregoing, no reallocation of the responsibilities
provided in the Trust to manage or control the Trust assets shall be
made other than by an amendment to the Trust.
9.10 Plan Administrator. The Corporation shall be the Plan Administrator
as described in ERISA.
9.11 Service of Process. The Corporation shall be the designated recipient
of service of process with respect to legal actions regarding the
Plan.
<PAGE> 55
ARTICLE X
AMENDMENT AND TERMINATION
10.1 Amendment and Termination. While it is intended that the Plan shall
continue in effect indefinitely, the Board may from time to time
modify, alter or amend the Plan or the Trust, and may at any time
order the temporary suspension or complete discontinuance of Company
Matching Contributions or may terminate the Plan, provided, however,
that
(i) no such action shall make it possible for any part of
the Trust assets (except such part as is used for the
payment of expenses) to be used for or diverted to
any purpose other than for the exclusive benefit of
Participants or their Beneficiaries;
(ii) no such action shall adversely affect the rights or
interests of Participants theretofore vested under
the Plan; and
(iii) in the event of termination of the Plan or complete
discontinuance of Company Matching Contributions
hereunder, all rights and interests of Participants
not theretofore vested shall become vested as of the
date of such termination or complete discontinuance.
Any action permitted to be taken by the Board under the foregoing
provision regarding the modification, alteration or amendment of the
Plan or the Trust may be taken by the Committee, using its prescribed
procedures, if such action
(1) is required by law,
(2) is estimated not to increase the annual cost of the
Plan by more than $1,000,000, or
(3) is estimated not to increase the annual cost of the
Plan by more than $25,000,000, provided such action
is approved and duly executed by the Chief Executive
Officer of the Corporation.
Any action taken by the Board or Committee shall be made by or
pursuant to a resolution duly adopted by the Board or Committee and
shall be evidenced by such resolution or by a written instrument
executed by such persons as the Board or Committee shall authorize for
such purpose.
The Committee shall report to the Chief Executive Officer of the
Corporation before January 31 of each year all action taken by it
hereunder during the preceding calendar year.
However, nothing herein shall be construed to prevent any
modification, alteration or amendment of the Plan or of the Trust
which is required in order to comply with any law
<PAGE> 56
relating to the establishment or maintenance of the Plan and Trust,
including but not limited to the establishment and maintenance of the
Plan or Trust as a qualified employee plan or trust under the Code,
even though such modification, alteration, or amendment is made
retroactively or adversely affects the rights or interests of a
Participant under the Plan.
<PAGE> 57
ARTICLE XI
MISCELLANEOUS
11.1 Non-Guarantee of Employment. Nothing contained in this Plan shall be
construed as a contract of employment between an Employer and a
Participant, or as a right of any Participant to be continued in the
employment of his Employer, or as a limitation of the right of an
Employer to discharge any Participant with or without cause.
11.2 Rights to Trust Assets. No Participant or any other person shall have
any right to, or interest in, any part of the Trust assets upon
termination of his employment or otherwise, except as provided from
time to time under this Plan, and then only to the extent of the
amounts due and payable to such person out of the assets of the Trust.
All payments as provided for in this Plan shall be made solely out of
the assets of the Trust and neither the Employers, the Trustee, nor
any member of the Committee shall be liable therefor in any manner.
The Employers shall have no beneficial interest of any nature
whatsoever in any Employer Contributions after the same have been
received by the Trustee, or in the assets, income or profits of the
Trust, or any part thereof, except to the extent that forfeitures as
provided in the Plan shall be applied to reduce the Employer
Contributions.
11.3 Disclaimer of Liability. Neither the Trustee, the Employers, nor any
member of the Committee shall be held or deemed in any manner to
guarantee the funds of the Trust against loss or depreciation.
11.4 Non-Recommendation of Investment. The availability of any security
hereunder shall not be construed as a recommendation to invest in such
security. The decision as to the choice of investment of
Contributions must be made solely by each Participant, and no officer
or employee of the Corporation or the Trustee is authorized to make
any recommendation to any Participant concerning the allocation of
Contributions hereunder.
11.5 Indemnification of Committee. The Employers shall indemnify the
Committee and each of its members and hold them harmless from the
consequences of their acts or conduct in their official capacity,
including payment for all reasonable legal expenses and court costs,
except to the extent that such consequences are the result of their
own willful misconduct or breach of good faith.
11.6 Selection of Investments. The Trustee shall have the sole discretion
to select investments for the various funds provided for herein even
though the same may not be legal investments for trustees under the
laws applicable thereto.
11.7 Non-Alienation. Except as otherwise provided herein, no right or
interest of any Participant or Beneficiary in the Plan and the Trust
shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, charge, attachment,
garnishment, execution, levy, bankruptcy, or any other disposition of
any
<PAGE> 58
kind, either voluntary or involuntary, prior to actual receipt of
payment by the person entitled to such right or interest under the
provisions hereof, and any such disposition or attempted disposition
shall be void.
11.8 Facility of Payment. If the Committee has notice that a Participant
entitled to a distribution hereunder, or his Beneficiary, is incapable
of caring for his own affairs, because of illness or otherwise, the
Committee may direct that any distribution from such Participant's
Accounts may be made, in such shares as the Committee shall determine,
to the spouse, child, parent or other blood relative of such
Participant, or his Beneficiary, or any of them, or to such other
person or persons as the Committee may determine, until such date as
the Committee shall determine that such incapacity no longer exists.
The Committee shall be under no obligation to see to the proper
application of the distributions so made to such person or persons,
and any such distribution shall be a complete discharge of any
liability under the Plan to such Participant, or his Beneficiary, to
the extent of such distribution.
11.9 Allocation in the Event of Advance Contributions. In the event that
the Employer's tax deduction with respect to amounts contributed to
the Plan pursuant to Articles III and IV for the months in the final
quarter of a Plan Year results in such amounts being deemed advanced
contributions of the Employer with respect to the taxable year of the
Employer ending within such Plan Year, such amounts shall be
considered allocated pursuant to Articles III and IV, as applicable,
as of the last day of such taxable year.
11.10 Action by a Committee of the Board. Any action which is required or
permitted to be taken by the Board under the Plan may be taken by the
Compensation Committee of the Board or any other duly authorized
committee of the Board designated under the By-Laws of the
Corporation.
11.11 Qualified Domestic Relations Orders. Anything in this Plan to the
contrary notwithstanding:
(a) Alternate Payee's Accounts. An alternate payee under a
domestic relations order determined by the Corporation to be a
qualified domestic relations order (as defined in Code section
414(p)) shall have established and maintained for him separate
Accounts similar to the Accounts of the Participant specified
in the qualified domestic relations order. The alternate
payee's Accounts shall be credited with his interest in such
Participant's Accounts, as determined under the qualified
domestic relations order. Except to the extent specifically
provided by the qualified domestic relations order, no amount
of the non-vested portion, if any, of the Participant's
Employer Accounts shall be credited to the alternate payee's
Accounts. Subsection 6.2(c) and Sections 6.3, 6.4, 6.5 and
6.6 shall apply to the alternate payee's Accounts as if the
alternate payee were a Participant.
(b) Investment of Alternate Payee's Accounts. An alternate payee
may on Timely Notice elect to reallocate or transfer all or
any percentage portion of any of his Employee Accounts or
Employer Accounts or both, consistent with subsection
<PAGE> 59
6.1(a). An alternate payee's interest arising from this
reallocation shall be invested in the various funds in
accordance with the alternate payee's directions. For
purposes of subsection 6.1(b), any such reallocation shall be
treated as a reallocation in accordance with subsection
6.1(a). Notwithstanding any other provision of this Section
11.11, no amounts in any of the other funds shall be
reallocated to an alternate payee's Accounts in the SMI Fund.
(c) Subject to the provisions of subsections (b) above, with
regard to an alternate payee's Employee Accounts or Employer
Accounts in the SMI Stock Fund, an alternate payee may elect
to reallocate amounts invested in such Accounts to any other
Accounts, effective as of any Valuation Date.
(d) Alternate Payee's Beneficiary. Except to the extent otherwise
provided by the qualified domestic relations order relating to
an alternate payee:
(i) the alternate payee may designate on Timely Notice a
beneficiary,
(ii) if no such person is validly designated or if the
designated person predeceases the alternate payee,
the beneficiary of the alternate payee shall be his
estate, and
(iii) the beneficiary of the alternate payee shall be
accorded under the Plan all the rights and privileges
of the Beneficiary of a Participant.
(e) Distribution to Alternate Payee. An alternate payee shall be
entitled to receive a distribution from the Plan in accordance
with the qualified domestic relations order relating to the
alternate payee. Such distribution may be made only in a
method provided in Section 7.7 and shall include only such
amounts as have become vested; provided, however, that if a
qualified domestic relations order so provides, a Lump Sum
Distribution or Partial Distribution of the total vested
amount credited to the alternate payee's Accounts may be made
to the alternate payee before the date that the Participant
specified in the qualified domestic relations order attains
his earliest retirement age (as defined in Code section
414(p)(4)(B)). A qualified domestic relations order may
provide that until a distribution is made to the alternate
payee, the alternate payee may make withdrawals in accordance
with Article VIII as if the alternate payee were an employed
Participant; provided, however, that (i) hardship withdrawals
from the portion of the alternate payee's Accounts
attributable to the Before-Tax Contributions Section of the
Accounts of the Participant specified in the qualified
domestic relations order shall not be available to an
alternate payee and (ii) no withdrawal suspension penalties
shall be imposed on account of a withdrawal by an alternate
payee.
(f) Vesting of Alternate Payee's Accounts. In the event that the
qualified domestic relations order provides for all or part of
the non-vested portion of the Participant's Employer Accounts
to be credited to the Accounts of the alternate payee, such
amounts shall vest and/or be forfeited at the same time and in
the
<PAGE> 60
same manner as the Accounts of the Participant specified in
the qualified domestic relations order; provided, however,
that no forfeiture shall result to the Accounts of the
alternate payee due to any distribution to or withdrawal by
the Participant from his Accounts or any distribution to or
withdrawal by the alternate payee from the vested portion of
the Accounts of the alternate payee.
11.12 Compensation Limit. In addition to other applicable limitations which
may be set forth in the Plan and notwithstanding any other contrary
provision of the Plan, compensation taken into account under the Plan
for Plan Years beginning on January 1, 1989 and ending prior to
January 1, 1994, shall not exceed $200,000, adjusted for changes in
the cost of living as provided in Code section 415(d), and
compensation taken into account under the Plan for Plan Years
beginning on or after January 1, 1994, shall not exceed $150,000,
adjusted for changes in the cost of living as provided in Code
sections 401(a)(17)(B) and 415(d).
In applying the above limitation, the Family Members of a Highly
Compensated Eligible Employee who is subject to the Family Member
aggregation rules of Code section 414(q)(6) because such Highly
Compensated Eligible Employee is either a "Five Percent Owner" (as
defined within Subsection 2.1(hh) of the Employer or an Affiliated
Employer or one of the ten Highly Compensated Eligible Employees paid
the greatest "Compensation" (as defined within Subsection 2.1(hh)
during the Year and such Highly Compensated Eligible Employee, shall
be treated as a single Participant, except that for this purpose
"Family Members" shall include only the affected Highly Compensated
Eligible Employee's spouse and any lineal descendants who have not
attained age 19 before the close of the Year. If, as a result of the
application of such rules, the adjusted limitation is exceeded, then
the limitation shall be prorated among the Highly Compensated Eligible
Employee and Family Members in proportion to each one's Total
Compensation prior to the application of this limitation, or adjusted
in accordance with any other method permitted by applicable
regulations. Notwithstanding the foregoing, this paragraph shall not
apply for Plan Years beginning after December 31, 1996.
<PAGE> 61
ARTICLE XII
LIMITATIONS ON BENEFITS
12.1 Definitions and Rules.
(a) Definitions. For purposes of Article XII, the following
definitions and rules of interpretation shall apply.
(i) "Annual Additions" to a Participant's Accounts under
this Plan is the sum, credited to a Participant's
Accounts for any Limitation Year, of:
(A) Company contributions,
(B) forfeitures, if any, and
(C) Participant Contributions.
(ii) "Annual Benefit" -
(A) A benefit which is payable annually in the
form of a straight life annuity under a
defined benefit plan maintained by the
Company which is subject to the limitations
of Code section 415. In the case of such a
benefit which is not payable in the form of a
straight life annuity, the benefit will be
adjusted in accordance with subsection
12.1(a)(ii)(C) below.
(B) When there is a transfer of assets or
liabilities from one qualified plan to
another, the Annual Benefit attributable to
the assets transferred shall not be taken
into account by the transferee plan in
applying the limitations of Code section 415.
The Annual Benefit payable on account of the
transfer for any individual that is
attributable to the assets transferred will
be equal to the annual benefit transferred on
behalf of such individual multiplied by a
fraction, the numerator of which is the value
of the total assets transferred and the
denominator of which is the value of the
total liabilities transferred.
(C) In the case of a retirement benefit under a
defined benefit plan subject to the
limitations of Code section 415(b) which is
in any form other than a straight life
annuity, such benefit will be adjusted to a
straight life annuity beginning at the same
age which is the actuarial equivalent of such
benefit in accordance with applicable
regulations and rules determined by the
Commissioner, but without taking into
account:
<PAGE> 62
(1) the value of a qualified joint and
survivor annuity (as defined in Code
section 401(a)(11)(G)(iii) and the
regulations thereunder) provided by
a defined benefit plan to the extent
that such value exceeds the sum of
(a) the value of a straight life
annuity beginning on the same date
and (b) the value of any
post-retirement death benefits which
would be payable even if the annuity
were not in the form of a joint and
survivor annuity,
(2) the value of benefits that are not
directly related to retirement
benefits (such as, but not limited
to, pre-retirement disability and
death benefits), and
(3) the value of benefits provided by a
defined benefit plan which reflect
post-retirement cost-of-living
increases to the extent that such
increases are in accordance with
Code section 415(d) and the
regulations thereunder.
(D) In the case of a retirement benefit beginning
before the Social Security Retirement Age
under a defined benefit plan subject to the
limitations of Code section 415(b), such
benefit will be adjusted to the actuarial
equivalent of a benefit beginning at the
Social Security Retirement Age in accordance
with applicable regulations and rules
determined by the Commissioner, but this
adjustment is only for purposes of applying
the dollar limitation described in Code
section 415(b)(1)(A) to the Annual Benefit of
the Participant.
(E) If a Participant has less than 10 Years of
Vesting Service with the Company at the time
the Participant begins to receive retirement
benefits under a defined benefit plan, the
benefit limitations described in Code section
415(b)(1) and (4) are to be reduced by
multiplying the otherwise applicable
limitation by a fraction, the numerator of
which is the number of Years of Vesting
Service with the Company as of, and
including, the current Limitation Year, and
the denominator of which is 10. For purposes
of this paragraph (E), Years of Vesting
Service shall be determined in accordance
with such defined benefit plan.
(F) In the case of a retirement benefit beginning
after the Social Security Retirement Age
under a defined benefit plan subject to the
limitations of Code section 415(b), such
benefit will be adjusted to the actuarial
equivalent of a benefit beginning at the
Social Security Retirement Age in accordance
with applicable regulations and rules
determined by the Commissioner, but this
adjustment is only for purposes of applying
the dollar limitation described in Code
section 415(b)(1)(A) to the Annual Benefit of
the Participant.
<PAGE> 63
(G) For purposes of this Section, the "Social
Security Retirement Age" shall mean the age
used as the retirement age under section
216(l) of the Social Security Act, applied
without regard to the age increase factor and
as if the early retirement age under section
216(l)(2) of the Social Security Act were 62.
(iii) "Company" - any corporation which is a member of a
controlled group of corporations (as defined in Code
section 414(b) and modified by Code section 415(h))
or an affiliated service group (as defined in section
414(m) of the Code) which includes an Employer; any
trades or businesses (whether or not incorporated)
which are under common control (as defined in Code
section 414(c) and modified by Code section 415(h))
with an Employer; or any other entity required to be
aggregated with an Employer pursuant to Code section
414(o).
(iv) "Compensation" with respect to a Limitation Year -
(A) Compensation includes amounts actually paid
or made available to a Participant
(regardless of whether he was such during the
entire Limitation Year);
(1) as wages, salaries, fees for
professional service, and other
amounts received for personal
services actually rendered in the
course of employment with the
Company including but not limited to
commissions, compensation for
services on the basis of a
percentage of profits and bonuses;
(2) for purposes of (i) above, earned
income from sources outside the
United States (as defined in Code
section 911(b)); whether or not
excludable from gross income under
Code section 911 or deductible under
Code section 913;
(3) amounts described in Code sections
104(a)(3), 105(a) and 105(h) but
only to the extent that these
amounts are includable in the gross
income of the Participant;
(4) amounts paid or reimbursed by the
Company for moving expenses incurred
by the Participant, but only to the
extent that these amounts are not
deductible by the Participant under
Code section 217;
(5) value of a nonqualified stock option
granted to the Participant, but only
to the extent that the value of the
option is includable in the gross
income of the Participant in the
taxable year in which granted;
<PAGE> 64
(6) the amount includable in the gross
income of a Participant upon making
the election described in Code
section 83(b).
(B) excludes -
(1) amounts contributed to this Plan by
Employers on behalf of Participants
as Before-Tax Contributions (and not
considered Basic After-Tax
Contributions under Section
3.5(a)(ii) nor recharacterized as
Basic After-Tax Contributions under
Section 3.5(b)(iii)) and any amount
which is contributed or deferred by
the Employer at the election of the
Employee under Section 125 of the
Code; provided, however that for
Limitation Years beginning after
December 31, 1997, such amounts
shall be included as "Compensation"
with respect to such Limitation
Year.
(2) contributions made by the Company to
a plan of deferred compensation to
the extent that, before the
application of the Code section 415
limitations to that plan, the
contributions are not includable in
the gross income of the
Participant for the taxable year in
which contributed and any
distributions from a plan of
deferred compensation, regardless of
whether such amounts are includable
in the gross income of the
Participant when distributed;
provided however, any amounts
received by a Participant pursuant
to an unfunded nonqualified plan
shall be considered as Compensation
in the year such amounts are
includable in the gross income of
the Participant;
(3) amounts realized from the exercise
of a nonqualified stock option, or
recognized when restricted stock (or
property) held by a Participant
either becomes freely transferable
or is no longer subject to a
substantial risk of forfeiture
pursuant to Code section 83 and the
regulations thereunder;
(4) amounts realized from the sale,
exchange or other disposition of
stock acquired under a qualified
stock option;
(5) other amounts which receive special
tax benefits such as premiums for
group term life insurance (but only
to the extent that the premiums are
not includable in the gross income
of the Participant); and
(6) Compensation in excess of the limit
set forth in Section 11.12.
<PAGE> 65
In lieu of the above definition of "Compensation,"
effective for Plan Years beginning after December 31,
1991, the following alternative definitions of
"Compensation" in (A) or (B) below may be applied
with respect to a Limitation Year, as determined by
the Committee in its discretion:
(A) Wages within the meaning of Section 3401(a)
of the Code and all other payments of
compensation to an Employee by his Employer
(in the course of the Employer's trade or
business) for which the Employer is required
to furnish the Employee a written statement
under Section 6041(d), 6051(a)(3), and 6052
of the Code, but excluding amounts paid or
reimbursed by the Employer for moving
expenses incurred by an Employee, but only to
the extent that at the time of the payment it
is reasonable to believe that these amounts
are deductible by the Employee under Section
217 of the Code, and determined without
regard to any rules under Section 3401(a) of
the Code that limit the remuneration included
in wages based on the nature or location of
the employment or the services performed.
(B) Wages within the meaning of Section 3401(a)
of the Code (for purposes of income tax
withholding at the source) of the Participant
but determined without regard to any rules
that limit the remuneration included in wages
based on the nature or location of the
employment or the services performed.
For Limitation Years beginning after December 31,
1997, "Compensation" hereunder includes amounts
contributed or deferred by the Employer on behalf of
the Employee under sections 125 or 401(k) of the
Code.
(v) "Limitation Year" - a calendar year;
(vi) "Maximum Permissible Amount" -
(A) for a Limitation Year, with respect to any
Participant, subject to the rule in paragraph
(B), the lesser of
(1) $30,000 (or, if greater, 1/4 of the
dollar limitation in effect under
Code section 415(b)(1)(A)), or
(2) 25% of the Participant's
Compensation for the Limitation
Year.
(B) As of January 1 of each calendar year, the
dollar limitation set forth in subparagraph
(A)(1) above shall be adjusted automatically
for cost-of-living increases to equal the
dollar limitation as determined by the
Commissioner for that calendar year under
Code section
<PAGE> 66
415(d)(1)(B). This adjusted dollar
limitation applies for the Limitation Year
ending with that calendar year.
(vii) "Projected Annual Benefit" - the Annual Benefit to
which a Participant would be entitled under a defined
benefit plan maintained by the Company on the
assumptions that he or she continues employment until
the normal retirement age (or current age, if that is
later) thereunder, that his or her Compensation
continues at the same rate as in effect for the
Limitation Year under consideration until such age,
and that all other relevant factors used to determine
benefits under the Plan remain constant as of the
current Limitation Year for all future Limitation
Years;
(b) Other Rule. For purposes of applying the limitations of Code
section 415(b), (c) and (e) applicable to a Participant for a
particular Limitation Year, all qualified defined contribution
plans (without regard to whether a plan has been terminated)
ever maintained by the Company will be treated as part of this
Plan and all qualified defined benefit plans (without regard
to whether a plan has been terminated) ever maintained by the
Company will be treated as one defined benefit plan.
12.2 Limits.
(a) Annual Addition Limit. The amount of the Annual Addition
which may be credited under this Plan to any Participant's
Accounts as of any allocation date shall not exceed the
Maximum Permissible Amount (based upon his Compensation up to
such allocation date) reduced by the sum of any Annual
Additions made to the Participant's Accounts under this Plan
as of any preceding allocation date within the Limitation
Year. If an allocation date of this Plan coincides with an
allocation date of any other qualified defined contribution
plan maintained by the Company, the amount of the Annual
Additions which may be credited under this Plan to any
Participant's Accounts as of such date shall be an amount
equal to the product of the amount to be credited under this
Plan without regard to this Section 12.2 multiplied by the
lesser of 1.0 or a fraction, the numerator of which is the
amount described in this subsection (a) of Section 12.2 during
the Limitation Year and the denominator of which is the amount
that would otherwise be credited on this allocation date under
all plans without regard to this Section 12.2. If
contributions to this Plan by or on behalf of a Participant
are to be reduced as a result of this Section 12.2, such
reduction shall be effected by first reducing the
Participant's Retirement Contributions under the
Kimberly-Clark Corporation Retirement Contribution Plan, as
provided under that plan; then, under this Plan, (i) any
Unrestricted After-Tax Contributions, (ii) if and to the
extent necessary, by proportionately reducing any Basic
After-Tax Contributions and corresponding Company Matching
Contributions and (iii), if and to the extent necessary, by
proportionately reducing any Before-Tax Contributions and
corresponding Company Matching Contributions. If as a result
of a reasonable error in estimating a Participant's
Compensation, or under the limited facts and circumstances
which the Commissioner finds justify the availability of the
rules set
<PAGE> 67
forth in this Section 12.2, the allocation of Annual Additions
under the terms of the Plan for a particular Participant would
cause the limitations of Code section 415 applicable to that
Participant for the Limitation Year to be exceeded, the excess
amounts shall not be deemed to be Annual Additions in that
Limitation Year if they are treated as follows:
(i) The excess amounts in the Participant's Account
consisting of Participant Contributions and
Contributions made on his behalf and any increment
attributable thereto shall be paid to the
Participant as soon as administratively feasible.
(ii) The excess amounts in the Participant's Account
consisting of Company Matching Contributions shall be
used to reduce Company Matching Contributions for the
next Limitation Year (and succeeding Limitation
Years, as necessary) for all Participants in the
Plan.
(b) Overall Limit. For any Participant of this Plan who at any
time participated in a defined benefit plan maintained by the
Company, the rate of benefit accrual by such Participant in
each defined benefit plan in which the Participant
participates during the Limitation Year will be reduced to the
extent necessary to prevent the sum of the following
fractions, computed as of the close of the Limitation Year,
from exceeding 1.0:
(i) The Projected Annual Benefit of the Participant under
the defined benefit plan
over
The lesser of (1) the product of 1.25 multiplied by
the dollar limitation in effect under Code section
415(b)(1)(A) for such Limitation Year or (2) the
product of 1.4 multiplied by the amount which may be
taken into account under Code section 415(b)(1)(B)
with respect to such Participant for such Limitation
Year,
plus
(ii) The sum of Annual Additions to such Participant's
Accounts under this Plan in such Limitation Year and
for all prior Limitation Years
over
The sum of the lesser of the following amounts
determined for such year and for each prior year of
service with the Company: (1) the product of 1.25
multiplied by the dollar limitation in effect under
Code section 415(c)(1)(A) for such Limitation Year or
(2) the product of 1.4 multiplied by 25% of the
Participant's Compensation for such Limitation Year.
<PAGE> 68
(c) Special Rules Applicable to Computation of Overall Limit.
(i) For purposes of applying the defined contribution
plan fraction in Section 12.2(b), for any Limitation
Year beginning after December 31, 1975, the following
rules shall apply with respect to Limitation Years
before January 1, 1976:
(A) The aggregate amount taken into account in
determining the numerator of such fraction is
deemed not to exceed the aggregate amount
taken into account in determining the
denominator of the fraction.
(B) The amount taken into account for purposes of
subsection 12.1(a)(i)(C)(1) is an amount
equal to the excess of the aggregate amount
of the Participant's contributions for such
years during which he was an active
participant in the Plan over 10% of the
Participant's aggregate Compensation for all
such years, multiplied by a fraction, the
numerator of which is 1.0 and the denominator
of which is the number of years beginning
before January 1, 1976, during which the
Participant participated in the Plan.
Participant contributions made on or after
October 2, 1973, shall be taken into account
for purposes of the preceding sentence only
to the extent that the amount of such
contributions was permissible under a plan as
in effect on that date.
(ii) In any case where the sum of the fractions in Section
12.2(b) is greater than 1.0 calculated as of the
close of the last Limitation Year beginning before
January 1, 1983 for a Participant in accordance with
regulations prescribed by the Commissioner pursuant
to Section 235(g)(3) of the Tax Equity and Fiscal
Responsibility Act of 1982, an amount shall be
subtracted from the numerator of the defined
contribution plan fraction so that the sum of such
fractions does not exceed 1.0 for such Limitation
Year.
(d) Repeal of Overall Limit. For Limitation Years beginning after
December 31, 1999, the overall limit described in subsection
12.2(b) and (c) shall no longer apply under the Plan.
<PAGE> 69
ARTICLE XIII
MERGER
No merger or consolidation with or transfer of any assets or liabilities to any
other plan after September 2, 1974, shall be made unless, upon completion
thereof, the value of each Participant's Account shall immediately after said
merger, consolidation, or transfer be equal to or greater than the value of the
Participant's Account immediately before the merger, consolidation, or transfer
(if the Plan had then terminated).
<PAGE> 70
ARTICLE XIV
TOP-HEAVY REQUIREMENTS
14.1 Top-Heavy Requirements. Notwithstanding any other provisions of this
Plan, the following rules shall apply for any Plan Year if as of the
last day of the preceding Plan Year, based on valuations as of such
date, the sum of the present value of accrued benefits and Accounts of
"key employees" (within the meaning of Code section 416) exceeds 60%
of a similar sum for all employees under each plan of the Employer or
any Affiliated Employer in which a "key employee" participates and
each other plan of the Employer or any Affiliated Employer which
enables any such plan to meet the requirements of Code section
401(a)(4) or 410. A Plan Year during which such rules apply shall be
known as a "Top-Heavy Plan Year."
(a) Vesting. A Participant who is credited with an Hour of
Service during the Top-Heavy Plan Year, or in any Plan Year
after the Top-Heavy Plan Year, and who has completed at least
three years of Service shall have a nonforfeitable right to
100% of his Employer Accounts and no such amount may become
forfeitable if the Plan later ceases to be Top-Heavy nor may
such amount be forfeited under the provisions of Code sections
411(a)(3)(B) (relating to suspension of benefits upon
reemployment) or 411(a)(3)(D) (relating to forfeitures upon
withdrawal of mandatory contributions). If the Plan become
Top-Heavy and later ceases to be Top-Heavy, this vesting
schedule shall no longer apply and benefits which have not at
such time vested under this schedule shall vest only in
accordance with other provisions of this Plan, provided that
any Participant with at least 3 years of Service shall be
entitled to continue to utilize this schedule for vesting
purposes by making an election at the time and in the manner
specified by the Committee.
(b) Required Contributions. Each Employer shall contribute on
behalf of each employee eligible to participate in the Plan,
the lesser of:
(i) 3% of such employee's compensation (within the
meaning of Code section 415); or
(ii) the percentage of such employee's compensation
(within the meaning of Code section 415) which is
equal to the percentage at which contributions were
made for that Plan Year on behalf of the "key
employee" for whom such percentage is the greatest
for such Plan Year, as prescribed by Code section
416(c)(2)(B) and regulations thereunder;
provided, however, that any contributions for any employee
required of any Employer by the above provisions of this
subsection 14.1(b) shall be reduced by the amount of any
Company Matching Contribution made with respect to such Plan
Year for such employee under Article IV of this Plan. Any
contribution made pursuant to this subsection 14.1(b) shall be
allocated to the Employer K-C Stock Account on behalf of the
employee for whom such contribution is made.
<PAGE> 71
(c) Additional Limitations. No allocations may be made to the
Account of a Participant the sum of whose defined benefit plan
fraction and defined contribution plan fraction, as defined in
Code section 415(e), exceeds 1.0 when the dollar amounts, as
defined in Section 12.2(b) hereof, are multiplied by 1.0
rather than 1.25.
The provisions of this Section 14.1 shall be interpreted in
accordance with the provisions of Code section 416 and any
regulations thereunder, which are hereby expressly
incorporated by reference.
(d) Coordination. In the event a top heavy minimum contribution
or benefit is required under this Plan or a defined benefit
plan of an Employer that covers a Participant, the top heavy
minimum contribution or benefit, as appropriate, shall be
provided in this Plan. In the event a top heavy minimum
contribution is required under this Plan or another defined
contribution plan of an Employer that covers a Participant,
the top heavy minimum contribution shall be provided in the
other plan.
<PAGE> 72
APPENDIX A
LIST OF EMPLOYERS, PARTICIPATING UNITS AND APPLICABLE SCHEDULES
Employers and Participating Units
Avent, Inc.
All salaried employees of this Employer, including
those on temporary assignment at other Employers
or in other classifications, but excluding
employees on temporary assignment from another
Employer or classification.
Durafab, Inc.
All salaried employees of this Employer, including
those on temporary assignment at other Employers
or in other classifications, but excluding
employees on temporary assignment from another
Employer or classification.
K-C Aviation Inc.
All salaried employees of this Employer, including
those on temporary assignment at other Employers
or in other classifications, but excluding
employees on temporary assignment from another
Employer or classification.
Kimberly-Clark Corporation
(a) All salaried employees of this Employer,
including those on temporary assignment at
other Employers or in other
classifications, but excluding (i)
employees on temporary assignment from
another unit, Employer or classification
and (ii) nonexempt salaried employees at
the LaGrange Mill, Lexington Mill,
Maumelle Facility and Paris Plant.
(b) All nonexempt salaried employees at the
Conway Mill, including those on temporary
assignment at other Employers or in other
classifications, but excluding employees
on temporary assignment from another
Employer or classification; provided that
such employees shall be eligible to make
Before-Tax Contributions under Article III
effective November 1, 1996.
(c) All nonexempt salaried employees at the
Corinth Mill and Corinth Away From Home
Plant, including those on temporary
assignment at other Employers or in other
classifications, but excluding employees
on temporary assignment from another
Employer or classification; provided that
such employees shall be eligible to make
Before-Tax Contributions under Article III
effective November 1, 1996.
Kimberly-Clark Financial Services, Inc.
All salaried employees of this Employer, including
those on temporary assignment at other Employers
or in other classifications, but excluding
employees on temporary assignment from another
Employer or classification.
Kimberly-Clark International Services Corporation
All salaried employees of this Employer except
those who transfer to a 50% or less owned foreign
subsidiary on a non-temporary basis.
<PAGE> 73
Employers and Participating Units
Kimberly-Clark Technical Paper, Inc.
All salaried employees of this Employer, including
those on temporary assignment at other Employers
or in other classifications, but excluding
employees on temporary assignment from another
Employer or classification.
Kimberly-Clark Tissue Company
Effective January 1, 1997, all KCTC Heritage
Employees, and all salaried employees of this
Employer hired on or after January 1, 1997,
including those on temporary assignment at other
Employers or in other classifications, but
excluding employees on temporary assignment from
another Employer or classification.
Kimberly-Clark Worldwide, Inc.
All salaried employees of this Employer, including
those on temporary assignment at other Employers
or in other classifications, but excluding (i)
employees on temporary assignment from another
Employer or classification and (ii) nonexempt
salaried employees at the Ogden Plant.
<PAGE> 1
EXHIBIT 4.7
KIMBERLY-CLARK CORPORATION HOURLY EMPLOYEES
INCENTIVE INVESTMENT PLAN
<PAGE> 2
KIMBERLY-CLARK CORPORATION HOURLY
EMPLOYEES INCENTIVE INVESTMENT PLAN
(As amended through December 31, 1997)
<PAGE> 3
ARTICLE I
NAME, PURPOSE AND EFFECTIVE DATE OF PLAN
This Kimberly-Clark Corporation Hourly Employees Incentive Investment Plan (the
"Plan") has been adopted effective August 1, 1967. Its purpose is to promote
the interests of the Corporation and its stockholders by encouraging Eligible
Employees to arrange for personal investment programs which, depending upon the
success of the Corporation, will be augmented by Company Matching
Contributions. It provides each Eligible Employee with an opportunity to
become a stockholder of the Corporation. To comply with the applicable
requirements of the Tax Reform Act of 1986, the Plan has been restated in its
entirety effective March 31, 1993, except as otherwise provided in Section
11.12 hereof. The Plan is intended to be an employee stock ownership plan, as
defined in section 4975 of the Code, and is designed to invest primarily in
qualifying employer securities, as defined in section 409(l) of the Code.
<PAGE> 4
ARTICLE II
DEFINITIONS AND CONSTRUCTION
2.1 Definitions. When the following words and phrases appear in this
Plan, they shall have the respective meanings set forth below unless
the context clearly indicates otherwise:
(a) Accounts: The accounts under the Plan to be maintained for
each Participant as provided in Section 6.2.
(b) Actual Contribution Percentage: A percentage which, for a
specified group of Eligible Employees for a Plan Year shall be
the average of the ratios (calculated separately for each
Eligible Employee in such group) of
(i) the amount of After-Tax Contributions and Company
Matching Contributions remitted to the Trustee on
behalf of each Eligible Employee for such Plan Year
(but only to the extent that such Contributions and
Company Matching Contributions are not considered for
purposes of Section 2.1(c) hereof), together with
qualified nonelective contributions treated as
Company Matching Contributions pursuant to Code
section 401(m) and regulations thereunder, to
(ii) the Eligible Employee's Total Compensation for such
Plan Year.
For the purposes of determining the ratio of a Highly
Compensated Eligible Employee, the After-Tax Contributions,
Company Matching Contributions, and Total Compensation of such
Highly Compensated Eligible Employee shall include the
After-Tax Contributions, Company Matching Contributions, and
Total Compensation of family members (as defined in Code
section 414(q)(6)(B)) of said Highly Compensated Eligible
Employee; provided, however, that this sentence shall not
apply for Plan Years beginning after December 31, 1996.
(c) Actual Deferral Percentage: A percentage which, for a
specified group of Eligible Employees for a Plan Year, shall
be the average of the ratios (calculated separately for each
Eligible Employee in such group) of
(i) the amount of Before-Tax Contributions remitted to
the Trustee on behalf of each such Eligible Employee
for such Plan Year (and, to the extent determined
appropriate by the Committee, such other
Contributions and Company Matching Contributions as
may be used to determine the actual deferral
percentage under Code section 401(k) and regulations
thereunder), to
(ii) the Eligible Employee's Total Compensation for such
Plan Year.
For the purposes of determining the ratio of a Highly
Compensated Eligible Employee, the Before-Tax Contributions
and Total Compensation of such Highly Compensated Eligible
Employee shall include the Before-Tax Contributions and
<PAGE> 5
Total Compensation of family members (as defined in Code
section 414(q)(6)(B)) of said Highly Compensated Eligible
Employee; provided, however that this sentence shall not apply
for Plan Years beginning after December 31, 1996.
(d) Affiliated Employer: An Employer and any corporation which is
a member of a controlled group of corporations (as defined in
Code section 414(b)) which includes an Employer; any trade or
business (whether or not incorporated) which is under common
control (as defined in Code section 414(c)) with an Employer;
any organization (whether or not incorporated) which is a
member of an affiliated service group (as defined in Code
section 414(m)) which includes an Employer; and any other
entity required to be aggregated with an Employer pursuant to
Code section 414(o).
(e) After-Tax Contributions: Contributions made by Participants
on an after-tax basis, which include Basic After-Tax
Contributions and Unrestricted After-Tax Contributions.
(f) All Cash Distribution: As defined in subsection 7.3(c).
(g) All Stock Distribution: As defined in subsection 7.3(a).
(h) Base Hourly Wages: An amount, as determined by the Employer
pursuant to Committee rule, which is that portion of an
Eligible Employee's Total Compensation from an Employer which
consists only of regular earnings while a Participant. Base
Hourly Wages shall be determined before Before-Tax
Contributions pursuant to subsection 3.2(a), and any elective
wage reduction contributions pursuant to Code Section 125, are
deducted. Notwithstanding the foregoing, the amount of any
Eligible Employee's compensation which is taken into account
for purposes of determining such Eligible Employee's Base
Hourly Wages under the Plan shall not exceed the limit set
forth in Section 11.12.
(i) Basic After-Tax Contributions:
(i) Contributions made by Participants under subsection
3.2(b) on an after-tax basis on account of which a
Company Matching Contribution is made to the Plan on
behalf of the Participant; or
(ii) Before-Tax Contributions in excess of the limitation
under subsection 3.5(a)(i) or in excess of the
limitation under subsection 3.5(b)(i) which are
recharacterized under subsection 3.5(b)(iii), and any
other employee contributions, as defined in Code
Section 401(m) and the regulations thereunder, on
account of which a Company Matching Contribution was
made to this Plan on behalf of the Participant,
excluding any such employee contributions contributed prior to
April 1, 1990, or made on behalf of a Participant who was
employed prior to April 1, 1989.
(j) Beneficiary: The person or persons last designated on Timely
Notice by a Participant, provided the named person survives
the Participant. If no such person is validly designated as
provided under Section 7.7(a), or if the designated
<PAGE> 6
person predeceases the Participant, the Beneficiary shall be
the Participant's spouse, if living, and if not, the
Participant's estate.
(e) Before-Tax Contributions: Contributions made by Employers on
behalf of Participants under subsection 3.2(a) on or after
April 1, 1993 that are considered deferred within the meaning
of Code section 401(k) and regulations thereunder.
(l) Board: The Board of Directors of the Corporation.
(m) Bond Index Fund: An Investment Fund consisting of U.S.
government and investment grade corporate bonds, and asset
backed and mortgage backed securities with the objective to
match the performance of the Lehman Brothers Aggregate Bond
Index, or such other similar index as may be selected by the
Named Fiduciary. The Bond Index Fund shall include funds
transferred from the Government Fund as of October 1, 1996
under the prior version of the Plan, and Contributions
allocated to the Government Fund under the prior version of
the Plan shall be allocated to the Bond Index Fund. The Bond
Index Fund shall also include funds transferred as of January
1, 1998 from, and Contributions allocated as of January 1,
1998 to, the KCTC Admiral Long-Term U.S. Treasury Portfolio
Fund accounts of KCTC Heritage Employees under the KCTC Hourly
Plan.
(n) Business Day: Any day on which securities are traded on the
New York Stock Exchange.
(o) Code: The Internal Revenue Code of 1986, as amended from time
to time.
(p) Commissioner: The Commissioner of the Internal Revenue
Service.
(q) Committee: The committee appointed to administer and regulate
the Plan as provided in Article IX.
(r) Company Matching Contributions: Amounts contributed under the
Plan by Employers as provided in Article IV.
(s) Contributions: Amounts deposited under the Plan by or on
behalf of Participants including Before-Tax Contributions, and
After-Tax Contributions as provided in Article III.
(t) Corporation: Kimberly-Clark Corporation (a Delaware
corporation).
(u) Corporation Stock: The common stock of the Corporation.
(v) Current Market Value: The fair market value on any day as
determined by the Trustee in accordance with generally
accepted valuation principles applied on a consistent basis.
(w) Day of Service: An Employee shall be credited with a Day of
Service for each calendar day commencing with the date on
which the Employee first performs an Hour of Service until the
Employee's Severance from Service Date. If an Employee quits,
is discharged, retires, or dies, and such Employee does not
incur a One-Year Period of Severance, the Employee shall be
credited with a Day of
<PAGE> 7
Service for each calendar day elapsed from the Employee's
Severance from Service Date to the date on which the Employee
again completes an Hour of Service.
(x) Eligible Employee: Any person who is in the employ of an
Employer during such periods as he meets all of the following
conditions:
(i) he is an Employee on the regular payroll of an
Employer,
(ii) he has (a) at least one calendar month of continuous
Service or (b) has completed during a computation
period beginning on or after April 1, 1993, 365
consecutive Days of Service, or has completed during
a computation period ending on or prior to March 31,
1993, at least 1,000 Hours of Service. A computation
period for purposes of this subsection 2.1(u)(ii)
shall be a period of 12 consecutive months, beginning
on the Employee's date of employment by the
Corporation, a Subsidiary or an Equity Company or an
anniversary thereof; and
(iii) he is in a Participating Unit.
For purposes of the preceding sentence, "on the regular
payroll of an Employer" shall mean paid through the payroll
department of such Employer, and shall exclude employees
classified by an Employer as intermittent or temporary
employees, and persons classified by an Employer as
independent contractors, regardless of how such Employee may
be classified by any federal, state, or local, domestic or
foreign, governmental agency or instrumentality thereof, or
court.
Any leased employee (as defined in Code section 414(n)) shall
not be considered an Eligible Employee under the Plan. In
addition, a person who formerly was an Eligible Employee shall
be treated as an Eligible Employee for all purposes hereunder
during such periods as he meets all of the following
conditions:
(i) he is an Employee on the regular payroll of an
Employer; and
(ii) he is on temporary assignment to provide services for
a corporation, hereinafter referred to as the
"Affiliate," which is a member of a controlled group
of corporations, within the meaning of Code section
414(b) as modified by Code section 415(h), of which
the Corporation is a member, and which is not an
Employer hereunder.
For purposes of the preceding sentence, a person shall be
considered on temporary assignment only if his period of
service for an Affiliate is expected to be of brief duration
not to exceed 5 years and if he is expected to resume services
for an Employer upon the expiration of the temporary
assignment with the Affiliate.
(y) Employee: A person employed by an Employer.
(z) Employee Accounts: Those Accounts which reflect that portion
of a Participant's interest in the Investment Funds which are
attributable to his Contributions.
<PAGE> 8
(aa) Employer: The Corporation and each Subsidiary which the
Committee shall from time to time designate as an Employer for
purposes of the Plan pursuant to Article X hereof, and which
shall adopt the Plan and the Trust. A list of Employers is
set forth in Appendix A.
(bb) Employer Accounts: Those Accounts which reflect the portion
of a Participant's interest in the Investment Funds which are
attributable to Company Matching Contributions.
(cc) Entry Date: The first day of each month.
(dd) Equity Company: Any corporation, which is not the Corporation
or a Subsidiary, 33-1/3% or more of the voting shares of which
are owned directly or indirectly by the Corporation.
(ee) ERISA: The Employee Retirement Income Security Act of 1974,
as amended from time to time.
(ff) Growth Stock Fund: An Investment Fund consisting primarily of
common or preferred stocks of medium to large capitalization
companies identified by the fund manager as having above
average growth potential. The Growth Stock Fund will include
funds transferred as of January 1, 1998 from, and
Contributions allocated as of January 1, 1998 to, the KCTC
U.S. Growth Portfolio Fund and the KCTC Index Trust - Small
Cap Stock Portfolio accounts of KCTC Heritage Employees under
the KCTC Hourly Plan.
(gg) Highly Compensated Eligible Employee: An Eligible Employee who
is described in Code section 414(q) and applicable regulations
thereunder. An Employee who is described in Code section
414(q) and applicable regulations thereunder generally means
an Employee who performed services for the Employer or an
Affiliated Employer during the "Determination Year" and is in
one or more of the following groups:
(i) Employees who at any time during the "Determination
Year" or "Look-Back Year" were "Five Percent Owners"
of the Employer or an Affiliated Employer. "Five
Percent Owner" means any person who owns (or is
considered owning within the meaning of Code Section
318) more than five percent of the outstanding stock
of the Employer or stock possessing more than five
percent of the total combined voting power of all
stock of the Employer or, in the case of an
unincorporated business, any person who owns more
than five percent of the capital or profits interest
in the Employer. In determining percentage ownership
hereunder, employers that would otherwise be
aggregated under Code sections 414(b), (c), (m) and
(o) shall be treated as separate employers; or
(ii) Employees who received "Compensation" during the
"Look-Back Year" from the Employer or an Affiliated
Employer in excess of $80,000, adjusted for changes
in the cost of living as provided in Code section
415(d) and, if the Employer elects, were in the "Top
Paid Group" of Employees for the Plan Year. "Top Paid
Group" means the top 20 percent of Employees,
excluding those Employees described in Code section
<PAGE> 9
414(q)(8) and applicable regulations, who performed
services during the applicable Year, ranked according
to the amount of "Compensation" received from the
Employer during such Year.
The "Determination Year" shall be the Plan Year for which
testing is being performed, and the "Look-Back Year" shall be
the immediately preceding 12 month period.
An Employer may make a uniform election with respect to all
plans of the Employer to apply a calendar year calculation, as
permitted by regulations under Code section 414(q).
For purposes of this subsection, "Compensation" shall mean
compensation as defined in subsection 12.1(a)(iv) including
elective salary reduction contributions made under this Plan
or another cash or deferred arrangement or pursuant to Code
Section 125.
(hh) Hours of Service: Each hour for which an Employee is directly
or indirectly paid, or entitled to payment, by an Employer for
the performance of duties and for reasons other than the
performance of duties during the applicable computation
period. An Hour of Service shall also include each hour for
which back pay, irrespective of mitigation of damages, has
been either awarded or agreed to by an Employer. Hours of
Service shall be credited to the Employee for the computation
period or periods in which the duties are performed or for the
period to which the award or agreement pertains, whichever is
applicable. Credit for Hours of Service shall be given for
periods of absence spent in military service to the extent
required by law. Credit for Hours of Service may also be
given for such other periods of absence of whatever kind or
nature as shall be determined under uniform rules of the
Committee. Employment with a company which was not, at the
time of such employment, an Employer shall be considered as
the performance of duties for an Employer if such employment
was continuous until such company was acquired by, merged
with, or consolidated with an Employer and such employment
continued with an Employer following such acquisition, merger
or consolidation. Employment with a Subsidiary that is not an
Employer or with an Equity Company shall be considered as
performance of duties for an Employer.
Hours of Service shall be calculated and credited in a manner
consistent with U.S. Department of Labor regulation Section
2530.200b-2(b) and (c), and shall in no event exclude any
hours required to be credited under U.S. Department of Labor
regulation Section 2530.200b-2(a).
For any period or periods for which adequate records are not
available to accurately determine the Employee's Hours of
Service, the following equivalency shall be used:
190 Hours of Service for each month for which such
Employee would otherwise receive credit for at least
one Hour of Service.
Solely for purposes of determining whether an Employee has
incurred a one-year break-in-service, an Employee who is
absent from work:
<PAGE> 10
(i) by reason of the pregnancy of the Employee;
(ii) by reason of the birth of a child of the Employee;
(iii) by reason of a placement of a child with the Employee
in connection with the adoption of such child by the
Employee; or
(iv) for purpose of caring for such child for a period
beginning immediately following such birth or
placement,
shall be credited with certain Hours of Service which would
otherwise have been credited to the Employee if not for such
absence. The Hours of Service credited hereunder by reason of
such absence shall be credited with respect to the Plan Year
in which such absence begins, if such credit is necessary to
prevent the Employee from incurring a one-year
break-in-service in such Plan Year, and otherwise with respect
to the Plan Year immediately following the Plan Year in which
such absence begins. In addition, the Hours of Service
credited with respect to such absence shall not exceed 501,
and shall be credited only to the extent that the Employee
substantiates to the satisfaction of the Committee that the
Employee's absence, and the length thereof, was for the
reasons described in paragraphs (1)-(4) above.
Notwithstanding the foregoing, no Hours of Service shall be
credited pursuant to the three immediately preceding sentences
with respect to any absence which commences before April 1,
1985.
(ii) Installment Distribution. As defined in subsection 7.3(d).
(jj) International Index Fund: An Investment Fund consisting
primarily of stocks of established companies based in Europe,
Asia and the Far East, with the objective to match the
performance of the Morgan Stanley Capital International EAFE
Index, or such other similar index as may be selected by the
Named Fiduciary. The International Index Fund shall include
funds transferred as of January 1, 1998 from, and
Contributions allocated as of January 1, 1998 to, the KCTC
International Growth Portfolio Fund accounts of KCTC Heritage
Employees under the KCTC Hourly Plan.
(kk) Investment Fund: An unsegregated fund of the Plan including
the K-C Stock Fund and such other funds as the Named Fiduciary
may establish. The Named Fiduciary may, from time to time, in
its discretion, establish additional funds or terminate any
fund. An Investment Fund may be, but shall not be limited to,
a fund managed by the Trustee, by an insurance company, or by
an investment company regulated under the Investment Company
Act of 1940. An Investment Fund, pending investment in
accordance with the fund purpose, may be invested in
short-term securities of the United States of America or in
other investments of a short-term nature.
(ll) K-C Stock Fund: An Investment Fund consisting of Corporation
Stock, with a portion invested in money market securities to
provide liquidity for Participant transactions. The K-C Stock
Fund shall also include funds transferred as of January 1,
1998 from, and Contributions allocated as of January 1, 1998
to, the
<PAGE> 11
K-C Stock Fund accounts of KCTC Heritage Employees under the
KCTC Hourly Plan.
(mm) KCTC: Kimberly-Clark Tissue Company, a wholly-owned
subsidiary of the Corporation.
(nn) KCTC Heritage Employee: An Employee of KCTC, as of December
31, 1997, who has an Hour of Service on January 1, 1998.
(oo) KCTC Heritage Rollover Account: An Account consisting of
Matching Employer Contributions, as defined under the KCTC
Hourly Plan, and earnings and losses attributable thereto,
transferred from the KCTC Hourly Plan as of January 1, 1998,
and rollovers made under a prior version of this Plan, with
earnings thereon.
(pp) KCTC Hourly Plan: The Kimberly-Clark Tissue Company
Investment Plan for Hourly Employees.
(qq) Long-Term Managed Fund: An Investment Fund consisting
primarily of growth and emerging growth stocks, growth and
income stocks, bonds, and international stocks with a
long-term investment horizon. The Long-Term Managed Fund shall
include funds transferred as of January 1, 1998 from the KCTC
Asset Allocation Fund accounts of KCTC Heritage Employees
under the KCTC Hourly Plan.
(rr) Lump Sum Distribution: A single distribution of the entire
amount of a Participant's Accounts.
(ss) Medium-Term Managed Fund: An Investment Fund consisting
primarily of bonds, growth and income stocks, growth and
emerging growth stocks and money market securities with a
medium-term investment horizon. The Medium-Term Managed Fund
shall include funds transferred as of January 1, 1998 from the
KCTC Balanced Index Fund accounts of KCTC Heritage Employees
under the KCTC Hourly Plan.
(tt) Money Market Fund: An Investment Fund consisting of
short-term debt securities issued or fully guaranteed as to
the payment of principal and interest by the U.S. government
or any agency or instrumentality thereof.
(uu) Months of Service: A calendar month any part of which an
Employee completes an Hour of Service. Except, however, an
Employee shall be credited with a Month of Service for each
month during the 12 month computation period in which he has
not incurred a One-Year Period of Severance. An Employee
shall be credited with a Month of Service for each calendar
month of absence during the 12 month computation period
following the date on which the Employee does not complete an
Hour of Service for any reason other than the Employee quits,
is discharged, retires or dies.
(vv) Named Fiduciary: The Retirement Trust Committee (the members
of which are designated by the Chief Executive Officer of the
Corporation) shall be the Named Fiduciary of the Plan as
defined in ERISA.
<PAGE> 12
(ww) One-Year Period of Severance: The applicable computation
period of 12 consecutive months during which an Employee fails
to accrue a Day of Service. Years of Service and One-Year
Periods of Severance shall be measured on the same computation
period.
An Employee shall not be deemed to have incurred a One-Year
Period of Severance if he completes an Hour of Service within
12 months following his Severance from Service Date.
(xx) Partial Distribution: A distribution of a portion of a
Participant's Accounts.
(yy) Participant: An Eligible Employee who has validly elected to
participate under Section 3.1. He remains a Participant until
all of his Accounts have been distributed pursuant to the
Plan.
(zz) Participating Unit: A specific classification of Employees of
an Employer designated from time to time by the Committee
pursuant to Article X hereof as participating in this Plan.
The classifications so designated are shown in Appendix A.
(aaa) Plan Year: After December 31, 1993, a twelve calendar month
period beginning January 1 and ending the following December
31. The period beginning on April 1, 1993, and ending
December 31, 1993, shall constitute a Plan Year. For the
period prior to April 1, 1993, and after March 31, 1970, each
twelve calendar month periods beginning on April 1 of one year
and ending March 31 of the following year.
For purposes of identification, each Plan Year is designated
in terms of the calendar year in which it commences.
(bbb) Service: Regular employment with the Corporation, a
Subsidiary or an Equity Company.
(ccc) Severance from Service Date: The earlier of:
(i) the date an Employee quits, is discharged, retires or
dies, or
(ii) the first anniversary of the date an Employee is
absent from Service for any reason other than a quit,
discharge, retirement, or death (e.g., disability,
leave of absence, or layoff, etc.)
(ddd) SMI: Schweitzer-Mauduit International, Inc., a Delaware
corporation.
(eee) SMI Stock: The common stock of SMI.
(fff) SMI Stock Fund: An Investment Fund consisting of SMI Stock.
(ggg) Stable Income Fund: An Investment Fund consisting primarily
of investment contracts issued by insurance companies or banks
and in money market securities. The Stable Income Fund shall
include funds transferred as of October 1, 1996 from the Fixed
Income Fund under the prior version of the Plan, and
<PAGE> 13
Contributions allocated to the Fixed Income Fund under the
prior version of the Plan shall be allocated to the Stable
Income Fund. The Stable Income Fund shall include funds
transferred as of January 1, 1998 from, and Contributions
allocated as of January 1, 1998 to, the KCTC Fixed Income Fund
accounts of KCTC Heritage Employees under the KCTC Hourly
Plan. The Stable Income Fund shall also include funds
transferred as of January 1, 1998 from the Salaried Fixed
Income Fund under the Kimberly-Clark Tissue Company Investment
Plan for Salaried Employees and from the KCTC Stable Income
Fund under the Kimberly- Clark Corporation Employees Incentive
Investment Plan.
(hhh) Stock and Cash Distribution: As defined in subsection 7.3(b).
(iii) Stock Index Fund. An Investment Fund consisting of common and
preferred stocks of established corporations and other issues
convertible into such common and preferred stocks, with the
objective to match the performance of the Standard & Poors
(S&P) 500 Stock Index, or such other similar index as may be
selected by the Named Fiduciary. The Stock Index Fund shall
include funds transferred as of October 1, 1996 from the
Diversified Fund under the prior version of the Plan and
Contributions allocated to the Diversified Fund under the
prior version of the Plan shall be allocated to the Stock
Index Fund. The Stock Index Fund shall include funds
transferred as of January 1, 1998 from, and Contributions
allocated as of January 1, 1998 to, the KCTC Index Trust-Total
Stock Market Portfolio and KCTC Windsor Fund accounts of KCTC
Heritage Employees under the KCTC Hourly Plan.
(jjj) Subsidiary: Any corporation, 50% or more of the voting shares
of which are owned directly or indirectly by the Corporation,
which is incorporated under the laws of one of the States of
the United States.
(kkk) Terminated Participant: A Participant who has terminated his
employment with an Employer prior to January 1, 1998 (i) with
the aggregate value of the Participant's Accounts exceeding
$3,500 or (ii) a Participant who has terminated his employment
with an Employer on or after January 1, 1998 with the
aggregate value of the Participant's Accounts exceeding
$5,000, and who has not elected to receive a distribution
under the Plan. A Terminated Participant shall also include a
former employee of KCTC whose account balance under the KCTC
Hourly Plan is transferred to the Plan as of January 1, 1998.
(lll) Timely Notice: A notice in writing on forms, or by electronic
medium, or through a voice response system, prescribed by the
Committee and filed at such places and at such times as shall
be established by Committee rules.
(mmm) Total Compensation: An Eligible Employee's total compensation
as that term is defined in Code section 414(s). Total
Compensation of any Eligible Employee shall not exceed the
limit set forth in Section 11.12.
(nnn) Trust: The Kimberly-Clark Corporation Defined Contribution
Plans Trust pursuant to the trust agreement provided for in
Article V.
(ooo) Trustee: The trustee under the Trust.
<PAGE> 14
(ppp) Unrestricted After-Tax Contributions:
(i) Contributions made by Participants under subsection
3.2(b) on an after-tax basis on account of which no
Company Matching Contribution is made to the Plan on
behalf of the Participant; or
(ii) Employee contributions, as defined in Code Section
401(m) and the regulations thereunder, contributed
prior to April 1, 1990 on account of which a Company
Matching Contribution was made under this Plan on
behalf of a Participant who was employed prior to
April 1, 1989; or
(iii) Before-Tax Contributions in excess of the limitation
under subsection 3.5(a)(i) or in excess of the
limitation under subsection 3.5(b)(i) and which are
recharacterized under subsection 3.5(b)(ii) and any
other Employee contribution as defined under Code
Section 401(m) and the regulations thereunder, on
account of which no Company Matching Contribution was
made to this Plan on behalf of the Participant.
(qqq) Valuation Date: Each Business Day for which the Current Market
Value of a Participant's Accounts is determined for purposes
of this Plan.
(rrr) Year of Service: An Employee shall accrue a Year of Service
for each 365 Days of Service. If the total of an Employee's
Service exceeds his whole Years of Service, then such Employee
shall be credited with an additional fraction of a Year of
Service, the numerator of which shall be the total number of
his Days of Service represented by such excess and the
denominator of which shall be 365. If the total of an
Employee's Service is less than one Year of Service, then such
Employee shall be credited with a fraction of a Year of
Service, the numerator of which shall be the total number of
his Days of Service and the denominator of which shall be 365.
2.2 Construction. Where appearing in the Plan, the masculine shall
include the feminine and the plural shall include the singular, unless
the context clearly indicates otherwise. The words "hereof,"
"herein," "hereunder" and other similar compounds of the word "here"
shall mean and refer to the entire Plan and not to any particular
Section or subsection.
<PAGE> 15
ARTICLE III
PARTICIPATION, CONTRIBUTIONS, AND ALLOCATIONS
3.1 Election to Participate. An Eligible Employee's election to
participate in the Plan shall, if given on Timely Notice,
(a) be effective as of the first Entry Date following his
election, or as soon as administratively possible thereafter,
and
(b) remain in effect as a valid election to participate for each
successive Plan Year.
An election to participate by an Eligible Employee who, immediately
prior to becoming an Eligible Employee, was a participant under the
Kimberly-Clark Corporation Salaried Employees Incentive Investment
Plan shall be effective as soon as administratively possible upon
exercising his election and his accounts thereunder shall be
transferred to this Plan in a manner determined by the Committee.
Notwithstanding the foregoing, each person actively employed on an
hourly basis by the Sani-Fresh International, Inc. division of
Kimberly-Clark Tissue Company at its facility in San Antonio, Texas,
other than a person classified as an "office hourly employee," shall
become a Participant in the Plan on January 1, 1997, and such person's
accounts and investment elections under the Kimberly-Clark Tissue
Company Investment Plan for Hourly Employees (the "KCTC Hourly Plan")
shall be transferred from the K-C Stock Fund in the KCTC Hourly Plan
to the K-C Stock Fund in this Plan on January 1, 1997; provided that
such person who is not actively employed on January 1, 1997 shall
become a Participant in the Plan upon his return to active employment,
and his accounts under the Kimberly-Clark Tissue Company Investment
Plan for Hourly Employees shall be transferred to this Plan in a
manner determined by the Committee.
Notwithstanding the foregoing, a KCTC Heritage Employee in a
Participating Unit who was a participant in the KCTC Hourly Plan as of
January 1, 1998 shall become a Participant in the Plan on January 1,
1998, and such KCTC Heritage Employee's elections in effect under the
KCTC Hourly Plan as of December 31, 1997 shall remain in effect as
provided under this Plan; provided that a KCTC Heritage Employee who
is not actively employed on January 1, 1998 shall become a Participant
in the Plan upon his return to active employment, and his elections in
effect under the KCTC Hourly Plan shall remain in effect as provide
under this Plan, and his accounts under the KCTC Hourly Plan shall be
transferred to this Plan in a manner determined by the Committee.
3.2 Amount of Contributions by and on behalf of Participants.
(a) Before-Tax Contributions. During each Plan Year, Before-Tax
Contributions shall be made on behalf of a Participant by his
Employer for deposit to his Account as follows:
(i) Subject to the provisions of Section 3.5, a
Participant may elect on Timely Notice to make
Before-Tax Contributions to his Account in any whole
percentage equal to an amount which is not less than
1% of his Base Hourly Wages and not more than 15% of
his Base Hourly Wages.
<PAGE> 16
(ii) Before-Tax Contributions shall be deducted from a
Participant's Total Compensation. An election under
this subsection shall remain in effect for so long as
a Participant is eligible to make Before-Tax
Contributions or, if earlier, until changed by a
Participant. A Participant may change his election on
Timely Notice effective as of the Participant's first
payroll check on or after the first day of the
following month, or as soon as administratively
possible thereafter.
(b) After-Tax Contributions.
(i) A Participant may elect on Timely Notice to make
After-Tax Contributions to his Account in any whole
percentage equal to an amount which is not less than
1% of his Base Hourly Wages and not more than 15% of
his Base Hourly Wages.
(ii) An election to make After-Tax Contributions by
regular payroll deduction shall remain in effect for
so long as a Participant is eligible to make
After-Tax Contributions or, if earlier, until changed
by a Participant. A Participant may change such
election on Timely Notice effective as of the first
payroll check on or after the first day of the
following month, or as soon as administratively
possible thereafter.
(iii) After-Tax Contributions equal to the difference
between 5% of a Participant's Base Hourly Wages and
the Participant's Before-Tax Contributions, but not
less than zero (0), shall be classified as Basic
After-Tax Contributions and shall be taken into
account in determining the Company Matching
Contributions made on behalf of the Participant.
(iv) After-Tax Contributions which are not Basic After-Tax
Contributions shall be classified as Unrestricted
After-Tax Contributions and shall not be taken into
account in determining the amount of Company Matching
Contributions made on behalf of Participants.
3.3 General Limitation.
(a) Notwithstanding any other provision of this Article III, no
Contribution shall be made to the Plan which would cause the
Plan to fail to meet the requirements for exemption from tax
or to violate any provisions of the Code.
(b) Notwithstanding any other provision of this Article III, the
Contributions made by and on behalf of a Participant shall not
exceed 20% of his Base Hourly Wages; provided, however, that
effective January 1, 1997, the Contributions made by and on
behalf of a Participant shall not exceed 15% of his Base
Hourly Wages.
3.4 Investment of Contributions by and on behalf of Participants.
(a) Before-Tax Contributions and After-Tax Contributions. On
Timely Notice, a Participant shall elect to allocate in whole
multiples of 1% all of the Before-Tax Contributions and
After-Tax Contributions to be made on his behalf during a Plan
Year to one or more of
<PAGE> 17
(i) the Money Market Fund
(ii) the Stable Income Fund
(iii) the Bond Index Fund
(iv) the Medium-Term Managed Fund
(v) the Long-Term Managed Fund
(vi) the Stock Index Fund
(vii) the Growth Stock Fund
(viii) the International Index Fund, or
(ix) the K-C Stock Fund
An election under this subsection shall remain in effect until
changed by a Participant. A Participant may change his
election and such election shall be effective as of the date
of the Participant's next Contribution following Timely Notice
of the change, or as soon as administratively possible
thereafter.
(b) Notwithstanding any other provision of this Article III, no
Contributions shall be invested in a Participant's Accounts in
the SMI Stock Fund.
3.5 Limitations on Before-Tax Contributions.
(a) Overall Limitation.
(i) Notwithstanding any provision of the Plan to the
contrary, Before-Tax Contributions made on behalf of
a Participant by his Employer for deposit to his
Account shall not exceed $7,000 (or such greater
amount as permitted under applicable regulations to
reflect cost-of-living increases) in any taxable year
of the Participant.
(ii) If a Participant so elects, Before-Tax Contributions
made in excess of the amount permitted in (a)(i) of
this Section (or, if less, their Current Market Value
on the date of the deposit thereof pursuant to this
subsection) shall be deposited to the Participant's
Account as a Basic After-Tax Contribution or
Unrestricted After-Tax Contributions, as applicable,
by such Participant.
(iii) If a Participant does not elect to deposit his
Before-Tax Contributions in excess of the amount
permitted in Section 3.5(a)(i), the percentage of his
Before-Tax Contributions shall be reduced in order to
meet the limitations of Section 3.5(a)(i).
(iv) Basic After-Tax Contributions or Unrestricted
After-Tax Contributions, as applicable, deposited to
a Participant's Account pursuant to (ii) above will
be allocated to the Plan funds in the same manner as
Before-Tax Contributions made on behalf of the
Participant.
(b) Limitations on Actual Deferral Percentage.
(i) In any Plan Year in which the Actual Deferral
Percentage for the group of Highly Compensated
Eligible Employees would be more than the greater of
<PAGE> 18
(A) the Actual Deferral Percentage of all other
Eligible Employees multiplied by 1.25, or
(B) the lesser of (1) 2 percent plus the Actual
Deferral Percentage of all other Eligible
Employees or (2) the Actual Deferral
Percentage of all other Eligible Employees
multiplied by 2.0,
the deferral rate under subsection 3.2(a) of those
Highly Compensated Eligible Employees shall be
reduced (in whole or less than whole percentages) in
descending order by rate of deferral elected until
the Actual Deferral Percentage for the group of
Highly Compensated Eligible Employees is not more than
the greater of (A) or (B); provided, however, that
for Plan Years beginning after December 31, 1996, the
deferral rate under subsection 3.2(a) of those Highly
Compensated Eligible Employees shall be reduced (in
whole or less than whole percentages) in descending
order beginning with the Highly Compensated Eligible
Employee with the highest deferral rate until the
Actual Deferral Percentage for the group of Highly
Compensated Eligible Employees is not more than the
greater of (A) or (B).
For purposes of this subsection, a person shall not
be considered to be an Eligible Employee until such
time as he or she could first have in effect a valid
election to participate in the Plan.
(ii) In order to prevent the multiple use of the
alternative limitations described in subsections
3.5(b)(i)(B) and 4.4(a)(i)(B), the following
provisions shall apply. If the Actual Deferral
Percentage test in subsection 3.5(b)(i) is satisfied
using subsection 3.5(b)(i)(B), the Actual
Contribution Percentage test in subsection 4.4(a)(i)
is satisfied using subsection 4.4(a)(i)(B), and the
combined Actual Deferral Percentage and Actual
Contribution Percentage exceeds the greater of:
(A) the sum of: (I) the greater of the Actual
Deferral Percentage or the Actual
Contribution Percentage for Eligible
Employees other than Highly Compensated
Eligible Employees multiplied by 1.25, and
(II) 2 percent plus the lesser of the Actual
Deferral Percentage or the Actual
Contribution Percentage for Eligible
Employees other than Highly Compensated
Eligible Employees (but not more than the
lesser of the Actual Deferral Percentage or
Actual Contribution Percentage for Eligible
Employees other than Highly Compensated
Eligible Employees multiplied by 2.0), or
(B) the sum of: (I) the lesser of the Actual
Deferral Percentage or the Actual
Contribution Percentage for Eligible
Employees other than Highly Compensated
Eligible Employees multiplied by 1.25, and
(II) 2 percent plus the greater of the Actual
Deferral Percentage or the Actual
Contribution Percentage for Eligible
Employees other than Highly Compensated
Eligible Employees (but not more than the
greater of the Actual Deferral Percentage or
Actual Contribution
<PAGE> 19
Percentage for Eligible Employees other than
Highly Compensated Eligible Employees
multiplied by 2.0),
then the deferral rate under subsection 3.2(a) of
those Highly Compensated Eligible Employees shall be
reduced in accordance with subsection 3.5(b)(i) or
the contribution rate of those Highly Compensated
Eligible Employees shall be reduced in accordance
with subsection 4.4(a)(i), or both as determined by
the Committee, so that there is no multiple use of
the alternative limitation, as described in
regulations under Code section 401(m).
In lieu of the reduction described in this subsection
3.5(b)(ii) and in 3.5(b)(i) above, the Employer may
make qualified nonelective contributions (pursuant to
the regulations under Code sections 401(k) and
401(m)) to be allocated only to the Accounts of
Participants who are not Highly Compensated Eligible
Employees.
Qualified nonelective contributions treated as
elective contributions, whether taken into account to
satisfy the limit set forth in this subsection
3.5(b)(ii) or in 3.5(b)(i) above, shall be fully
vested when made and shall not be distributed before
one of the events described in subsection
4.4(a)(iii).
Any excess contribution resulting from the required
reduction described above shall be corrected in
accordance with subsection 3.5(b)(iii). Any such
excess aggregate contribution resulting from required
reduction shall be corrected in accordance with
subsection 4.4(a)(iii).
(iii) Before-Tax Contributions actually made in excess of
the amount permitted under subsections 3.5(b)(i) and
3.5(b)(ii) shall be recharacterized as Basic
After-Tax Contributions or Unrestricted After-Tax
Contributions, as applicable, by the close of the
Plan Year following the Plan Year for which such
Before-Tax Contributions were made. If such excess
Before-Tax Contributions are not recharacterized as
Basic After-Tax Contributions or Unrestricted After-
Tax Contributions within 2 1/2 months after the close
of the Plan Year for which they were made, a 10
percent excise tax on the amount of such excess
Before-Tax Contributions may apply. Recharacterized
excess Before-Tax Contributions shall be fully vested
when made and shall not be distributed before one of
the events described in subsection 4.4(a)(iii). Such
Contributions (or, if less, their Current Market
Value on the date of the deposit thereof pursuant to
this subsection) shall be deposited to the
Participant's Account as a Basic After- Tax
Contribution or Unrestricted After-Tax Contribution,
as applicable.
(iv) Before-Tax Contributions will be taken into account
for purposes of determining the Actual Deferral
Percentage for a Plan Year only if they relate to
Total Compensation that would have been received by
the Participant during the Plan Year (but for the
election to make Before-Tax Contributions hereunder),
or Total Compensation that is attributable to
services performed by the Participant during the Plan
Year and would
<PAGE> 20
have been received by the Participant within 2 1/2
months after the close of the Plan Year (but for the
election to make Before-Tax Contributions hereunder).
(c) Additional Limitation. Notwithstanding any provision of the
Plan to the contrary, the Committee may limit or adjust the
amount of Before-Tax Contributions in a manner that prevents
contributions in excess of the limit set forth in subsection
3.5(b) above; provided that a Participant may elect to
preserve his total Contributions election under the Plan so
that his Before-Tax Contributions which are limited under
Section 3.5 are automatically made as Basic After-Tax
Contributions or Unrestricted After-Tax Contributions, as
applicable, subject to Section 3.3 above during such period as
his Before- Tax Contributions are so limited.
3.6 Suspension of All Contributions. On Timely Notice and notwithstanding
the provisions of Section 3.2, a Participant may elect to suspend all
of his Contributions, effective as of the Participant's first payroll
check on or after the first day of the following month, or as soon as
administratively possible thereafter. On Timely Notice a Participant
may elect to resume Contributions as of the Participant's first
payroll check on or after the first day of the following month, or as
soon as administratively possible thereafter.
A Participant's Contributions shall be suspended commencing with and
continuing throughout any period during which he fails to qualify as
an Eligible Employee. On Timely Notice upon requalifying as an
Eligible Employee a Participant may elect to make Contributions to his
Accounts and such election shall be effective as soon as
administratively possible.
3.7 Payment of Contributions to Trustee. The Employers shall contribute
or remit to the Trustee no later than 15 days after the end of each
month the amounts deducted or withheld from the Participants'
compensation during the month as Contributions under the Plan.
3.8 Reallocation of Participant's Accounts.
(a) A Participant may, as of any Business Day, elect to (i)
reallocate all or any whole percentage portion, or (ii) effect
a fund transfer of all or any whole percentage portion or
dollar amount, of any of his Employee Accounts or Employer
Accounts among the Investment Funds listed in Section 3,4,
including the SMI Stock Fund; provided, however, that
(i) Company Matching Contributions contributed to a
Participant's Employer Account in the K-C Stock
Fundon or after October 1, 1996 (excluding amounts in
the KCTC Heritage Rollover Account) and earnings and
losses thereon, shall not be reallocated to any other
Employer Account until a Participant attains age 50,
and
(ii) no amounts shall be reallocated or transferred to a
Participant's Employee Accounts or Employer Accounts
in the SMI Stock Fund; and
(iii) effective January 1, 1998, amounts in a Participant's
Employee Accounts or Employer Accounts in the Stable
Income Fund (A) may only be
<PAGE> 21
reallocated or transferred to one or more of the
Investment Funds listed in subsections 3.4(a)(iii)
through 3.4(a)(ix); and (B) once reallocated or
transferred, cannot be transferred to the Money
Market Fund for a period of not less than 90 days.
(b) A Participant's election to reallocate or effect a fund
transfer shall be effective as soon as administratively
possible following Timely Notice, and the amount of such
reallocation shall be determined by the value of the
Participant's interest in any Investment Fund on the Valuation
Date on which such reallocation takes effect.
3.9 Redeposits and Restored Amounts.
(a) Notwithstanding any provision in this Plan to the contrary, on
Timely Notice, an Employee who has forfeited all or a portion
of his Employer Accounts may redeposit such distribution or
withdrawal before the earlier of (i) the date on which the
Employee has been reemployed for five years or (ii) the date
on which the Employee incurs five consecutive One-Year Periods
of Severance following the year of the distribution or
withdrawal. Upon such redeposit, the amount of the forfeiture
associated with the redeposit shall be restored to the
Employee's Account in the K-C Stock Fund from which it was
forfeited. Redeposits shall be allocated to the Plan funds in
the same manner as Before-Tax Contributions made on behalf of
the Participant. The amount redeposited shall be equal to the
total amount distributed or withdrawn which caused the
forfeiture.
(b) No redeposit of such a withdrawal or distribution shall be
permitted if, coincident with or subsequent to the forfeiture
associated with that withdrawal or distribution, an Employee
incurs 5 consecutive One-Year Periods of Severance. For Plan
Years prior to April 1, 1989, and for purposes of this Section
3.9 only, an Employee incurs a One-Year Period of Severance if
he is not an Employee on the last day of a Plan Year.
(c) A Participant who is entitled to no portion of his Employer
Account upon termination of employment shall be deemed to have
received a distribution of zero dollars ($0) from such
account.
(d) Any forfeiture from the Before-Tax Contributions or Basic
After-Tax Contribution Section of his Employer Accounts shall
be restored in accordance with the provisions of this Section
3.9 if the Terminated Participant returns to his employment
with an Employer prior to incurring five consecutive One-Year
Periods of Severance and, effective with forfeitures on or
after October 1, 1996, the Terminated Participant has either
(i) not received a distribution or withdrawal from the
Before-Tax Contributions or Basic After-Tax Contribution
Section of his Employee Accounts or (ii) has redeposited such
distribution or withdrawal as provided in subsection (a)
above.
3.10 Source of and Interest in Before-Tax Contributions. Anything in this
Plan to the contrary notwithstanding, Before-Tax Contributions shall
be made by the Employers out of current or accumulated earnings and
profits, and the Employers shall have no beneficial interest of any
nature whatsoever in any such Contributions after the same have been
received by the Trustee.
<PAGE> 22
3.11 Contributions During Qualified Military Leave. Notwithstanding any
provision of this Plan to the contrary, Contributions and Company
Matching Contributions may be made for periods of qualified military
service in accordance with Section 414(u) of the Code.
<PAGE> 23
ARTICLE IV
EMPLOYER CONTRIBUTIONS
4.1 Contribution Percentage. Subject to Section 4.3, Company Matching
Contributions for each Plan Year shall be 75% of a Participant's
Before-Tax Contributions or Basic After-Tax Contributions on the first
2% of such Participant's Base Hourly Wages per pay period, and 50% of
a Participant's Before-Tax Contributions or Basic After-Tax
Contributions on the next 3% of such Participant's Base Hourly Wages
per pay period.
No Company Matching Contributions shall be made with respect to a
Participant's Unrestricted After-Tax Contributions.
4.2 Allocation and Payment of Company Matching Contributions. Company
Matching Contributions shall be
(a) made out of current or accumulated earnings and profits,
(b) allocated exclusively to the K-C Stock Fund,
(c) made to the Trustee as soon as practicable after the end of
the month in which the related Contributions are deducted or
withheld for payment to the Trustee, and
(d) made in cash, or at the sole option of the Employer, in shares
of Corporation Stock held in the treasury, or both (but not in
authorized but unissued shares) in which event the amount of
any Company Matching Contribution made in Corporation Stock
shall be the Current Market Value thereof on the date of
delivery to the Trustee which, for the purposes of the Plan,
shall be considered as the Trustee's cost of such shares
except where Treasury Regulations sections
1.402(a)-1(b)(2)(ii) and 54.4975- 11(d)(1) require shares of
Corporation Stock acquired while the Plan is an employee stock
ownership plan to have a different cost in order to satisfy
their requirements.
Any forfeiture under the Plan may be applied to reduce Company
Matching Contributions, or if determined by the Committee in its
discretion, to offset administrative expenses of the Plan. A
forfeiture shall be valued at Current Market Value as of the Valuation
Date on which the forfeiture occurred.
4.3 Temporary Suspension of Company Matching Contributions. The Board may
order the suspension of all Company Matching Contributions if, in its
opinion, the Corporation's consolidated net income after taxes for the
last fiscal year is substantially below the Corporation's consolidated
net income after taxes for the immediately preceding fiscal year. Any
such determination by the Board shall be communicated to all Eligible
Employees and to all Participants reasonably in advance of the first
date for which such temporary suspension is ordered.
Except when caused, as determined by the Board, by a change in the
capital structure of the Corporation which has the effect that the
regular cash dividend rate is not in fairness comparable between
successive quarters, any reduction of the regular cash dividend
<PAGE> 24
rate payable on Corporation Stock for any quarter as compared with the
immediately preceding quarter shall automatically result in the
suspension of all Company Matching Contributions for the first Plan
Year commencing after the quarter in which such reduction occurs.
4.4 Limitations on Company Matching Contributions, Unrestricted After-Tax
Contributions and Basic After-Tax Contributions.
(a) Limitations on Actual Contribution Percentage.
(i) In any Plan Year in which the Actual Contribution
Percentage for the group of Highly Compensated
Eligible Employees would be more than the greater of
(A) the Actual Contribution Percentage of all
other Eligible Employees multiplied by 1.25,
or
(B) the lesser of (I) 2 percent plus the Actual
Contribution Percentage of all other Eligible
Employees or (II) the Actual Contribution
Percentage of all other Eligible Employees
multiplied by 2.0,
the contribution rate under subsection 3.2(b) and
Section 4.1 of those Highly Compensated Eligible
Employees shall be reduced (in whole or less than
whole percentages) in descending order until the
Actual Contribution Percentage for the group of
Highly Compensated Eligible Employees is not more than
the greater of (A) or (B); provided, however that for
Plan Years beginning after December 31, 1996 the
contribution rate under Section 3.2 and 4.1 of those
Highly Compensated Eligible Employees shall be
reduced (in whole or less than whole percentages) in
descending order beginning with the Highly
Compensated Eligible Employee with the highest
contribution rate until the Actual Contribution
Percentage for the group of Highly Compensated
Eligible Employees is not more than the greater of (A)
or (B).
For purposes of this subsection, a person shall not
be considered to be an Eligible Employee until such
time as he or she could first have in effect a valid
election to participate in the Plan.
(ii) In order to prevent the multiple use of the
alternative limitations described in subsections
3.5(b)(i)(B) and 4.4(a)(i)(B), the provisions of
subsection 3.5(b)(ii) shall apply.
(iii) After-Tax Contributions and Company Matching
Contributions for the Plan Year (if any) in excess of
the amount permitted under subsection 4.4(a)(i) and
4.4(a)(ii), together with the income or loss
allocable thereto, shall be distributed to the
Participant after the close of the Plan Year and
within 12 months after the close of that Plan Year
(and, if practicable, no later than 2 1/2 months
after the close of the Plan Year in order to avoid
any excise tax imposed on the Employer for excess
aggregate contributions); provided, however, that an
Employer may make qualified nonelective contributions
(as provided under Code section 401(m) and the
regulations
<PAGE> 25
thereunder) to be allocated only to the Accounts of
Participants who are not Highly Compensated Eligible
Employees that, in combination with After-Tax
Contributions and Company Matching Contributions,
satisfy the limit set forth in 4.4(a)(i) and
4.4(a)(ii) above. Such qualified nonelective
contributions (as provided under Code section 401(m)
and the regulations thereunder), whether taken into
account to satisfy the limit set forth in 4.4(a)(i)
and 4.4(a)(ii) above, shall be fully vested when
made, shall be allocated as of a date within the Plan
Year, and shall not be distributed before one of the
following events:
(A) the Eligible Employee's retirement, death,
disability, or separation from service, as
provided under Code section 401(k) and
applicable regulations;
(B) the Eligible Employee's attainment of age 59
1/2 or the Eligible Employee's hardship, as
provided under Code section 401(k) and
applicable regulations;
(C) the termination of the Plan without the
establishment or maintenance of a successor
plan, as provided under Code section 401(k)
and applicable regulations;
(D) the date of the sale or other disposition by
an Employer of substantially all the assets
used in a trade or business to an unrelated
corporation, but only with respect to an
Eligible Employee who continues employment
with the acquiring corporation, provided that
the Employer continues to maintain the plan
after the sale or disposition and the
acquiring corporation does not maintain the
plan after the sale or disposition, in
accordance with Code section 401(k) and
applicable regulations; or
(E) the date of the sale or other disposition by
an Employer of its interest in a subsidiary
to an unrelated entity or individual, but
only with respect to an Eligible Employee who
continues employment with the acquiring
corporation, provided that the Employer
continues to maintain the plan after the sale
or disposition and the acquiring corporation
does not maintain the plan after the sale or
disposition, in accordance with Code section
401(k) and applicable regulations.
The income or loss allocable to an excess aggregate
contribution under subsection 4.4(a)(i) shall be
determined in the manner set forth in subsection
4.4(a)(iii).
(iv) The income or loss allocable to an excess aggregate
contribution shall be determined by multiplying the
income or loss allocable to a Participant's After-Tax
Contributions and Company Matching Contributions for
the Plan Year by a fraction, the numerator of which
is the After-Tax Contributions and Company Matching
Contributions made in excess of the amount permitted
in (a)(i) of this Section and the denominator of
which is the
<PAGE> 26
balance of the After-Tax Contributions and Company
Matching Contributions Sections of the Participant's
Account on the last day of the Plan Year, together
with any After-Tax Contributions and Company Matching
Contributions for the gap period described below, but
reduced by the income allocable to such Sections for
the Plan Year and increased by the loss allocable to
such Sections for the Plan Year. The income or loss
allocable to an excess aggregate contribution shall
include the income or loss allocable for the period
between the end of the Plan Year and the date of
distribution (the "gap period"). The income or loss
allocable to an excess aggregate contribution for the
gap period shall equal 10% of the income or loss
allocable to such contribution as determined above,
multiplied by the number of months that have elapsed
since the end of the Plan Year. For this purpose, a
distribution on or before the 15th of the month shall
be treated as made on the last day of the preceding
month, and a distribution made after the 15th of the
month shall be treated as made on the first day of
the next month.
(b) Additional Limitation. Notwithstanding any provision of the
Plan to the contrary, the Committee may limit or adjust the
amount of After-Tax Contributions and Company Matching
Contributions in a manner that prevents contributions in
excess of the limit set forth in subsection 4.4(a)(i) above.
<PAGE> 27
ARTICLE V
TRUSTEE AND TRUST AGREEMENT
5.1 The Corporation shall enter into a trust agreement with a person or
corporation selected by the Chief Executive Officer of the Corporation
to act as Trustee of Contributions and Company Matching Contributions.
The Trustee shall receive all Contributions and all Company Matching
Contributions and shall hold, manage, administer, and invest the same,
reinvest any income, and, in accordance with instructions and
directions of the Committee subject to the Plan, make distributions.
The trust agreement shall be in such form and contain such provisions
as the Chief Executive Officer of the Corporation may deem necessary
and appropriate to effectuate the purposes of the Plan and to qualify
the Plan and the Trust under the Code. Upon the written request of an
Eligible Employee, a copy of the trust agreement shall be made
available for his inspection.
The Chief Executive Officer of the Corporation may, from time to time,
remove the Trustee or any successor Trustee at any time and any such
Trustee or any successor Trustee may resign. The Chief Executive
Officer of the Corporation shall, upon removal or resignation of a
Trustee, appoint a successor Trustee.
The Trustee's accounts, books, and records relating to the Trust may
be audited annually by auditors selected by the Chief Executive
Officer of the Corporation.
The Trustee's fee shall be paid by the Trustee out of the funds of the
Trust, unless paid by the Corporation in its discretion. Brokerage
fees, asset management fees, investment management fees and other
direct costs of investment, taxes (including interest and penalties),
and administrative expenses of the Plan shall be paid by the Trustee
out of the funds of the Trust to which such costs are attributable,
unless paid by the Corporation in its discretion.
<PAGE> 28
ARTICLE VI
INVESTMENT, PARTICIPANT'S ACCOUNTS, AND VOTING OF STOCK
6.1 Investment of Contributions.
(a) A Participant's Contributions during each Plan Year shall be
invested in the Investment Funds in accordance with the
Participant's allocations under Section 3.4. A Participant's
interest arising from his reallocation for prior Plan Years
shall be invested in the Investment Funds in accordance with
the Participant's directions under Section 3.8. Company
Matching Contributions during each Plan Year shall be invested
in the K-C Stock Fund. All such investments and gains or
losses related thereto shall be allocated to each
Participant's Accounts pursuant to the provisions of Section
6.2.
(b) The Committee shall designate Participant's Contributions and
Company Matching Contributions for payment to the Trustee for
investment, and Employee Accounts and Employer Accounts for
reallocation in accordance with subsection 6.1(a), and shall
advise the Trustee of such designation.
6.2 Participant's Accounts.
(a) Establishment of Accounts. Each Participant shall have
established and maintained for him separate Accounts which,
depending upon the allocation and reallocation options he has
selected, shall consist of Employee Accounts and Employer
Accounts in one or more of the Money Market Fund, the Stable
Income Fund, the Bond Index Fund, the Medium-Term Managed
Fund, the Long-Term Managed Fund, the Stock Index Fund, the
Growth Stock Fund, the International Index Fund, the K-C Stock
Fund and the SMI Stock Fund. Each such Employee Account shall
be subdivided into a Basic After-Tax Contributions Section, a
Before- Tax Contributions Section, and an Unrestricted
After-Tax Contribution Section. Each such Employer Account
shall be subdivided into subsections corresponding to the
Sections of Employee Accounts, other than the Unrestricted
After-Tax Contribution Section.
As soon as practicable following the end of each calendar
quarter, the Committee will cause an annual statement to be
prepared for each Participant which will reflect the status of
the Participant's Accounts in such form as shall be prescribed
by the Committee.
(b) Crediting of Accounts. As of the close of business on each
Valuation Date the designated Accounts of each Participant
shall be appropriately credited with the amounts of his
Contributions and Contributions made on his behalf on that
Valuation Date, or the reallocation or transfer of his other
Accounts, if any, effective on that Valuation Date and his
Employer Account in the K-C Stock Fund shall be credited with
the amount of any Company Matching Contributions made with
respect to him on that Valuation Date.
(c) Valuation of Accounts. Each Participant's Accounts shall be
valued and adjusted each Business Day to preserve for each
Participant his proportionate interest in
<PAGE> 29
the related funds and reflect the effect of income, collected
and accrued, realized and unrealized profits and losses,
expenses, valuation adjustments, and all other transactions
with respect to the related fund as follows:
(i) The Current Market Value of the assets held in each
of the funds shall be determined by the Trustee, and
(ii) The separate balances provided for in subsection
6.2(b) of each Participant's Account under each of
the related funds shall be adjusted by multiplying by
the ratio that the Current Market Value of such fund
as determined under subsection 6.2(c)(i) bears to the
aggregate of the Account balances under such fund.
6.3 Stock Rights, Stock Splits and Stock Dividends. A Participant shall
have no right of request, direction or demand upon the Committee or
the Trustee to exercise in his behalf rights to purchase shares of
Corporation Stock or other securities of the Corporation. The
Trustee, at the direction of the Committee, shall exercise or sell any
rights to purchase shares of Corporation Stock appertaining to shares
of such stock held by the Trustee and shall sell at the direction of
the Committee any rights to purchase other securities of the
Corporation appertaining to shares of Corporation Stock held by the
Trustee. The Accounts of Participants shall be appropriately
credited. Shares of Corporation Stock or SMI Stock received by the
Trustee by reason of a stock split or a stock dividend shall be
appropriately allocated to the Accounts of the Participants.
6.4 Voting of Corporation Stock. A Participant (or in the event of his
death, his Beneficiary) may direct the voting at each annual meeting
and at each special meeting of the stockholders of the Corporation of
that number of whole shares of Corporation Stock held by the Trustee
and attributable to the balances in his K-C Stock Fund Account as of
the Valuation Date coincident with the record date for such meeting.
Each such Participant (or Beneficiary) will be provided with copies of
pertinent proxy solicitation material together with a request for his
instructions as to how such shares are to be voted. The Committee
shall direct the Trustee to vote such shares in accordance with such
instructions and shall also direct the Trustee how to vote any shares
of Corporation Stock at any meeting for which it has not received, or
is not subject to receiving, such voting instructions.
Notwithstanding the foregoing, a Participant's (or Beneficiary's)
voting instructions shall apply to the balances in the K-C Stock Fund
Accounts for all plans maintained by an Employer in which he
participates.
6.5 Voting of SMI Stock. The Trustee shall appoint a proxy committee (the
"Proxy Committee") to direct the voting at each annual meeting and at
each special meeting of the stockholders of SMI of that number of
whole shares of SMI Stock held by the Trustee in the SMI Stock Fund.
The Proxy Committee shall direct the Trustee to vote such shares in
accordance with its instructions. The Proxy Committee shall direct
the Trustee on how to respond to a tender or exchange offer for any or
all shares of SMI Stock held by the Trustee in the SMI Stock Fund, and
the Trustee shall act only in accordance with such directions.
6.6 Tender Offers. A Participant (or in the event of his death, his
Beneficiary) may direct the Trustee in writing how to respond to a
tender or exchange offer for any or all whole shares of Corporation
Stock held by the Trustee and attributable to the balances in his K-C
Stock Fund Account as of the Valuation Date coincident with such
offer. The
<PAGE> 30
Committee shall notify each Participant (or Beneficiary) and exert its
best efforts to timely distribute or cause to be distributed to him
such information as will be distributed to stockholders of the
Corporation in connection with any such tender or exchange offer.
Upon receipt of such instructions, the Trustee shall tender such
shares of Corporation Stock as and to the extent so instructed. If
the Trustee shall not receive instructions from a Participant (or
Beneficiary) regarding any such tender or exchange offer for such
shares of Corporation Stock (or shall receive instructions not to
tender or exchange such shares), the Trustee shall have no discretion
in such matter and shall take no action with respect thereto. With
respect to shares of Corporation Stock in the K-C Stock Fund for which
the Trustee is not subject to receiving such instructions, however,
the Trustee shall tender such shares in the same ratio as the number
of shares for which it receives instructions to tender bears to the
total number of shares for which it is subject to receiving
instructions, and shall have no discretion in such matter and shall
take no action with respect thereto other than as specifically
provided in this sentence. Notwithstanding the foregoing, a
Participant's (or Beneficiary's) voting instructions shall apply to
the balances in the K-C Stock Fund Accounts for all plans maintained
by an Employer in which he participates.
<PAGE> 31
ARTICLE VII
DISTRIBUTION OF ACCOUNTS
7.1 Accounts to be Distributed.
(a) Termination On or After Attainment of Age 55. If a
Participant's employment with an Employer is terminated on or
after his attainment of age 55, he shall be fully vested in
his Accounts and shall be entitled to receive a distribution
of the entire amount then in his Accounts in accordance with
Section 7.6. Notwithstanding the foregoing, if a Participant
is determined by the Committee to be Totally and Permanently
Disabled on or before October 31, 1996 under the prior version
of the Plan and has less than 5 Years of Service, such
Participant shall be fully vested in his Accounts.
(b) Termination Upon Death. In the event that the termination of
employment of a Participant is caused by his death, or a
Terminated Participant dies prior to the first day on which
such Terminated Participant's Accounts are payable, the entire
amount then in his Accounts shall be paid to his Beneficiary
in accordance with Section 7.6 after receipt by the Committee
of acceptable proof of death.
(c) Termination As a Result of Group Termination. In the event
that the termination of employment of a Participant is caused
by reason of his status as a member of a group involved in a
group termination, he shall be entitled to receive a
distribution of the entire amount then in his Accounts in
accordance with Section 7.4, unless action is taken pursuant
to the Plan to segregate the Accounts of all the Participants
in such group from the Trust and arrange for a transfer to or
a merger with a qualified successor plan or trust with respect
thereto. Notwithstanding the foregoing, this subsection 7.1(c)
shall not apply after October 31, 1996.
(d) Termination for Other Reasons. If a Participant's employment
with an Employer is terminated for any other reason, the
Participant shall be entitled to the entire amount in his
Employee Accounts and a portion of his Employer Accounts as
determined in accordance with the following schedule:
<TABLE>
<CAPTION>
Vested Forfeited
Years of Service Percentage Percentage
---------------- ---------- ----------
<S> <C> <C>
Less than 5 0% 100%
5 or more 100% 0%
</TABLE>
Notwithstanding any other provision of this Section 7.1, a
KCTC Heritage Employee shall be fully vested in his Accounts
upon becoming a Participant as of January 1, 1998, and shall
be entitled to receive a distribution of the entire amount in
his Accounts in accordance with Section 7.6.
In the event that the termination of employment of a
Participant is caused by any reason other than the Employee
quits, is discharged, retires or dies, the Participant will be
deemed to have a 12 month period of absence following the
<PAGE> 32
date of such termination of employment, for purposes of
determining the portion of his Employer Accounts which such
Participant shall be entitled to receive in a distribution in
accordance with this subsection.
In the event that the Plan is amended to change the vesting
provisions set forth in this subsection 7.1(d), a Participant
with 3 or more years of Service may elect to have the vested
percentage of the Participant's Employer Accounts determined
pursuant to the vesting provisions in effect prior to the
amendment.
(e) Deferred Distributions. Notwithstanding anything in this
Article VII to the contrary, if the aggregate value of the
Accounts of any Participant exceeds $5,000 as provided under
Code section 411(a)(11), an immediate distribution shall not
be made without the consent of the Participant. A Participant
who fails to consent to a distribution under this subsection
7.1(e) shall continue to participate as a Terminated
Participant and shall be entitled to a distribution of his
Employee Accounts and the vested percentage of his Employer
Accounts. Upon Timely Notice of request for payment, the
Terminated Participant's Employee Accounts and the vested
percentage of his Employer Accounts shall be distributed in
accordance with the provisions of Section 7.6.
7.2 Timing of Distributions. A Participant's election to receive a
distribution of his Accounts shall be effective as soon as practicable
following Timely Notice and the amount of the distribution shall be
determined by the value of the Participant's interest in any
Investment Fund as of the Valuation Date of the distribution. Any
forfeiture with respect to the Accounts of the Participant or
Terminated Participant shall be determined as of the Valuation Date
coincident with such Participant's or Terminated Participant's
termination of employment. Distribution of a Participant's Accounts
shall be made to him or to his Beneficiary after the termination of
his employment and within 60 days following his request for a
distribution.
7.3 Certain Definitions Relating to Distributions and Withdrawals. The
following are forms of distribution under the Plan:
(a) All Stock Distribution. An All Stock Distribution of a
Participant's Accounts shall mean a single distribution as of
the Valuation Date consisting of full shares of Corporation
Stock attributable to the Participant's Employee Accounts and
to the vested percentage of his Employer Accounts, together
with the cash equivalent of the Current Market Value on the
Valuation Date of fractional shares of such stock attributable
to such Accounts.
(b) Stock and Cash Distribution. A Stock and Cash Distribution of
a Participant's Accounts shall mean a single distribution
consisting of:
(i) the cash equivalent of the Current Market Value on
the Valuation Date of the Participant's Employee
Accounts, except his Employee Account in the K-C
Stock Fund, and the vested percentage of his Employer
Accounts, except his Employer Account in the K-C
Stock Fund, and
(ii) full shares of Corporation Stock on the Valuation
Date, attributable to the Participant's Employee
Account in the K-C Stock Fund and to the vested
percentage of his Employer Account in the K-C Stock
Fund, together with
<PAGE> 33
the cash equivalent of the Current Market Value on
the Valuation Date of fractional shares of such stock
attributable to such Accounts, and
(iii) the cash equivalent of any other interest
attributable to the Participant's Accounts, except
the forfeited percentage of his Employer Accounts, on
the Valuation Date.
(c) All Cash Distribution. An All Cash Distribution of a
Participant's Accounts shall mean the same as a Stock and Cash
Distribution, as defined in subsection 7.3(b), except that
clause (ii) in said subsection shall be replaced by the
following clause:
(ii) the cash equivalent of the Current Market Value as of
the Valuation Date of all the shares and fractional
shares of Corporation Stock attributable to the
Participant's Employee Account in the K-C Stock Fund
and to the vested percentage of his Employer Account
in the K-C Stock Fund.
(d) Installment Distribution. An Installment Distribution shall mean the
cash equivalent of the Current Market Value of the Participant's
vested percentage of his Accounts on the Valuation Date, paid monthly
in cash for a period elected by the Participant, which elected period
shall not exceed the lesser of 20 years or the Participant's life
expectancy at the time such Installment Distribution is to commence.
The value of each payment shall be determined on a declining balance
method. Notwithstanding the forgoing provisions of subsection 7.3(d),
a KCTC Heritage Employee may elect to receive an Installment
Distribution on the same basis as a Stock and Cash Distribution or All
Cash Distribution and to be paid monthly or annually.
Prior to the distribution of the final payment of an
Installment Distribution, a Participant may elect:
(i) to receive the remaining balance in his Accounts as a
Lump Sum Distribution;
(ii) to change the elected period of the Installment
Distribution; or
(iii) to receive a Partial Distribution from the remaining
balance in his Accounts.
7.4 Lump Sum and Partial Distributions. A Lump Sum Distribution or a
Partial Distribution may be elected by any Participant in the form of
an All Cash Distribution, a Stock and Cash Distribution or an All
Stock Distribution.
7.5 Installment Distributions. An Installment Distribution may be elected
by any Participant who has reached age 55 or by an eligible KCTC
Heritage Employee who is determined to be Totally and Permanently
Disabled on or before January 1, 1998 under the terms of the KCTC
Hourly Plan. The Beneficiary or former spouse or child who is
designated as an alternate payee under a Qualified Domestic Relations
Order of a Participant who is eligible to elect an Installment
Distribution may elect to receive an Installment Distribution.
<PAGE> 34
7.6 Methods of Distribution.
(a) Distribution by Reason of Death. The Beneficiary of a
Participant to which subsection 7.1(b) applies shall be
entitled to receive a distribution of such Participant's
Accounts in the form elected by the Participant in the
appointment of his Beneficiary. If no such election was made,
such distribution shall be in any form available pursuant to
the terms of the Plan as elected by the Beneficiary. If a
Participant designates a Beneficiary other than his spouse at
the time of such designation, such designation shall not be
valid unless:
(i) the spouse of such Participant consents in writing to
each such election or designation and acknowledges
its effect, and
(ii) such consent is witnessed by a notary public.
No spousal consent described in the immediately preceding
sentence need be furnished, however, with respect to any
election or designation if the Committee is satisfied that
there is no spouse, that the spouse cannot be located, or that
such consent is unobtainable for any other reason provided
under regulations of the Internal Revenue Service.
(b) Distribution Upon Termination of Employment for Reasons Other
than Death. A Participant who is entitled to receive a
distribution of his Accounts due to the termination of his
employment for any reason specified in Section 7.1, except
death, may on Timely Notice elect to receive such distribution
in the form of an All Stock Distribution, a Stock and Cash
Distribution or an All Cash Distribution or, if eligible under
Section 7.5, an Installment Distribution, at any time.
(c) Small Distributions. Notwithstanding any provision of this
Section 7.6 to the contrary, if the aggregate value of a
Participant's Accounts does not exceed $5,000 as provided
under Code section 411(a)(11), the Committee shall direct the
distribution of the Accounts of any Participant as an All
Stock Distribution, a Stock and Cash Distribution or an All
Cash Distribution as elected by the Participant or his
Beneficiary. If no earlier election is made, Timely Notice of
a request for payment shall be deemed to have been given as of
the Valuation Date which is three months following notice of
the Participant's entitlement to a distribution under Section
7.1, and such distribution shall be in the form of an All Cash
Distribution. Such notice shall be provided to a KCTC
Terminated Participant whose account balance was subject to
cashout under the KCTC Hourly Plan but which is transferred
prior to cashout from the KCTC Hourly Plan as of January 1,
1998, and distribution shall be made pursuant to this
provision.
7.7 Miscellaneous.
(a) For the purpose of the Plan, no termination of employment will
be deemed to have occurred in any instance where the person
involved remains in Service or is re-employed by an Employer
prior to receiving a distribution of his Accounts.
(b) In the event of the death, prior to his receipt of a
distribution, of a Participant who at the time of his death
was entitled to receive distribution under subsection 7.6(b)
and elected to receive such distribution in the form of an All
Stock Distribution, a Stock and Cash Distribution, an All Cash
Distribution, or an
<PAGE> 35
Installment Distribution, if eligible under Section 7.5, or
was entitled to receive a distribution under subsection
7.6(c), and if the Committee has notice of the Participant's
death prior to such distribution, then such distribution shall
be made to the Participant's Beneficiary by the same method as
it would have been made to the Participant but for his death.
(c) Notwithstanding anything in this Article VII to the contrary,
the distribution provisions of this Article VII shall not
apply for Terminated Participants or Participants whose
Qualified Domestic Relations Order is pending approval by the
Plan Administrator.
7.8 Required Distributions.
(a) Notwithstanding any provision of the Plan to the contrary, a
Participant's or Terminated Participant's Accounts shall be
distributed commencing no later than the earlier of:
(i) April 1 of the calendar year following the year in
which the Participant or Terminated Participant
attains age 70-1/2, except to the extent that
Section 1121(d)(4) of the Tax Reform Act of 1986
provides otherwise, or
(ii) unless the Participant elects a later date (which can
be no later than the date specified in (i) above),
the 60th day after the latest of:
(A) the close of the Plan Year in which the
Participant attains age 65,
(B) the close of the Plan Year which includes the
date 10 years after the date the Participant
first commenced participating in the Plan, or
(C) the close of the Plan Year in which the
Participant terminated employment with his
Employer.
(b) All distributions from the Plan shall be made in accordance
with the requirements of Code section 401(a)(9) and the
regulations thereunder, including the minimum distribution
incidental benefit requirements.
(c) The Committee may, in its discretion, establish procedures for
making such required distributions consistent with the
provisions hereof.
7.9 Unclaimed Benefits. During the time when a benefit hereunder is
payable to any Terminated Participant or, if deceased, his
Beneficiary, the Committee shall mail by registered or certified mail
to such Participant or Beneficiary, at his last known address, a
written demand for his then address, or for satisfactory evidence of
his continued life, or both. If such information is not furnished to
the Committee within 12 months from the mailing of such demand, then
the Committee may, under rules established by the Committee, in its
sole discretion, declare such benefit, or any unpaid portion thereof,
suspended, with the result that such unclaimed benefit shall be
treated as a forfeiture for the Plan Year within which such 12-month
period ends, but shall be subject to restoration through an Employer
Contribution if the lost Participant or such Beneficiary later files a
claim for such benefit.
<PAGE> 36
7.10 Brown-Bridge Benefit. Notwithstanding any other provision of the
Plan, if a Participant's employment with an Employer is terminated, he
shall be fully vested in his Accounts and shall be entitled to receive
a distribution of the entire amount then in his Accounts in accordance
with Section 7.6. if such Participant meets all of the following
conditions:
(a) immediately prior to his termination of employment he must
have been an Employee of the Brown-Bridge Mill; and
(b) such termination of employment must be involuntary on the part
of the Participant, be caused solely by the elimination of his
job function with the Corporation due to the sale of assets of
the Brown-Bridge Mill under the Assets Purchase Agreement
entered into between the Corporation and Brown-Bridge
Acquisition Corp. dated June 15, 1994, and such termination of
employment must occur on the Closing Date of such Assets
Purchase Agreement.
7.11 Karolton Envelope Benefit. Notwithstanding any other provision of the
Plan, if a Participant's employment with an Employer is terminated, he
shall be fully vested in his Accounts and shall be entitled to receive
a distribution of the entire amount then in his Accounts in accordance
with Section 7.6. if such Participant meets all of the following
conditions:
(a) immediately prior to his termination of employment he must
have been an Employee of Karolton Envelope; and
(b) such termination of employment must be involuntary on the part
of the Participant, be caused solely by the elimination of his
job function with the Corporation due to the sale of assets of
Karolton Envelope under the Assets Purchase Agreement entered
into between the Corporation and KECA Corporation dated
October 29, 1993, and such termination of employment must
occur on the Closing Date of such Assets Purchase Agreement.
7.12 Spenco Medical Corporation Benefit. Notwithstanding any other
provision of the Plan, a Participant shall be fully vested in his
Accounts and shall be entitled to receive a distribution of the entire
amount then in his Accounts in accordance with Section 7.6. if such
Participant is employed by Spenco Medical Corporation on the Closing
Date of the sale of Spenco Medical Corporation under the Agreement and
Plan of Merger entered into between the Corporation and Spenco Medical
Corporation, SBS Enterprises, Inc., Spenco Acquisition Corporation and
Steven B. Smith, dated March 4, 1994. For purposes of this Section, a
Participant described in the preceding sentence shall be treated under
Section 7.6 as if he terminated employment with an Employer for a
reason other than death on the Closing Date; provided, however, that a
distribution pursuant to this Section shall be delayed to the extent
required by the Internal Revenue Service under section
401(k)(2)(B)(i)(I) of the Code.
7.13 Form of ESOP Benefit. Notwithstanding anything in the Plan to the
contrary but subject to the provisions of Sections 7.6 (c) and 7.9,
the form of benefit payment available to a Participant, unless the
Participant elects otherwise, shall be substantially equal periodic
payments (not less frequently than annually) over a period not longer
than the greater of (i) five (5) years, or (ii) in the case of a
Participant whose vested portion of his Accounts exceeds $500,000 (as
adjusted by legislation or for cost-of-living increases), five (5)
<PAGE> 37
years plus one (1) additional year (not exceeding five (5) additional
years) for each $100,000 (or fraction of $100,000) (as adjusted by
legislation or for cost-of-living increases) by which the vested
portion of his Accounts exceeds $500,000 (as adjusted by legislation
or for cost-of-living increases).
7.14 ESOP Dividend Distributions. Dividends paid to the Trust that had
dividend record dates during a Plan Year on Corporation Stock
allocated to a Participant's Accounts shall be paid to that
Participant, or if applicable, to his Beneficiary, in the first
quarter of the Plan Year following the Plan Year in which the
dividends' record dates occurred; provided, however that the amount of
such dividend payment shall not be less than the minimum amount
established by the Committee in its sole discretion. Notwithstanding
the preceding sentence, in the last quarter of each Plan Year, a
Participant who is employed by an Employer or an affiliate of an
Employer on the last day of that Plan Year may elect to have 25%, 50%,
75%, or all of such dividend payments remain in the Trust in lieu of a
distribution under this Section. Dividends retained in the Trust
under this Section shall be invested as directed by the Participant
under Section 3.8. Notwithstanding both the dollar amount (if any) of
any election under this Section and the preceding provisions of this
Section, the amount actually paid under this Section shall not exceed
the lesser of (i) the electing Participant's share of the dividends
subject to such election and (ii) his balance in his Accounts at the
time of payment. A dividend payment shall not be made to a Terminated
Participant or Participant whose qualified domestic relations order is
pending approval by the Plan Administrator.
7.15 Kimberly-Clark Integrated Services Corporation Benefit.
Notwithstanding any other provision of the Plan, if a Participant's
employment with an Employer is terminated, he shall be fully vested in
his Accounts and shall be entitled to receive a distribution of the
entire amount then in his Accounts in accordance with Section 7.6. if
such Participant meets all of the following conditions:
(a) immediately prior to his termination of employment he must
have been an Employee of Kimberly-Clark Integrated Services
Corporation; and
(b) such termination of employment must be involuntary on the part
of the Participant, be caused solely by the elimination of his
job function with Kimberly-Clark Integrated Services
Corporation due to the cessation of operations of
Kimberly-Clark Integrated Services Corporation on or about
June 30, 1995, and such termination of employment must occur
on or after the date of such cessation of operations.
7.16 Direct Rollovers. This Section applies to distributions and
withdrawals made under Articles VII and VIII on or after January 1,
1993. Notwithstanding any provision of the Plan to the contrary that
would otherwise limit a distributee's election under this Section, a
distributee may elect, at the time and in the manner prescribed by the
Committee, to have any portion of an eligible rollover distribution
paid directly to a single eligible retirement plan specified by the
distributee in a direct rollover.
For purposes of this Section, the following definitions shall apply:
(a) An "eligible rollover distribution" is any distribution of all
or any portion of the balance to the credit of the
distributee, except that an eligible rollover distribution
does not include: any distribution that is one of a series of
substantially equal
<PAGE> 38
periodic payments (not less frequently than annually) made for
the life (or life expectancy) of the distributee and the
distributee's designated beneficiary, or for a specified
period of ten years of more; any distribution to the extent
that such distribution is required under Code section
401(a)(9); and the portion of any distribution that is not
includable in gross income (determined without regard to the
exclusion for net unrealized appreciation with respect to
employer securities).
(b) An "eligible retirement plan" is an individual retirement
account described in Code section 408(a), an individual
retirement annuity described in Code section 408(b), an
annuity plan described in Code section 403(a), or a qualified
trust described in Code section 401(a), that accepts the
distributee's eligible rollover distribution. However, in the
case of an eligible rollover distribution to the surviving
spouse, an eligible retirement plan is limited to an
individual retirement account or individual retirement
annuity.
(c) A "distributee" includes a Participant. In addition, the
Participant's surviving spouse and the Participant's spouse or
former spouse who is the alternate payee under a qualified
domestic relations order, as defined in Code section 414(p),
are distributees with regard to the interest of the spouse or
former spouse.
(d) A "direct rollover" is a payment by the Plan to the eligible
retirement plan specified by the distributee.
This Section shall not be construed to alter any of the requirements
for distributions or withdrawals under the remaining provisions of
this Article VII and the provisions of Article VIII.
7.17 Specialty Products Benefit. Notwithstanding any other provision of
the Plan, if a Participant's employment with an Employer is
terminated, he shall be fully vested in his Accounts and shall be
entitled to receive a distribution of the entire amount then in his
Accounts in accordance with Section 7.6 if such Participant meets all
of the following conditions:
(a) immediately prior to his termination of employment, he must
have been an Employee whose employment duties are principally
related to the Specialty Products business of the Corporation;
(b) such termination of employment must be involuntary on the part
of the Participant, be caused solely by the elimination of his
job function with the Corporation due to the spinoff of SMI on
or about the fourth quarter of 1995, and such termination of
employment must occur on or after the SMI Distribution Date;
and
(c) immediately following his termination of employment, he must
have become employed by SMI.
7.18 Limitations on Distribution of Before-Tax Contributions.
Notwithstanding any other provision of the Plan to the contrary,
Before-Tax Contributions and earnings thereon (except for the
withdrawal of earnings provided under subsection 8.3(b)) shall not be
distributed before one of the following events:
<PAGE> 39
(a) the Eligible Employee's retirement, death, disability, or
separation from service, as provided under Code section 401(k)
and applicable regulations;
(b) the Eligible Employee's attainment of age 59 1/2 or the
Eligible Employee's hardship, as provided under Code section
401(k) and applicable regulations;
(c) the termination of the Plan without the establishment or
maintenance of a successor plan, as provided under Code
section 401(k) and applicable regulations;
(d) the date of the sale or other disposition by an Employer of
substantially all the assets used in a trade or business to an
unrelated corporation, but only with respect to an Eligible
Employee who continues employment with the acquiring
corporation, provided that the Employer continues to maintain
the plan after the sale or disposition and the acquiring
corporation does not maintain the plan after the sale or
disposition, in accordance with Code section 401(k) and
applicable regulations; or
(e) the date of the sale or other disposition by an Employer of
its interest in a subsidiary to an unrelated entity or
individual, but only with respect to an Eligible Employee who
continues employment with the acquiring corporation, provided
that the Employer continues to maintain the plan after the
sale or disposition and the acquiring corporation does not
maintain the plan after the sale or disposition, in accordance
with Code section 401(k) and applicable regulations.
7.19 Lakeview Benefit. Notwithstanding any other provision of the Plan, if
a Participant's employment with an Employer is terminated, he shall be
fully vested in his Accounts and shall be entitled to receive a
distribution of the entire amount then in his Accounts in accordance
with Section 7.6 if such Participant meets all of the following
conditions:
(a) immediately prior to his termination of employment he must
have been an Employee at the Lakeview Mill, Lakeview Diaper
Plant, Lakeview Feminine Care Plant, Lakeview Distribution
Center, or Badger-Globe Mill; and
(b) such termination of employment must be involuntary on the part
of the Participant and be caused solely by the elimination of
his job function with the Corporation due to the sale of
assets of the tissue manufacturing facilities of the Lakeview
Mill under the Assets Purchase Agreement entered into between
the Corporation and American Tissue Mills of Neenah L.L.C.
dated as of August 8, 1996, and such termination of employment
must occur on or within 30 days after the Closing Date of such
Assets Purchase Agreement.
7.20 Coosa Benefit. Notwithstanding any other provision of the Plan, if a
Participant's employment with an Employer is terminated, he shall be
fully vested in his Accounts and shall be entitled to receive a
distribution of the entire amount then in his Accounts in accordance
with Section 7.7 if such Participant meets all of the following
conditions:
(a) immediately prior to his termination of employment he must
have been (i) an Employee of Coosa Pines Golf Club Inc., or
(ii) an Employee of an Employer located at Coosa Pines,
Alabama; and
<PAGE> 40
(b) such termination of employment must be involuntary on the part
of the Participant and be caused solely by the elimination of
his job function from his Employer due to the sale of the
assets of the Coosa pulp and newsprint mill facility and
woodlands under the Assets Purchase Agreement entered into
between the Corporation and Alliance Forest Products, Inc.
dated as of February 14, 1997, and such termination of
employment must occur on or within 30 days after the Closing
Date of such Assets Purchase Agreement.
7.21 KIMPAK(R) Benefit. Notwithstanding any other provision of the Plan,
if a Participant's employment with an Employer is terminated, he shall
be fully vested in his Accounts and shall be entitled to receive a
distribution of the entire amount then in his Accounts in accordance
with Section 7.7 if such Participant meets all of the following
conditions:
(a) immediately prior to his termination of employment he must
have been an Employee at the Badger-Globe Mill; and
(b) such termination of employment must be involuntary on the part
of the Participant and be caused solely by the elimination of
his job function with the Corporation due to the sale of
assets of the KIMPAK(R) product line under the Assets Purchase
Agreement entered into between the Corporation and National
Packaging Services Corporation dated as of September 30 1996,
and such termination of employment must occur on or within one
year after the Closing Date of such Assets Purchase Agreement.
<PAGE> 41
ARTICLE VIII
WITHDRAWALS AND LOANS
8.1 Regular Withdrawals. A Participant, subject to the conditions stated
below, may make the following Regular Withdrawals:
(a) Such amounts as the Participant may elect from the
Unrestricted After-Tax Contribution Section of his Accounts;
(b) Such amounts as the Participant may elect from the Basic
After-Tax Contribution Section of his Accounts;
(c) Such amounts as a Participant may elect from his Employer
Accounts, provided such amounts are vested and such amounts
(disregarding earnings and losses) have been in the Plan for
at least 24 months; and
(d) Such amounts as a KCTC Heritage Employee who has at least 5
Years of Service may elect from his KCTC Heritage Rollover
Account. Notwithstanding the foregoing, a KCTC Heritage
Employee who has less than 5 Years of Service may withdraw
Matching Employer Contributions (as such term is defined in
the KCTC Hourly Plan), from his KCTC Heritage Rollover Account
provided such amounts are vested and such amounts
(disregarding earnings and losses) have been in the Plan
(including periods under the KCTC Hourly Plan) for at least 24
months. A KCTC Heritage Employee who has less than 5 Years of
Service may withdraw Retirement Contributions, if applicable
(as such term is defined in the Kimberly-Clark Tissue Company
Investment plan for Salaried Employees) provided such amounts
(disregarding earnings and losses) have been in the Plan
(excluding periods under the KCTC Hourly Plan) for at least 24
months. A KCTC Heritage Employee who has attained age 59 1/2
may withdraw any funds from his KCTC Heritage Rollover Account
provided such amounts are vested.
Any Participant not otherwise described above shall not be eligible to
make withdrawals from his Employer Accounts.
In the event of a Regular Withdrawal from the Basic After-Tax
Contribution section of a Participant's Accounts pursuant to
subsection 8.1(b), such Participant's Contributions under the Plan
shall be suspended for a period of 12 months following such
withdrawal.
8.2 Over Age 59 1/2 Withdrawals. A Participant who has attained age 59 1/2
may withdraw such amounts as he may elect from the Before-Tax
Contributions Sections of his Accounts.
8.3 Hardship Withdrawals.
(a) Upon the application of any Participant who has not attained
age 59 1/2, the Committee, in accordance with its uniform
nondiscriminatory rules, may permit such Participant to
withdraw all or a portion (subject to subsection (b) below) of
the amount in the Before-Tax Contributions Section of his
Accounts if the Participant is able to demonstrate financial
hardship and provided, however, that all amounts available as
Regular Withdrawals described in Section 8.1 shall first
<PAGE> 42
be withdrawn. A Participant shall be considered to have
demonstrated financial hardship only if the Participant
demonstrates that the purpose of the withdrawal is to meet his
immediate and heavy financial needs, the amount of the
withdrawal does not exceed such financial needs, and the
amount of the withdrawal is not reasonably available from
other resources. A Participant making application under this
Section 8.3 shall have the burden of demonstrating a financial
hardship to the Committee, and the Committee shall not permit
withdrawal under this subsection without first receiving such
proof.
The Participant will be deemed to have demonstrated that the
purpose of the withdrawal is to meet his immediate and heavy
financial needs only if he represents that the distribution is
on account of:
(i) medical expenses (as described in Code section
213(d)) incurred by the Participant, his spouse, or
any of his dependents, or necessary for such persons
to obtain medical care;
(ii) the purchase (excluding mortgage payments) of a
principal residence for the Participant;
(iii) the payment of tuition, related educational fees, and
room and board expenses for the next 12 months of
post-secondary education for the Participant, his
spouse, children, or dependents;
(iv) payments necessary to prevent eviction from or
foreclosure on the Participant's principal residence
or the mortgage on that residence; or
(v) any other condition determined by the Committee
pursuant to its uniform Committee Rules to represent
a financial hardship.
Moreover, the Participant will be deemed to have demonstrated
that the amount of the withdrawal is unavailable from his
other resources and in an amount not in excess of that
necessary to satisfy his immediate and heavy financial needs
only if each of the following requirements is satisfied:
(i) the Participant represents that the distribution is
not in excess of the amount of his immediate and
heavy financial needs, except that the withdrawal may
include any amounts necessary to pay any federal,
state, or local income taxes or penalties reasonably
anticipated to result from the withdrawal; and
(ii) the Participant has obtained all distributions, other
than hardship distributions, and all nontaxable loans
currently available to him under all other qualified
and nonqualified deferred compensation plans
currently maintained by an Employer.
In the event of any withdrawal by a Participant pursuant to
this Section 8.3, (i) such Participant's Contributions under
this Plan and his contributions under all other qualified and
nonqualified deferred compensation plans maintained by an
Employer shall be suspended for a period of 12 months
following such withdrawal, and (ii) for the calendar year
following the calendar year in which
<PAGE> 43
such withdrawal occurred, the amount of the Participant's
Before-Tax Contributions may not exceed the limitation on the
amount of Before-Tax Contributions which may be contributed,
as set forth in subsection 3.5(a), less the amount of any
Before-Tax Contributions made by said Participant during the
calendar year of the withdrawal.
(b) No hardship withdrawal shall exceed the balance then credited
to the Participant's Before-Tax Contributions Section of his
Accounts (or, if less, the Current Market Value thereof) nor
shall any withdrawal include earnings on such Contributions
after December 31, 1988.
8.4 Distribution of Withdrawals.
(a) Regular Withdrawals and Over Age 59-1/2 Withdrawals. Regular
Withdrawals and Over Age 59-1/2 Withdrawals shall be permitted
as of any Valuation Date following Timely Notice. A
distribution of a withdrawal shall be made as soon as
practicable after the withdrawal request or such other time as
specified by Committee rule. A Participant who is entitled to
receive a Regular Withdrawal or an Over Age 59-1/2 Withdrawal
may on Timely Notice elect to receive such distribution in the
form of an All Stock Distribution, a Stock and Cash
Distribution or an All Cash Distribution.
(b) Hardship Withdrawals. If a Participant's application for a
hardship withdrawal is approved, the effective date for such
withdrawal shall be the Valuation Date coincident with or
immediately following such approval. If the Participant's
application for a hardship withdrawal is denied and, on
appeal, subsequently approved, the effective date for such
withdrawal shall be the Valuation Date coincident with or
immediately following the date of the Committee's decision on
the appeal. Hardship withdrawals will be made only in the
form of an All Cash Distribution.
8.5 Miscellaneous.
(a) Notwithstanding anything in this Article VIII to the contrary,
the withdrawal and loan provisions of this Article VIII shall
not apply for Terminated Participants or Participants whose
qualified domestic relations order is pending approval by the
Plan Administrator.
(b) In the event of the death of a Participant on or after the
Valuation Date with respect to which the Participant has
elected to make a withdrawal, but prior to the actual
distribution thereof, and if the Committee has notice of the
Participant's death prior to such distribution, then such
distribution shall be made to the Participant's Beneficiary by
the same method as it would have been made to the Participant
but for his death.
8.6 Waiver of Right to Withdraw. A Participant who is on an assignment
outside of the United States may waive his right to make a withdrawal
pursuant to this Article VIII. Any such waiver shall be in writing,
in a form acceptable to the Committee and signed by the Participant,
and shall be irrevocable. The duration of a waiver hereunder may be
for a stated period or until the occurrence of a specified event, at
the election of the Participant, but in absence of such an election
the waiver shall expire upon termination
<PAGE> 44
or completion of the Participant's assignment outside the United
States.
8.7 Participant Loans. For purposes of this Section 8.7, "Participant"
shall mean a Participant who is a "party in interest" as defined in
ERISA section 3(14). Loans shall be available to Participants on a
reasonably equivalent basis on the following conditions:
(a) A Participant may, on Timely Notice, request a loan from the
Plan under the following terms and conditions, provided that
such Participant may not request a loan from the Plan if the
Participant has an outstanding loan (whether such outstanding
loan has become a deemed distribution under Section 72(p) of
the Code) from the Plan at the time of such request.
(b) Loan amounts shall be at least $1,000 and shall not exceed the
lesser of (i) 50% of Before-Tax Contributions Section of the
Participant's Account as of the date of the loan request, less
any amounts payable for pending withdrawal or (ii) $50,000
(reduced by the highest outstanding loan balance under the
Plan during the one-year period ending on the day before the
date on which the loan is made). Loans under any other
qualified plan sponsored by the Employer or an Affiliated
Employer shall be aggregated with loans under the Plan in
determining whether or not the limitation stated herein has
been exceeded. Loan amounts shall be taken from the
Before-Tax Contributions Section of the Participant's
Accounts.
(c) Loans shall be classified as either a General Purpose Loan or
a Primary Residence Loan.
(i) A General Purpose Loan may be requested on Timely
Notice for any purpose other than for the purchase of
a primary residence for the Participant. General
Purchase Loans shall be for a term not to exceed 4
years from the date of the loan.
(ii) A Primary Residence Loan may be requested on Timely
Notice for the purchase (excluding mortgage payments)
or construction of a Participant's primary residence
and may be made only upon receipt of proper
documentation from the Participant. Primary
Residence Loans shall be for a term not to exceed 10
years from the date of the loan.
(d) Loans shall be nonrenewable and nonextendable. Loans shall be
repaid, through payroll deduction or, in the case of a
Participant who is on an unpaid leave of absence and who does
not elect to suspend his loan payments hereunder, by manual
repayments.
(e) Loans shall be repaid in periodic payments (not less
frequently than quarterly) with substantially level
amortization required over the term of the loan; provided,
however, that a Participant with an outstanding loan who is on
an unpaid leave of absence, or qualified military service
pursuant to Section 414(u)(4) of the Code, may elect, at the
commencement of such leave of absence, to suspend his loan
repayments for the lesser of (i) the period of the leave of
absence or (ii) 12 months. Notwithstanding the foregoing, a
Participant whose Contributions are suspended pursuant to
Section 3.6 may not elect to suspend his loan repayments.
<PAGE> 45
(f) Loans may be prepaid in full at any time without penalty;
provided however, that a Participant who provides notification
of his intention to prepay a loan and fails to do so may not
resubmit notification for such period as determined by the
Committee. Partial prepayments shall be not be permitted.
(g) Each Participant receiving a loan hereunder shall receive a
statement reflecting the charges involved in each transaction,
including the dollar amount and annual interest rate of the
finance charges.
(h) All loans hereunder shall be considered investments of a
segregated account of the Trust directed by the borrower. All
loans shall be secured by up to 50% of the vested portion of
the Participant's Accounts, less any portion of the
Participant's Account which has been assigned to an alternate
payee under a qualified domestic relations order, to the
extent necessary to secure the outstanding loan amount and
applied first to the Before-Tax Contributions section of the
Participant's Accounts. No additional security shall be
permitted.
(i) Interest shall be charged at a rate determined by the
Committee and shall be determined with regard to interest
rates currently being charged on similar commercial loans by
persons in the business of lending money.
(j) Any loan made to a Participant hereunder shall be evidenced by
a promissory note which shall be executed by the Participant
in such manner and form as the Committee shall determine.
Such promissory note shall contain the irrevocable consent of
the Participant to payroll deductions.
(k) Fees chargeable in connection with a Participant's loan may be
charged, in accordance with a uniform and nondiscriminatory
policy established by the Committee, against the Participant's
Account to whom the loan is granted.
(l) All loans shall be made from the Before-Tax Contributions
section of the Participant's Accounts and pro rata from the
Investment Fund in which the Before-Tax Contributions section
of such Participant's Account are then invested.
(m) Loan repayments to the Plan by the Participant shall be made
on an after-tax basis and shall be allocated to the Before-Tax
Contributions section of the Participant's Account in the
Investment Funds in the proportion that Before-Tax
Contributions section such Account is represented and shall be
invested in the Investment Funds on the basis of the
Participant's investment election under Section 3.4 in effect
at the time of such loan repayment.
(n) In the event that the Participant fails to make any required
loan repayment before a loan is repaid in full, the unpaid
balance of the loan, with interest due thereon, shall become
immediately due and payable, unless the Committee determines
otherwise. In the event that a loan becomes immediately due an
payable (in "default") pursuant to this Section 8.7, the
Participant (or his Beneficiary, if the Beneficiary is the
surviving spouse, in the event of the Participant's death) may
satisfy the loan by paying the outstanding balance in full
within such time as may be specified by the Committee in a
uniform and nondiscriminatory manner. Otherwise, any such
outstanding loan shall be deducted from the portion of the
Participant's vested Accounts (first from the Before-Tax
Contributions section of
<PAGE> 46
his Accounts) before any benefit which is or becomes payable
to the Participant or his Beneficiary is distributed. In the
case of a benefit which becomes payable to the Participant or
his Beneficiary pursuant to Article 7 (or would be payable to
the Participant or Beneficiary but for such individual's
election to defer the receipt of benefits), the deduction
described in the preceding sentence shall occur on the
earliest date following such default on which the Participant
or Beneficiary could receive payment of such benefit, had the
proper application been filed or election been made,
regardless of whether or not payment is actually made to the
Participant or Beneficiary on such date. In the case of a
benefit which becomes payable under any other provision, the
deduction shall occur on the date such benefit is paid. The
Committee shall also be entitled to take any and all other
actions necessary and appropriate to enforce collection of the
outstanding balance of the loan. Failure of the Committee to
strictly enforce Plan rights with respect to a default on a
Plan loan shall not constitute a waiver of such rights.
(o) The outstanding loan balance or balances of a KCTC Heritage
Employee under the KCTC Hourly Plan shall be transferred to,
and repayment made to, this Plan effective as of January 1,
1998, and shall be subject to the terms of this Plan to the
extent not inconsistent with the terms of the outstanding
loan; provided, however, that a KCTC Heritage Employee whose
loan is transferred to this Plan with past due loan payments
shall have an extended grace period, as determined by the
Committee, in which to avoid default under this Section 8.7,
provided the total grace period under this Plan and the KCTC
Hourly Plan does not exceed the time period as provided under
the rules of the Internal Revenue Service. Such outstanding
loan balance shall be taken into account for all purposes
under this Section 8.7.
<PAGE> 47
ARTICLE IX
INCENTIVE INVESTMENT PLAN COMMITTEE
9.1 Membership. The Committee shall consist of at least three persons who
shall be officers or directors of the Corporation or Eligible
Employees. Members of the Committee shall be appointed from time to
time by, and shall serve at the pleasure of, the Chief Executive
Officer of the Corporation. The Committee shall elect one of its
members as chairman. The Committee shall not receive compensation for
its services. Committee expenses shall be paid by the Corporation.
9.2 Powers. The Committee shall have all such powers as may be necessary
to discharge its duties hereunder, including, but not by way of
limitation, the power to construe or interpret the Plan, to determine
all questions of eligibility hereunder, to determine the method of
payment of any Accounts hereunder, to adopt rules relating to the
giving of Timely Notice, and to perform such other duties as may from
time to time be delegated to it by the Chief Executive Officer of the
Corporation. The Committee may prescribe such forms and systems and
adopt such rules and actuarial methods and tables as it deems
advisable. It may employ such agents, attorneys, accountants,
actuaries, medical advisors, or clerical assistants (none of whom need
be members of the Committee) as it deems necessary for the effective
exercise of its duties, and may delegate to such agents any power and
duties, both ministerial and discretionary, as it may deem necessary
and appropriate.
9.3 Procedures. A majority of the Committee members shall constitute a
quorum. The Committee may take any action upon a majority vote at any
meeting at which a quorum is present, and may take any action without a
meeting upon the unanimous written consent of all members. All action
by the Committee shall be evidenced by a certificate signed by the
chairman or by the secretary to the Committee. The Committee shall
appoint a secretary to the Committee who need not be a member of the
Committee, and all acts and determinations of the Committee shall be
recorded by the secretary, or under his supervision. All such records,
together with such other documents as may be necessary for the
administration of the Plan, shall be preserved in the custody of the
secretary.
9.4 Rules and Decisions. All rules and decisions of the Committee shall
be uniformly and consistently applied to all Eligible Employees and
Participants under this Plan in similar circumstances and shall be
conclusive and binding upon all persons affected by them. The
Committee shall have absolute discretion in carrying out its duties
under the Plan.
9.5 Authorization of Payments. Subject to the provisions hereof, it shall
be the duty of the Committee to furnish the Trustee with all facts and
directions necessary or pertinent to the proper disbursement of the
Trust funds.
9.6 Books and Records. The records of the Employers shall be conclusive
evidence as to all information contained therein with respect to the
basis for participation in the Plan and for the calculation of
Contributions and Company Matching Contributions.
9.7 Perpetuation of the Committee. In the event that the Corporation
shall for any reason cease to exist, then, unless the Plan is adopted
and continued by a successor, the
<PAGE> 48
members of the Committee at that time shall remain in office until the
final termination of the Trust, and any vacancies in the membership of
the Committee caused by death, resignation, disability or other cause,
shall be filled by the remaining member or members of the Committee.
9.8 Claim Procedure. The Committee shall establish a procedure for
handling all claims by all persons. In the event any claim is denied,
the Committee shall provide a written explanation to the person
stating the reasons for denial.
9.9 Allocation or Reallocation of Fiduciary Responsibilities. The Named
Fiduciary may allocate powers and responsibilities not specifically
allocated by the Plan, or reallocate powers and responsibilities
specifically allocated by the Plan, to designated persons,
partnerships or corporations other than the Committee, and the members
of the Committee may allocate their responsibilities under the Plan
among themselves. Any such allocation, reallocation, or designation
shall be in writing and shall be filed with and retained by the
secretary of the Committee with the records of the Committee.
Notwithstanding the foregoing, no reallocation of the responsibilities
provided in the Trust to manage or control the Trust assets shall be
made other than by an amendment to the Trust.
9.10 Plan Administrator. The Corporation shall be the Plan Administrator
as described in ERISA.
9.11 Service of Process. The Corporation shall be the designated recipient
of service of process with respect to legal actions regarding the
Plan.
<PAGE> 49
ARTICLE X
AMENDMENT AND TERMINATION
10.1 Amendment and Termination. While it is intended that the Plan shall
continue in effect indefinitely, the Board may from time to time
modify, alter or amend the Plan or the Trust, and may at any time
order the temporary suspension or complete discontinuance of Company
Matching Contributions or may terminate the Plan, provided, however,
that
(i) no such action shall make it possible for any part of the
Trust assets (except such part as is used for the payment of
expenses) to be used for or diverted to any purpose other than
for the exclusive benefit of Participants or their
Beneficiaries;
(ii) no such action shall adversely affect the rights or interests
of Participants theretofore vested under the Plan; and
(iii) in the event of termination of the Plan or complete
discontinuance of Company Matching Contributions hereunder,
all rights and interests of Participants not theretofore
vested shall become vested as of the date of such termination
or complete discontinuance.
Any action permitted to be taken by the Board under the foregoing
provision regarding the modification, alteration or amendment of the
Plan or the Trust may be taken by the Committee, using its prescribed
procedures, if such action
(1) is required by law, or
(2) is required by collective bargaining, or
(3) is estimated not to increase the annual cost of the Plan by
more than $1,000,000, or
(4) is estimated not to increase the annual cost of the Plan by
more than $25,000,000, provided such action is approved and
duly executed by the Chief Executive Officer of the
Corporation.
Any action taken by the Board or Committee shall be made by or
pursuant to a resolution duly adopted by the Board or Committee and
shall be evidenced by such resolution or by a written instrument
executed by such persons as the Board or Committee shall authorize for
such purpose.
The Committee shall report to the Chief Executive Officer of the
Corporation before January 31 of each year all action taken by it
hereunder during the preceding calendar year.
However, nothing herein shall be construed to prevent any
modification, alteration or amendment of the Plan or of the Trust
which is required in order to comply with any law relating to the
establishment or maintenance of the Plan and Trust, including but not
limited to the establishment and maintenance of the Plan or Trust as a
qualified employee plan or trust under the Code, even though such
modification, alteration, or
<PAGE> 50
amendment is made retroactively or adversely affects the rights or
interests of a Participant under the Plan.
<PAGE> 51
ARTICLE XI
MISCELLANEOUS
11.1 Non-Guarantee of Employment. Nothing contained in this Plan shall be
construed as a contract of employment between an Employer and a
Participant, or as a right of any Participant to be continued in the
employment of his Employer, or as a limitation of the right of an
Employer to discharge any Participant with or without cause.
11.2 Rights to Trust Assets. No Participant or any other person shall have
any right to, or interest in, any part of the Trust assets upon
termination of his employment or otherwise, except as provided from
time to time under this Plan, and then only to the extent of the
amounts due and payable to such person out of the assets of the Trust.
All payments as provided for in this Plan shall be made solely out of
the assets of the Trust and neither the Employers, the Trustee, nor
any member of the Committee shall be liable therefor in any manner.
The Employers shall have no beneficial interest of any nature
whatsoever in any Employer Contributions after the same have been
received by the Trustee, or in the assets, income or profits of the
Trust, or any part thereof, except to the extent that forfeitures as
provided in the Plan shall be applied to reduce the Employer
Contributions.
11.3 Disclaimer of Liability. Neither the Trustee, the Employers, nor any
member of the Committee shall be held or deemed in any manner to
guarantee the funds of the Trust against loss or depreciation.
11.4 Non-Recommendation of Investment. The availability of any security
hereunder shall not be construed as a recommendation to invest in such
security. The decision as to the choice of investment of
Contributions must be made solely by each Participant, and no officer
or employee of the Corporation or the Trustee is authorized to make
any recommendation to any Participant concerning the allocation of
Contributions hereunder.
11.5 Indemnification of Committee. The Employers shall indemnify the
Committee and each of its members and hold them harmless from the
consequences of their acts or conduct in their official capacity,
including payment for all reasonable legal expenses and court costs,
except to the extent that such consequences are the result of their
own willful misconduct or breach of good faith.
11.6 Selection of Investments. The Trustee shall have the sole discretion
to select investments for the various funds provided for herein even
though the same may not be legal investments for trustees under the
laws applicable thereto.
11.7 Non-Alienation. Except as otherwise provided herein, no right or
interest of any Participant or Beneficiary in the Plan and the Trust
shall be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, charge, attachment,
garnishment, execution, levy, bankruptcy, or any other disposition of
any kind, either voluntary or involuntary, prior to actual receipt of
payment by the person entitled to such right or interest under the
provisions hereof, and any such disposition or attempted disposition
shall be void.
<PAGE> 52
11.8 Facility of Payment. If the Committee has notice that a Participant
entitled to a distribution hereunder, or his Beneficiary, is incapable
of caring for his own affairs, because of illness or otherwise, the
Committee may direct that any distribution from such Participant's
Accounts may be made, in such shares as the Committee shall determine,
to the spouse, child, parent or other blood relative of such
Participant, or his Beneficiary, or any of them, or to such other
person or persons as the Committee may determine, until such date as
the Committee shall determine that such incapacity no longer exists.
The Committee shall be under no obligation to see to the proper
application of the distributions so made to such person or persons,
and any such distribution shall be a complete discharge of any
liability under the Plan to such Participant, or his Beneficiary, to
the extent of such distribution.
11.9 Allocation in the Event of Advance Contributions. In the event that
the Employer's tax deduction with respect to amounts contributed to
the Plan pursuant to Articles III and IV for the months in the final
quarter of a Plan Year results in such amounts being deemed advanced
contributions of the Employer with respect to the taxable year of the
Employer ending within such Plan Year, such amounts shall be
considered allocated pursuant to Articles III and IV, as applicable,
as of the last day of such taxable year.
11.10 Action by a Committee of the Board. Any action which is required or
permitted to be taken by the Board under the Plan may be taken by the
Compensation Committee of the Board or any other duly authorized
committee of the Board designated under the By-Laws of the
Corporation.
11.11 Qualified Domestic Relations Orders. Anything in this Plan to the
contrary notwithstanding:
(a) Alternate Payee's Accounts. An alternate payee under a
domestic relations order determined by the Corporation to be a
qualified domestic relations order (as defined in Code section
414(p)) shall have established and maintained for him separate
Accounts similar to the Accounts of the Participant specified
in the qualified domestic relations order. The alternate
payee's Accounts shall be credited with his interest in such
Participant's Accounts, as determined under the qualified
domestic relations order. Except to the extent specifically
provided by the qualified domestic relations order, no amount
of the non-vested portion, if any, of the Participant's
Employer Accounts shall be credited to the alternate payee's
Accounts. Subsection 6.2(c) and Sections 6.3, 6.4, 6.5 and
6.6 shall apply to the alternate payee's Accounts as if the
alternate payee were a Participant.
(b) Investment of Alternate Payee's Accounts. An alternate payee
may on Timely Notice elect to reallocate or transfer all or
any percentage portion of any of his Employee Accounts or
Employer Accounts or both, consistent with subsection 6.1(a).
An alternate payee's interest arising from this reallocation
shall be invested in the various funds in accordance with the
alternate payee's directions. For purposes of subsection
6.1(b), any such reallocation shall be treated as a
reallocation in accordance with subsection 6.1(a).
Notwithstanding any other provision of this Section 11.11, no
amounts in any of the other funds shall be reallocated to an
alternate payee's Accounts in the SMI Fund.
<PAGE> 53
(c) Subject to the provisions of subsections (b) above, with
regard to an alternate payee's Employee Accounts or Employer
Accounts in the SMI Stock Fund, an alternate payee may elect
to reallocate amounts invested in such Accounts to any other
Accounts effective as of any Valuation Date.
(d) Alternate Payee's Beneficiary. Except to the extent otherwise
provided by the qualified domestic relations order relating to
an alternate payee:
(i) the alternate payee may designate on Timely Notice a
beneficiary,
(ii) if no such person is validly designated or if the
designated person predeceases the alternate payee,
the beneficiary of the alternate payee shall be his
estate, and
(iii) the beneficiary of the alternate payee shall be
accorded under the Plan all the rights and privileges
of the Beneficiary of a Participant.
(e) Distribution to Alternate Payee. An alternate payee shall be
entitled to receive a distribution from the Plan in accordance
with the qualified domestic relations order relating to the
alternate payee. Such distribution may be made only in a
method provided in Section 7.7 and shall include only such
amounts as have become vested; provided, however, that if a
qualified domestic relations order so provides, a Lump Sum
Distribution or Partial Distribution of the total vested
amount credited to the alternate payee's Accounts may be made
to the alternate payee before the date that the Participant
specified in the qualified domestic relations order attains
his earliest retirement age (as defined in Code section
414(p)(4)(B)). A qualified domestic relations order may
provide that until a distribution is made to the alternate
payee, the alternate payee may make withdrawals in accordance
with Article VIII as if the alternate payee were an employed
Participant; provided, however, that (i) hardship withdrawals
from the portion of the alternate payee's Accounts
attributable to the Before-Tax Contributions Section of the
Accounts of the Participant specified in the qualified
domestic relations order shall not be available to an
alternate payee and (ii) no withdrawal suspension penalties
shall be imposed on account of a withdrawal by an alternate
payee.
(f) Vesting of Alternate Payee's Accounts. In the event that the
qualified domestic relations order provides for all or part of
the non-vested portion of the Participant's Employer Accounts
to be credited to the Accounts of the alternate payee, such
amounts shall vest and/or be forfeited at the same time and in
the same manner as the Accounts of the Participant specified
in the qualified domestic relations order; provided, however,
that no forfeiture shall result to the Accounts of the
alternate payee due to any distribution to or withdrawal by
the Participant from his Accounts or any distribution to or
withdrawal by the alternate payee from the vested portion of
the Accounts of the alternate payee.
11.12 Compensation Limit. In addition to other applicable limitations which
may be set forth in the Plan and notwithstanding any other contrary
provision of the Plan, compensation taken into account under the Plan
for Plan Years beginning on January 1, 1989 and ending prior to
January 1, 1994, shall not exceed $200,000, adjusted for changes in
the cost of living as provided in Code section 415(d), and
compensation taken into account
<PAGE> 54
under the Plan for Plan Years beginning on or after January 1, 1994,
shall not exceed $150,000, adjusted for changes in the cost of living
as provided in Code sections 401(a)(17)(B) and 415(d).
In applying the above limitation, the Family Members of a Highly
Compensated Eligible Employee who is subject to the Family Member
aggregation rules of Code section 414(q)(6) because such Highly
Compensated Eligible Employee is either a "Five Percent Owner" (as
defined within Subsection 2.1(hh) of the Employer or an Affiliated
Employer or one of the ten Highly Compensated Eligible Employees paid
the greatest "Compensation" (as defined within Subsection 2.1(hh)
during the Year and such Highly Compensated Eligible Employee, shall
be treated as a single Participant, except that for this purpose
"Family Members" shall include only the affected Highly Compensated
Eligible Employee's spouse and any lineal descendants who have not
attained age 19 before the close of the Year. If, as a result of the
application of such rules, the adjusted limitation is exceeded, then
the limitation shall be prorated among the Highly Compensated Eligible
Employee and Family Members in proportion to each one's Total
Compensation prior to the application of this limitation, or adjusted
in accordance with any other method permitted by applicable
regulations. Notwithstanding the foregoing, this paragraph shall not
apply for Plan Years beginning after December 31, 1996.
<PAGE> 55
ARTICLE XII
LIMITATIONS ON BENEFITS
12.1 Definitions and Rules.
(a) Definitions. For purposes of Article XII, the following
definitions and rules of interpretation shall apply.
(i) "Annual Additions" to a Participant's Accounts under
this Plan is the sum, credited to a Participant's
Accounts for any Limitation Year, of:
(A) Company contributions,
(B) forfeitures, if any, and
(C) Participant Contributions.
(ii) "Annual Benefit" -
(A) A benefit which is payable annually in the
form of a straight life annuity under a
defined benefit plan maintained by the
Company which is subject to the limitations
of Code section 415. In the case of such a
benefit which is not payable in the form of a
straight life annuity, the benefit will be
adjusted in accordance with subsection
12.1(a)(ii)(C) below.
(B) When there is a transfer of assets or
liabilities from one qualified plan to
another, the Annual Benefit attributable to
the assets transferred shall not be taken
into account by the transferee plan in
applying the limitations of Code section 415.
The Annual Benefit payable on account of the
transfer for any individual that is
attributable to the assets transferred will
be equal to the annual benefit transferred on
behalf of such individual multiplied by a
fraction, the numerator of which is the value
of the total assets transferred and the
denominator of which is the value of the
total liabilities transferred.
(C) In the case of a retirement benefit under a
defined benefit plan subject to the
limitations of Code section 415(b) which is
in any form other than a straight life
annuity, such benefit will be adjusted to a
straight life annuity beginning at the same
age which is the actuarial equivalent of such
benefit in accordance with applicable
regulations and rules determined by the
Commissioner, but without taking into
account:
(1) the value of a qualified joint and
survivor annuity (as defined in Code
section 401(a)(11)(G)(iii) and the
regulations thereunder) provided by
a defined benefit plan to the extent
that such value exceeds the sum of
(a) the
<PAGE> 56
value of a straight life annuity
beginning on the same date and (b)
the value of any post-retirement
death benefits which would be
payable even if the annuity were not
in the form of a joint and survivor
annuity,
(2) the value of benefits that are not
directly related to retirement
benefits (such as, but not limited
to, pre-retirement disability and
death benefits), and
(3) the value of benefits provided by a
defined benefit plan which reflect
post-retirement cost-of-living
increases to the extent that such
increases are in accordance with
Code section 415(d) and the
regulations thereunder.
(D) In the case of a retirement benefit beginning
before the Social Security Retirement Age
under a defined benefit plan subject to the
limitations of Code section 415(b), such
benefit will be adjusted to the actuarial
equivalent of a benefit beginning at the
Social Security Retirement Age in accordance
with applicable regulations and rules
determined by the Commissioner, but this
adjustment is only for purposes of applying
the dollar limitation described in Code
section 415(b)(1)(A) to the Annual Benefit of
the Participant.
(E) If a Participant has less than 10 Years of
Vesting Service with the Company at the time
the Participant begins to receive retirement
benefits under a defined benefit plan, the
benefit limitations described in Code section
415(b)(1) and (4) are to be reduced by
multiplying the otherwise applicable
limitation by a fraction, the numerator of
which is the number of Years of Vesting
Service with the Company as of, and
including, the current Limitation Year, and
the denominator of which is 10. For purposes
of this paragraph (E), Years of Vesting
Service shall be determined in accordance
with such defined benefit plan.
(F) In the case of a retirement benefit beginning
after the Social Security Retirement Age
under a defined benefit plan subject to the
limitations of Code section 415(b), such
benefit will be adjusted to the actuarial
equivalent of a benefit beginning at the
Social Security Retirement Age in accordance
with applicable regulations and rules
determined by the Commissioner, but this
adjustment is only for purposes of applying
the dollar limitation described in Code
section 415(b)(1)(A) to the Annual Benefit of
the Participant.
(G) For purposes of this Section, the "Social
Security Retirement Age" shall mean the age
used as the retirement age under section
216(l) of the Social Security Act, applied
without regard to the age increase factor and
as if the early retirement age under section
216(l)(2) of the Social Security Act were 62.
(iii) "Company" - any corporation which is a member of a
controlled group of corporations (as defined in Code
section
<PAGE> 57
414(b) and modified by Code section 415(h)) or an
affiliated service group (as defined in section
414(m) of the Code) which includes an Employer; any
trades or businesses (whether or not incorporated)
which are under common control (as defined in Code
section 414(c) and modified by Code section 415(h))
with an Employer; or any other entity required to be
aggregated with an Employer pursuant to Code section
414(o).
(iv) "Compensation" with respect to a Limitation Year -
(A) includes amounts actually paid or made
available to a Participant (regardless of
whether he was such during the entire
Limitation Year);
(1) as wages, fees for professional
service, and other amounts received
for personal services actually
rendered in the course of employment
with the Company including but not
limited to commissions, compensation
for services on the basis of a
percentage of profits and bonuses;
(2) for purposes of (i) above, earned
income from sources outside the
United States (as defined in Code
section 911(b)); whether or not
excludable from gross income under
Code section 911 or deductible under
Code section 913;
(3) amounts described in Code sections
104(a)(3), 105(a) and 105(h) but
only to the extent that these
amounts are includable in the gross
income of the Participant;
(4) amounts paid or reimbursed by the
Company for moving expenses incurred
by the Participant, but only to the
extent that these amounts are not
deductible by the Participant under
Code section 217;
(5) value of a nonqualified stock option
granted to the Participant, but only
to the extent that the value of the
option is includable in the gross
income of the Participant in the
taxable year in which granted;
(6) the amount includable in the gross
income of a Participant upon making
the election described in Code
section 83(b).
(B) excludes -
(1) amounts contributed to this Plan by
Employers on behalf of Participants
as Before-Tax Contributions (and not
considered Basic After-Tax
Contributions under Section
3.5(a)(ii) nor recharacterized as
Basic After-Tax Contributions under
Section 3.5(b)(iii)) and any amount
which is contributed or deferred by
the Employer at the election of the
Employee under Section 125 of the
Code;
<PAGE> 58
provided, however that for Limitation
Years beginning after December 31,
1997, such amounts shall be included
as "Compensation" with respect to
such Limitation Year.
(2) contributions made by the Company to
a plan of deferred compensation to
the extent that, before the
application of the Code section 415
limitations to that plan, the
contributions are not includable in
the gross income of the
Participant for the taxable year in
which contributed and any
distributions from a plan of
deferred compensation, regardless of
whether such amounts are includable
in the gross income of the
Participant when distributed;
provided however, any amounts
received by a Participant pursuant
to an unfunded nonqualified plan
shall be considered as Compensation
in the year such amounts are
includable in the gross income of
the Participant;
(3) amounts realized from the exercise
of a nonqualified stock option, or
recognized when restricted stock (or
property) held by a Participant
either becomes freely transferable
or is no longer subject to a
substantial risk of forfeiture
pursuant to Code section 83 and the
regulations thereunder;
(4) amounts realized from the sale,
exchange or other disposition of
stock acquired under a qualified
stock option;
(5) other amounts which receive special
tax benefits such as premiums for
group term life insurance (but only
to the extent that the premiums are
not includable in the gross income
of the Participant); and
(6) Compensation in excess of the limit
set forth in Section 11.12.
In lieu of the above definition of "Compensation,"
effective for Plan Years beginning after December 31,
1991, the following alternative definitions of
"Compensation" in (A) or (B) below may be applied
with respect to a Limitation Year, as determined by
the Committee in its discretion:
(A) Wages within the meaning of Section 3401(a)
of the Code and all other payments of
compensation to an Employee by his Employer
(in the course of the Employer's trade or
business) for which the Employer is required
to furnish the Employee a written statement
under Section 6041(d), 6051(a)(3), and 6052
of the Code, but excluding amounts paid or
reimbursed by the Employer for moving
expenses incurred by an Employee, but only to
the extent that at the time of the payment it
is reasonable to believe that these amounts
are deductible by the Employee under Section
217 of the Code, and determined without
regard to any rules under Section 3401(a) of
the Code that limit the remuneration included
in wages
<PAGE> 59
based on the nature or location of the
employment or the services performed.
(B) Wages within the meaning of Section 3401(a)
of the Code (for purposes of income tax
withholding at the source) of the Participant
but determined without regard to any rules
that limit the remuneration included in wages
based on the nature or location of the
employment or the services performed.
For Limitation Years after December 31, 1997,
"Compensation" hereunder includes amounts contributed
or deferred by the Employer on behalf of the Employee
under sections 125 or 401(k) of the Code.
(v) "Limitation Year" - a calendar year;
(vi) "Maximum Permissible Amount" -
(A) for a Limitation Year, with respect to any
Participant, subject to the rule in paragraph
(B), the lesser of
(1) $30,000 (or, if greater, 1/4 of the
dollar limitation in effect under
Code section 415(b)(1)(A)), or
(2) 25% of the Participant's
Compensation for the Limitation
Year.
(B) As of January 1 of each calendar year, the
dollar limitation set forth in subparagraph
(A)(1) above shall be adjusted automatically
for cost-of-living increases to equal the
dollar limitation as determined by the
Commissioner for that calendar year under
Code section 415(d)(1)(B). This adjusted
dollar limitation applies for the Limitation
Year ending with that calendar year.
(vii) "Projected Annual Benefit" - the Annual Benefit to
which a Participant would be entitled under a defined
benefit plan maintained by the Company on the
assumptions that he or she continues employment until
the normal retirement age (or current age, if that is
later) thereunder, that his or her Compensation
continues at the same rate as in effect for the
Limitation Year under consideration until such age,
and that all other relevant factors used to determine
benefits under the Plan remain constant as of the
current Limitation Year for all future Limitation
Years;
(b) Other Rule. For purposes of applying the limitations of Code
section 415(b), (c) and (e) applicable to a Participant for a
particular Limitation Year, all qualified defined contribution
plans (without regard to whether a plan has been terminated)
ever maintained by the Company will be treated as part of this
Plan and all qualified defined benefit plans (without regard
to whether a plan has been terminated) ever maintained by the
Company will be treated as one defined benefit plan.
<PAGE> 60
12.2 Limits.
(a) Annual Addition Limit. The amount of the Annual Addition
which may be credited under this Plan to any Participant's
Accounts as of any allocation date shall not exceed the
Maximum Permissible Amount (based upon his Compensation up to
such allocation date) reduced by the sum of any Annual
Additions made to the Participant's Accounts under this Plan
as of any preceding allocation date within the Limitation
Year. If an allocation date of this Plan coincides with an
allocation date of any other qualified defined contribution
plan maintained by the Company, the amount of the Annual
Additions which may be credited under this Plan to any
Participant's Accounts as of such date shall be an amount
equal to the product of the amount to be credited under this
Plan without regard to this Section 12.2 multiplied by the
lesser of 1.0 or a fraction, the numerator of which is the
amount described in this subsection (a) of Section 12.2 during
the Limitation Year and the denominator of which is the amount
that would otherwise be credited on this allocation date under
all plans without regard to this Section 12.2. If
contributions to this Plan by or on behalf of a Participant
are to be reduced as a result of this Section 12.2, such
reduction shall be effected by first reducing any Unrestricted
After-Tax Contributions and second, if and to the extent
necessary, by proportionately reducing any Basic After-Tax
Contributions and corresponding Company Matching Contributions
and then, if and to the extent necessary, by proportionately
reducing any Before-Tax Contributions and corresponding
Company Matching Contributions. If as a result of a
reasonable error in estimating a Participant's Compensation,
or under the limited facts and circumstances which the
Commissioner finds justify the availability of the rules set
forth in this Section 12.2, the allocation of Annual Additions
under the terms of the Plan for a particular Participant would
cause the limitations of Code section 415 applicable to that
Participant for the Limitation Year to be exceeded, the excess
amounts shall not be deemed to be Annual Additions in that
Limitation Year if they are treated as follows:
(i) The excess amounts in the Participant's Account
consisting of Participant Contributions and
Contributions made on his behalf and any increment
attributable thereto shall be paid to the
Participant as soon as administratively feasible.
(ii) The excess amounts in the Participant's Account
consisting of Company Matching Contributions shall be
used to reduce Company Matching Contributions for the
next Limitation Year (and succeeding Limitation
Years, as necessary) for all Participants in the
Plan.
(b) Overall Limit. For any Participant of this Plan who at any
time participated in a defined benefit plan maintained by the
Company, the rate of benefit accrual by such Participant in
each defined benefit plan in which the Participant
participates during the Limitation Year will be reduced to the
extent necessary to prevent the sum of the following
fractions, computed as of the close of the Limitation Year,
from exceeding 1.0:
(i) The Projected Annual Benefit of the Participant under
the defined benefit plan
over
<PAGE> 61
The lesser of (1) the product of 1.25 multiplied by
the dollar limitation in effect under Code section
415(b)(1)(A) for such Limitation Year or (2) the
product of 1.4 multiplied by the amount which may be
taken into account under Code section 415(b)(1)(B)
with respect to such Participant for such Limitation
Year,
plus
(ii) The sum of Annual Additions to such Participant's
Accounts under this Plan in such Limitation Year and
for all prior Limitation Years
over
The sum of the lesser of the following amounts
determined for such year and for each prior year of
service with the Company: (1) the product of 1.25
multiplied by the dollar limitation in effect under
Code section 415(c)(1)(A) for such Limitation Year or
(2) the product of 1.4 multiplied by 25% of the
Participant's Compensation for such Limitation Year.
(c) Special Rules Applicable to Computation of Overall Limit.
(i) For purposes of applying the defined contribution
plan fraction in Section 12.2(b), for any Limitation
Year beginning after December 31, 1975, the following
rules shall apply with respect to Limitation Years
before January 1, 1976:
(A) The aggregate amount taken into account in
determining the numerator of such fraction is
deemed not to exceed the aggregate amount
taken into account in determining the
denominator of the fraction.
(B) The amount taken into account for purposes of
subsection 12.1(a)(i)(C)(1) is an amount
equal to the excess of the aggregate amount
of the Participant's contributions for such
years during which he was an active
participant in the Plan over 10% of the
Participant's aggregate Compensation for all
such years, multiplied by a fraction, the
numerator of which is 1.0 and the denominator
of which is the number of years beginning
before January 1, 1976, during which the
Participant participated in the Plan.
Participant contributions made on or after
October 2, 1973, shall be taken into account
for purposes of the preceding sentence only
to the extent that the amount of such
contributions was permissible under a plan as
in effect on that date.
(ii) In any case where the sum of the fractions in Section
12.2(b) is greater than 1.0 calculated as of the
close of the last Limitation Year beginning before
January 1, 1983 for a Participant in accordance with
regulations prescribed by the Commissioner pursuant
to Section 235(g)(3) of the Tax Equity and Fiscal
Responsibility Act of 1982, an amount shall be
<PAGE> 62
subtracted from the numerator of the defined
contribution plan fraction so that the sum of such
fractions does not exceed 1.0 for such Limitation
Year.
(d) Repeal of Overall Limit. For Limitation Years beginning after
December 31, 1999, the overall limit described in subsection
12.2(b) and (c) shall no longer apply under the Plan.
<PAGE> 63
ARTICLE XIII
MERGER
No merger or consolidation with or transfer of any assets or liabilities to any
other plan after September 2, 1974, shall be made unless, upon completion
thereof, the value of each Participant's Account shall immediately after said
merger, consolidation, or transfer be equal to or greater than the value of the
Participant's Account immediately before the merger, consolidation, or transfer
(if the Plan had then terminated).
<PAGE> 64
ARTICLE XIV
TOP-HEAVY REQUIREMENTS
14.1 Top-Heavy Requirements. Notwithstanding any other provisions of this
Plan, the following rules shall apply for any Plan Year if as of the
last day of the preceding Plan Year, based on valuations as of such
date, the sum of the present value of accrued benefits and Accounts of
"key employees" (within the meaning of Code section 416) exceeds 60%
of a similar sum for all employees under each plan of the Employer or
any Affiliated Employer in which a "key employee" participates and
each other plan of the Employer or any Affiliated Employer which
enables any such plan to meet the requirements of Code section
401(a)(4) or 410. A Plan Year during which such rules apply shall be
known as a "Top-Heavy Plan Year."
(a) Vesting. A Participant who is credited with an Hour of
Service during the Top-Heavy Plan Year, or in any Plan Year
after the Top-Heavy Plan Year, and who has completed at least
three years of Service shall have a nonforfeitable right to
100% of his Employer Accounts and no such amount may become
forfeitable if the Plan later ceases to be Top-Heavy nor may
such amount be forfeited under the provisions of Code sections
411(a)(3)(B) (relating to suspension of benefits upon
reemployment) or 411(a)(3)(D) (relating to forfeitures upon
withdrawal of mandatory contributions). If the Plan become
Top-Heavy and later ceases to be Top-Heavy, this vesting
schedule shall no longer apply and benefits which have not at
such time vested under this schedule shall vest only in
accordance with other provisions of this Plan, provided that
any Participant with at least 3 years of Service shall be
entitled to continue to utilize this schedule for vesting
purposes by making an election at the time and in the manner
specified by the Committee.
(b) Required Contributions. Each Employer shall contribute on
behalf of each employee eligible to participate in the Plan,
the lesser of:
(i) 3% of such employee's compensation (within the
meaning of Code section 415); or
(ii) the percentage of such employee's compensation
(within the meaning of Code section 415) which is
equal to the percentage at which contributions were
made for that Plan Year on behalf of the "key
employee" for whom such percentage is the greatest
for such Plan Year, as prescribed by Code section
416(c)(2)(B) and regulations thereunder;
provided, however, that any contributions for any employee
required of any Employer by the above provisions of this
subsection 14.1(b) shall be reduced by the amount of any
Company Matching Contribution made with respect to such Plan
Year for such employee under Article IV of this Plan. Any
contribution made pursuant to this subsection 14.1(b) shall be
allocated to the Employer K-C Stock Account on behalf of the
employee for whom such contribution is made.
(c) Additional Limitations. No allocations may be made to the
Account of a Participant the sum of whose defined benefit plan
fraction and defined contribution plan fraction, as defined in
Code section 415(e), exceeds 1.0 when
<PAGE> 65
the dollar amounts, as defined in Section 12.2(b) hereof, are
multiplied by 1.0 rather than 1.25.
The provisions of this Section 14.1 shall be interpreted in
accordance with the provisions of Code section 416 and any
regulations thereunder, which are hereby expressly
incorporated by reference.
(d) Coordination. In the event a top heavy minimum contribution
or benefit is required under this Plan or a defined benefit
plan of an Employer that covers a Participant, the top heavy
minimum contribution or benefit, as appropriate, shall be
provided in this Plan. In the event a top heavy minimum
contribution is required under this Plan or another defined
contribution plan of an Employer that covers a Participant,
the top heavy minimum contribution shall be provided in the
other plan.
<PAGE> 66
APPENDIX A
LIST OF EMPLOYERS, PARTICIPATING UNITS
AND EFFECTIVE DATES OF PARTICIPATION IN THE PLAN
<TABLE>
<CAPTION>
List of Employers and Participating Units Effective Date
- - - ----------------------------------------- --------------
<S> <C>
Avent, Inc. --
No Participating Units
K-C Aviation Inc. --
No Participating Units
Kimberly-Clark Corporation
(b) Atlas Mill: All hourly employees of this unit who are represented by the April 1, 1981
Kimberly-Clark Atlas Union, including those on temporary assignment in other
classifications or at other units or Employers, but excluding employees on
temporary assignment from another unit, Employer or classification.
(c) Beech Island Mill: All hour employees of this unit, including those on February 1, 1968
temporary assignment in other classifications or at other units or
Employers, but excluding employees on temporary assignment from another
unit, Employer or classification.
(d) Berkeley Mills: All hourly employees of this unit, including those on August 1, 1967
temporary assignment in other classifications or at other units or
Employers, but excluding employees on temporary assignment from another
unit, Employer or classification.
(h) Kimtech Plant: All hourly machinist employees of this unit who are January 1, 1988
represented by Lodge No. 1855 of the International Association of Machinists (Kimtech Ltd. -
and Aerospace Workers, AFL-CIO, including those on temporary assignment in January 1, 1984
other classifications or at other units or Employers, but excluding through December
employees on temporary assignment from another unit, Employer or 31, 1987)
classification.
(i) Fullerton Mill: All hourly employees of this unit who are represented by October 1, 1986 to
the Association of Western Pulp & Paperworkers, Local No. 672, including December 31, 1996
those on temporary assignment in other classifications or at other units or
Employers, but excluding employees on temporary assignment from another
unit, Employer or classification.
</TABLE>
<PAGE> 67
<TABLE>
<CAPTION>
List of Employers and Participating Units Effective Date
- - - ----------------------------------------- --------------
<S> <C>
(j) LaGrange Mill: All nonexempt salaried employees of this unit, including January 1, 1986
those on temporary assignment in other classifications or at other units or
Employers, but excluding employees on temporary assignment from another
unit, Employer or classification.
(k) Lexington Mill: All nonexempt salaried employees of this unit, including October 1, 1985
those on temporary assignment in other classifications or at other units or
Employers, but excluding employees on temporary assignment from another
unit, Employer or classification.
(l) Maumelle Facility: All nonexempt salaried employees of this unit, including July 1, 1992
those on temporary assignment in other classifications or at other units or
Employers, but excluding employees on temporary assignment from another
unit, Employer or classification.
(m) Munising Mill: All hourly employees of this unit who are represented by the October 1, 1982
United Paperworkers International Union, Locals No. 87 and 96, including
those on temporary assignment in other classifications or at other units or
Employers, but excluding employees on temporary assignment from another
unit, Employer or classification.
(n) Neenah Mill: All hourly employees of this unit who are represented by The April 1, 1979
United Paperworkers International Union, affiliated with the AFL-CIO, Local
Union No. 482, including those on temporary assignment in other
classifications or at other units or Employers, but excluding employees on
temporary assignment from another unit, Employer or classification.
(o) Neenah Paper: All hourly employees of this unit who are represented by the April 1, 1979
United Paperworkers International Union, Local No. 1170, including those on
temporary assignment in other classifications or at other units or
Employers, but excluding employees at the Whiting Mill and employees on
temporary assignment from another unit, Employer or classification.
(p) Neenah Paper - Whiting Mill: All hourly employees of this unit who are April 1, 1993
represented by the United Paperworkers International Union, AFL-CIO, Local
370, including those on temporary assignment in other classifications or at
other units or Employers, but excluding employees on temporary assignment
from another unit, Employer or classification.
</TABLE>
<PAGE> 68
<TABLE>
<CAPTION>
List of Employers and Participating Units Effective Date
- - - ----------------------------------------- --------------
<S> <C>
(q) New Milford Mill: All hourly employees of this unit, including those on August 1, 1967
temporary assignment in other classifications or at other units or
Employers, but excluding employees on temporary assignment from another
unit, Employer or classification.
(r) Ogden Mill: All nonexempt salaried employees of this unit, including those July 1, 1986 to
on temporary assignment in other classifications or at other units or December 31, 1996
Employers, but excluding employees on temporary assignment from another
unit, Employer or classification.
(s) Paris Plant: All nonexempt salaried employees of this unit, including those April 1, 1984
on temporary assignment in other classifications or at other units or
Employers, but excluding employees on temporary assignment from another
unit, Employer or classification.
Kimberly-Clark International Services Corporation
No Participating Units.
Kimberly-Clark Technical Paper, Inc.
(a) All hourly employees of this unit who are represented by the United January 1, 1998
Paperworkers International Union, Local No. 499 including those on
assignment in other classifications or at other units or Employers, but
excluding employees on temporary assignment from another unit, Employer or
classification.
(b) All full-time over-the-road drivers of this unit, including those on January 1, 1998
assignment in other classifications or at other units or Employers, but
excluding employees on temporary assignment from another unit, Employer or
classification.
Kimberly-Clark Tissue Company
(a) Sani-Fresh: All hourly employees (other than "office hourly employees") of January 1, 1997
this unit located at San Antonio, Texas, including those on temporary
assignment in other classifications or at other units or Employers, but
excluding employees on temporary assignment from another unit, Employer or
classification.
(b) Chester: All hourly employees of this unit who are represented by the United January 1, 1998
Paperworkers International Union, Local No. 448, including those on
temporary assignment in other classifications or at other units or
Employers, but excluding employees on temporary assignment from another
unit, Employer or classification.
</TABLE>
<PAGE> 69
<TABLE>
<CAPTION>
List of Employers and Participating Units Effective Date
- - - ----------------------------------------- --------------
<S> <C>
(c) Everett: All hourly employees of this unit who are represented by the January 1, 1998
Association of Western Pulp and Paper Workers, Local Nos. 183 and 644,
including those on temporary assignment in other classifications or at other
units or Employers, but excluding employees on temporary assignment from
another unit, Employer or classification.
(d) Marinette: All hourly employees of this unit who are represented by the January 1, 1998
United Paperworkers International Union, Local No. 86 including those on
temporary assignment in other classifications or at other units or
Employers, but excluding employees on temporary assignment from another
unit, Employer or classification.
(e) Mobile: All hourly employees of this unit who are represented by the United January 1, 1998
Paperworkers International Union, Local Nos. 423, 1421, 1575 and 1873, or
the International Brotherhood of Electrical Workers, Local 2129, including
those on temporary assignment in other classifications or at other units or
Employers, but excluding employees on temporary assignment from another
unit, Employer or classification.
(f) Winslow: All hourly employees of this unit who are represented by the United January 1, 1998
Paperworkers International Union, Waterville Local Nos. 911 and 431, the
International Brotherhood of Electrical Workers, Local No. 1768, the Office
and Professional Employees International Union, AFL-CIO, Local 260 or the
International Association of Machinists, Local 1828, including those on
temporary assignment in other classifications or at other units or
Employers, but excluding employees on temporary assignment from another
unit, Employer or classification.
Kimberly-Clark Worldwide, Inc.
(a) Fullerton Mill: All hourly employees of this unit who are represented by January 1, 1997
the Association of Western Pulp & Paperworkers, Local No. 672, including
those on temporary assignment in other classifications or at other units or
Employers, but excluding employees on temporary assignment from another
unit, Employer or classification.
(b) Ogden Mill: All nonexempt salaried employees of this unit, including those January 1, 1997
on temporary assignment in other classifications or at other units or
Employers, but excluding employees on temporary assignment from another
unit, Employer or classification.
</TABLE>
<PAGE> 1
EXHIBIT 4.8
KIMBERLY-CLARK CORPORATION RETIREMENT CONTRIBUTION PLAN
<PAGE> 2
KIMBERLY-CLARK CORPORATION
RETIREMENT CONTRIBUTION PLAN
(Amended through December 31, 1997)
<PAGE> 3
KIMBERLY-CLARK CORPORATION RETIREMENT CONTRIBUTION PLAN
TABLE OF CONTENTS
<TABLE>
<S> <C>
Article I Name, Purpose and Effective Date of Plan
Article II Definitions and Construction
2.1 Definitions
2.2 Construction
Article III Participation
3.1 Effective Date of Participation
3.2 Transfer To and From Participating Units
3.3 Nonduplication of Accruals for Participation in Other Plans
Article IV Retirement Contributions
4.1 Retirement Contributions
4.2 Limited Service and Leave of Absence
4.3 Amount of Retirement Contribution
4.4 Contributions by Participants
4.5 Temporary Suspension of Retirement Contributions
4.6 Allocations to Retirement Accounts
4.7 Valuation
4.8 Payment of Contributions to Trustee
4.9 Deductibility Requirement
4.10 Mistaken Contributions
4.11 General Limitation
Article V Limitations on Benefits
5.1 Limitations on Benefits
5.2 Aggregation of Plans
Article VI Trustee, Trust Agreement and Plan Expenses
6.1 Trust Agreement
6.2 Establishment of Investment Funds
6.3 Fund Investments
6.4 Reinvestment of Income
6.5 Plan Expenses
Article VII Investment Directions
7.1 Investment of Contributions
7.2 Investment Election
7.3 Reallocations
7.4 Fund Transfers
7.5 Effective Date of Investment Changes
7.7 Voting of Corporation Stock
7.8 Tender Offers
7.9 Stock Rights, Stock Splits and Stock Dividends
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
Article VIII Vesting
8.1 Five Years of Service
8.2 Other Vesting Events
8.3 Forfeitures and Restorations
8.4 Coosa Benefit
Article IX Distributions and Withdrawals
9.1 Optional Forms of Distribution
9.2 Lump Sum and Partial Distributions
9.3 Distribution by Reason of Death
9.4 Distribution Upon Termination of Employment for Reasons other than Death
9.5 Small Distributions
9.6 Consent Required
9.7 Evidence of Right to Receive Benefit
9.8 Required Distributions
9.9 Direct Rollovers
9.10 Withdrawals
9.11 Unclaimed Benefits
Article X Incentive Investment Plan Committee
10.1 Membership
10.2 Powers
10.3 Procedures
10.4 Rules and Decisions
10.5 Authorization of Payments
10.6 Books and Records
10.7 Perpetuation of the Committee
10.8 Claims Procedure
10.9 Allocation or Reallocation of Fiduciary Responsibilities
10.10 Plan Administrator
10.11 Service of Process
Article XI Amendment and Termination
11.1 Amendment and Termination
Article XII Miscellaneous
12.1 Non-Guarantee of Employment
12.2 Rights to Trust Assets
12.3 Disclaimer of Liability
12.4 Non-Recommendation of Investment
12.5 Indemnification of Committee
12.6 Non-Alienation
12.7 Facility of Payment
12.8 Action by a Committee of the Board
12.9 Qualified Domestic Relations Orders
12.10 Compensation Limit
Article XIII Merger
Article XIV Top-Heavy Requirements
Appendix A List of Employers, Participating Units and Effective Dates of Participation
</TABLE>
<PAGE> 5
ARTICLE I
NAME, PURPOSE AND EFFECTIVE DATE OF PLAN
This Kimberly-Clark Corporation Retirement Contribution Plan (the "Plan") has
been adopted effective January 1, 1997. Its purpose is to supplement in part the
retirement income which eligible Employees may be entitled to receive under the
Federal Social Security Act and to encourage Eligible Employees to arrange for
personal investment programs. The Plan is intended to meet the requirements of
Section 401(a) of the Internal Revenue Code of 1986, as amended, and the
Employee Retirement Income Security Act of 1974, as amended. The Plan is
intended to qualify as a profit-sharing plan.
<PAGE> 6
ARTICLE II
DEFINITIONS AND CONSTRUCTION
2.1 Definitions. When the following words and phrases appear in this Plan, they
shall have the respective meanings set forth below unless the context
clearly indicates otherwise:
(a) Affiliated Employer: An Employer and any corporation which is a member
of a controlled group of corporations (as defined in Code section
414(b)) which includes an Employer; any trade or business (whether or
not incorporated) which is under common control (as defined in Code
section 414(c)) with an Employer; any organization (whether or not
incorporated) which is a member of an affiliated service group (as
defined in Code section 414(m)) which includes an Employer; and any
other entity required to be aggregated with an Employer pursuant to
Code section 414(o).
(b) Base Earnings: A Participant's Earnings up to an amount which does not
exceed two-thirds (2/3) of the Taxable Wage Base for the Plan Year.
(c) Beneficiary: The person or persons last designated on Timely Notice by
a Participant, provided the named person survives the Participant. If
no such person is validly designated or if the designated person
predeceases the Participant, the Beneficiary shall be the
Participant's spouse, if living, and if not, the Participant's estate.
(d) Board: The Board of Directors of the Corporation.
(e) Business Day: Any day on which securities are traded on the New York
Stock Exchange.
(f) Code: The Internal Revenue Code of 1986, as amended from time to time.
(g) Committee: The committee designated to administer and regulate the
Plan as provided in Article X.
(h) Corporation: Kimberly-Clark Corporation (a Delaware corporation).
(i) Corporation Stock: The common stock of the Corporation.
(j) Current Market Value: The fair market value on any day as determined
by the Trustee in accordance with generally accepted valuation
principles applied on a consistent basis.
(k) Day of Service: An Employee shall be credited with a Day of Service
for each calendar day commencing with the date on which the Employee
first performs an Hour of Service until the Employee's Severance from
Service Date. If an Employee quits, is discharged, retires, or dies,
and such Employee does not
<PAGE> 7
incur a One-Year Period of Severance, the Employee shall be credited
with a Day of Service for each calendar day elapsed from the
Employee's Severance from Service Date to the date on which the
Employee again completes an Hour of Service.
(l) Earnings: Remuneration when paid, or would have been paid but for a
Participant's deferral election, to a Participant by an Employer for
personal services rendered to the Employer (before any withholding
required by law or authorized by the person to whom such remuneration
is payable), including overtime, bonuses, incentive compensation,
vacation pay, deducted military pay, state disability payments
received, workers compensation payments received, and to the extent
such deductions decrease the individual's base pay, Before-Tax
deferrals under the Kimberly-Clark Corporation Salaried Employees
Incentive Investment Plan or Kimberly-Clark Corporation Hourly
Employees Incentive Investment Plan, or any other plan maintained by
an Employer and described under Section 401(k) of the Code,
contributions under the Kimberly-Clark Corporation Flexible Benefits
Plan or any other plan maintained by an Employer and described under
Section 125 of the Code, but excluding any severance payments (except
as provided in Section 4.3), payments made under the Kimberly-Clark
Equity Participation Plans, pay in lieu of vacation, deferrals under
the Kimberly-Clark Corporation Deferred Compensation Plan,
compensation paid in a form other than cash (such as goods, services
and, except as otherwise provided herein, contributions to employee
benefit programs), service or suggestion awards, and all other special
or unusual compensation of any kind.
Earnings paid to an Employee for a Plan Year in excess of $150,000 (as
adjusted at the same time and in the same manner as under section
415(d) of the Code for that Plan Year) shall not be taken into
account.
Notwithstanding the above, in the case of an Employee on foreign
assignment, as determined by the Employer pursuant to Committee rule,
Earnings shall be base salary, as determined by the Employer pursuant
to Committee rule, which includes 401(k) deferrals under the
Kimberly-Clark Corporation Salaried Employees Incentive Investment
Plan or any other plan maintained by an Employer and described under
Section 401(k) of the Code, and contributions under the Kimberly-Clark
Corporation Flexible Benefits Plan or any other plan maintained by an
Employer and described under Section 125 of the Code, plus overtime,
bonuses, incentive compensation and vacation pay, but shall exclude
foreign service premiums, cost of living adjustments, housing
payments, tax equalization payments, severance payments (except as
provided in Section 4.3), compensation in a form other than cash (such
as goods, services and, except as otherwise provided herein,
contributions to employee benefit programs), service or suggestion
awards and all other special or unusual compensation of any kind.
(m) Eligible Employee: Any person who is in the employ of an Employer
during such periods as he meets all of the following conditions:
<PAGE> 8
(i) he is an Employee on the regular payroll of an Employer, and
(ii) he is in a Participating Unit.
For purposes of this subsection, "on the regular payroll of an
Employer" shall mean paid through the payroll department of such
Employer, and shall exclude employees classified by an Employer as
intermittent or temporary, and persons classified by an Employer as
independent contractors, regardless of how such Employees may be
classified by any federal, state, or local, domestic or foreign,
governmental agency or instrumentality thereof, or court.
Any leased employee (as defined in Code section 414(n)) shall not be
considered an Eligible Employee under the Plan. In addition, a person
who formerly was an Eligible Employee shall be treated as an Eligible
Employee for all purposes hereunder during such periods as he meets
all of the following conditions:
(i) he is an Employee on the regular payroll of an Employer, and
(ii) he is on temporary assignment to provide services for a
corporation, hereinafter referred to as the "Affiliate," which is
a member of a controlled group of corporations, within the
meaning of Code section 414(b) as modified by Code section
415(h), of which the Corporation is a member, and which is not an
Employer hereunder.
For purposes of the preceding sentence, a person shall be considered
on temporary assignment only if his period of service for an Affiliate
is expected to be of brief duration not to exceed 5 years and if he is
expected to resume services for an Employer upon the expiration of the
temporary assignment with the Affiliate.
(n) Employee: A person employed by an Employer.
(o) Employer: The Corporation and each Subsidiary which the Committee
shall from time to time designate as an Employer for purposes of the
Plan and which shall adopt the Plan and the Trust. A list of Employers
is set forth in Appendix A.
(p) Equity Company: Any corporation, which is not the Corporation or a
Subsidiary, 33-1/3% or more of the voting shares of which are owned
directly or indirectly by the Corporation.
(q) ERISA: The Employee Retirement Income Security Act of 1974, as amended
from time to time.
(r) Excess Earnings: A Participant's Earnings in excess of the
Participant's Base Earnings.
<PAGE> 9
(s) Highly Compensated Eligible Employee: An Eligible Employee who is
described in Code section 414(q) and applicable regulations
thereunder. An Employee who is described in Code section 414(q) and
applicable regulations thereunder generally means an Employee who
performed services for the Employer or an Affiliated Employer during
the "Determination Year" and is in one or more of the following
groups:
(i) Employees who at any time during the "Determination Year" or
"Look-Back Year" were "Five Percent Owners" of the Employer or an
Affiliated Employer. "Five Percent Owner" means any person who
owns (or is considered owning within the meaning of Code Section
318) more than five percent of the outstanding stock of the
Employer or stock possessing more than five percent of the total
combined voting power of all stock of the Employer or, in the
case of an unincorporated business, any person who owns more than
five percent of the capital or profits interest in the Employer.
In determining percentage ownership hereunder, employers that
would otherwise be aggregated under Code sections 414(b), (c),
(m) and (o) shall be treated as separate employers; or
(ii) Employees who received "Compensation" during the "Look-Back Year"
from the Employer or an Affiliated Employer in excess of $80,000,
adjusted for changes in the cost of living as provided in Code
section 415(d) and, if the Employer elects, were in the "Top Paid
Group" of Employees for the Plan Year. "Top Paid Group" means the
top 20 percent of Employees, excluding those Employees described
in Code section 414(q)(8) and applicable regulations, who
performed services during the applicable Year, ranked according
to the amount of "Compensation" received from the Employer during
such Year.
The "Determination Year" shall be the Plan Year for which testing is
being performed, and the "Look-Back Year" shall be the immediately
preceding 12 month period.
An Employer may make a uniform election with respect to all plans of
the Employer to apply a calendar year calculation, as permitted by
regulations under Code section 414(q).
For purposes of this subsection, "Compensation" shall mean
compensation as defined in subsection 5.1(d), including elective
salary reduction contributions made under this Plan or another cash or
deferred arrangement or pursuant to Code section 125.
(t) Hours of Service: Each hour for which an Employee is directly or
indirectly paid, or entitled to payment, by an Employer for the
performance of duties and for reasons other than the performance of
duties during the applicable computation period. An Hour of Service
shall also include each hour for which back pay,
<PAGE> 10
irrespective of mitigation of damages, has been either awarded or
agreed to by an Employer. Hours of Service shall be credited to the
Employee for the computation period or periods in which the duties are
performed or for the period to which the award or agreement pertains,
whichever is applicable. Credit for Hours of Service shall be given
for periods of absence spent in military service to the extent
required by law. Credit for Hours of Service may also be given for
such other periods of absence of whatever kind or nature as shall be
determined under uniform rules of the Committee. Employment with a
company which was not, at the time of such employment, an Employer
shall be considered as the performance of duties for an Employer if
such employment was continuous until such company was acquired by,
merged with, or consolidated with an Employer and such employment
continued with an Employer following such acquisition, merger or
consolidation. Employment with a Subsidiary that is not an Employer or
with an Equity Company shall be considered as performance of duties
for an Employer.
Hours of Service shall be calculated and credited in a manner
consistent with U.S. Department of Labor regulation Section
2530.200b-2(b) and (c), and shall in no event exclude any hours
required to be credited under U.S. Department of Labor regulation
Section 2530.200b-2(a).
For any period or periods for which adequate records are not available
to accurately determine the Employee's Hours of Service, the following
equivalency shall be used:
190 Hours of Service for each month for which such Employee would
otherwise receive credit for at least one Hour of Service.
Solely for purposes of determining whether an Employee has incurred a
One-Year Period of Severance, an Employee who is absent from work:
(i) by reason of the pregnancy of the Employee;
(ii) by reason of the birth of a child of the Employee;
(iii) by reason of a placement of a child with the Employee in
connection with the adoption of such child by the Employee; or
(iv) for purpose of caring for such child for a period beginning
immediately following such birth or placement,
shall be credited with certain Hours of Service which would otherwise
have been credited to the Employee if not for such absence. The Hours
of Service credited hereunder by reason of such absence shall be
credited with respect to the Plan Year in which such absence begins,
if such credit is necessary to prevent the Employee from incurring a
one-year break-in-service in such Plan Year, and otherwise with
respect to the Plan Year immediately following the Plan Year in which
such absence begins. In addition, the Hours of Service credited with
<PAGE> 11
respect to such absence shall not exceed 501, and shall be credited
only to the extent that the Employee substantiates to the satisfaction
of the Committee that the Employee's absence, and the length thereof,
was for the reasons described in paragraphs (i)-(iv) above.
Notwithstanding the foregoing, no Hours of Service shall be credited
pursuant to the three immediately preceding sentences with respect to
any absence which commences before April 1, 1985.
(u) Investment Fund: An unsegregated fund of the Plan including the K-C
Stock Fund and such other funds as the Named Fiduciary may establish.
An Investment Fund, pending investment in accordance with the
Investment Fund purpose, may be invested in short-term securities of
the United States of America or in other investments of a short-term
nature.
(v) K-C Stock Fund: An unsegregated Investment Fund to be invested in
Corporation Stock, which, pending such investment, may be invested in
short-term securities issued or guaranteed by the United States of
America or in other investments of a short-term nature.
(w) KCTC: Kimberly-Clark Tissue Company, a wholly-owned subsidiary of the
Corporation.
(x) Lump Sum Distribution: A single distribution of the entire amount of a
Participant's Retirement Account.
(y) Named Fiduciary: The Retirement Trust Committee (the members of which
are designated by the Chief Executive Officer of the Corporation)
shall be the Named Fiduciary of the Plan as defined in ERISA.
(z) Normal Retirement Age: The later of age 65 or the fifth anniversary of
the date the Employee commenced participation in the Plan.
(aa) One-Year Period of Severance: The applicable computation period of 12
consecutive months following an Employee's Severance from Service Date
during which an Employee fails to accrue a Day of Service. Years of
Service and One-Year Periods of Severance shall be measured on the
same computation period.
An Employee shall not be deemed to have incurred a One-Year Period of
Severance if he completes an Hour of Service within 12 months
following his Severance from Service Date.
(bb) Partial Distribution: A distribution of a portion of a Participant's
Retirement Account.
(cc) Participant: An Eligible Employee who is eligible to receive a
Retirement Contribution pursuant to Article IV. He remains a
Participant until his Retirement Account has been distributed pursuant
to the Plan.
<PAGE> 12
(dd) Participating Unit: A specific classification of Employees of an
Employer designated from time to time by the Committee as
participating in this Plan. The classifications so designated and
effective dates of participation of are shown in Appendix A.
(ee) Plan Year: A twelve calendar month period beginning January 1 and
ending the following December 31.
(ff) Retirement Account: The account under the Plan to be maintained for
each Participant as provided in Section 4.7.
(gg) Retirement Contributions: Employer contributions made pursuant to
Article IV of the Plan.
(hh) Service: Regular employment with the Corporation, a Subsidiary or an
Equity Company, including the limited service of a KCTC Employee
receiving payments under the Scott Paper Company Termination Pay Plan
for Salaried Employees. For all purposes under the Plan, Service shall
include service with KCTC and Scott Paper Company prior to January 1,
1997.
(ii) Severance from Service Date: The earlier of:
(i) the date an Employee quits, is discharged, retires or dies, or
(ii) the first anniversary of the date an Employee is absent from
Service for any reason other than a quit, discharge, retirement,
or death (e.g., disability, leave of absence, or layoff, etc.)
(jj) Subsidiary: Any corporation, 50% or more of the voting shares of which
are owned directly or indirectly by the Corporation, which is
incorporated under the laws of one of the States of the United States.
(kk) Taxable Wage Base: With respect to any Plan Year, the maximum amount
of Compensation which may be considered wages for old-age, survivors
and disability insurance purposes under Section 230 of the Social
Security Act as in effect on the first day of the Plan Year.
(ll) Terminated Participant: A Participant who has terminated his
employment with an Employer prior to January 1, 1998 (i) with the
aggregate value of the Participant's Retirement Account exceeding
$3,500, or (ii) a Participant who has terminated employment with his
Employer on or after January 1, 1998 with the aggregate value of the
Participant's Accounts exceeding $5,000, and who has not elected to
receive a distribution under the Plan.
(mm) Timely Notice: A notice (i) in writing on forms, (ii) by electronic
medium, or (iii) by voice transmission, as prescribed by the Committee
and made at such places and at such times as shall be established by
Committee rules.
<PAGE> 13
(nn) Trust: The Kimberly-Clark Corporation Defined Contribution Plans Trust
pursuant to the trust agreement provided for in Article VI.
(oo) Trustee: The trustee under the Trust.
(pp) Valuation Date: Each Business Day for which the Current Market Value
of a Participant's Retirement Account is determined for purposes of
this Plan.
(qq) Year of Service: An Employee shall accrue a Year of Service for each
365 Days of Service. If the total of an Employee's Service exceeds his
whole Years of Service, then such Employee shall be credited with an
additional fraction of a Year of Service, the numerator of which shall
be the total number of his Days of Service represented by such excess
and the denominator of which shall be 365. If the total of an
Employee's Service is less than one Year of Service, then such
Employee shall be credited with a fraction of a Year of Service, the
numerator of which shall be the total number of his Days of Service
and the denominator of which shall be 365.
2.2 Construction. Where appearing in the Plan, the masculine shall include the
feminine and the plural shall include the singular, unless the context
clearly indicates otherwise. The words "hereof," "herein," "hereunder" and
other similar compounds of the word "here" shall mean and refer to the
entire Plan and not to any particular Section or subsection.
<PAGE> 14
ARTICLE III
PARTICIPATION
3.1 Effective Dates of Participation.
(a) Each Eligible Employee who (i) has at least one Hour of Service on
December 31, 1996 and is an active Eligible Employee on January 1,
1997; and (ii) is a participant who is eligible to be credited with
additional Years of Benefit Service as defined in the Kimberly-Clark
Corporation Salaried Employees' Retirement Plan or Kimberly-Clark
Corporation Hourly Employees' Standard Retirement Plan as of January
1, 1997, shall have the opportunity to make a one-time election on or
before June 30, 1997 to become a Participant in the Plan, and such
Eligible Employee who affirmatively elects shall become a Participant
in the Plan effective as of July 1, 1997.
Notwithstanding the foregoing, an Eligible Employee who is eligible to
elect, and who does not affirmatively elect to become a Participant in
the Plan, or who affirmatively elects not to become a Participant in
the Plan, shall remain a participant in the Kimberly-Clark Corporation
Salaried Employees' Retirement Plan or Kimberly-Clark Corporation
Hourly Employees' Standard Retirement Plan, as applicable, in
accordance with the terms thereof, and no Retirement Contributions
shall be made for such Employee.
(b) An Eligible Employee who is an active Employee of KCTC in a
Participating Unit as of December 31, 1996 and who has an Hour of
Service hereunder on January 1, 1997 and, as of January 1, 1997, is
not receiving termination payments under the Scott Paper Company
Termination Pay Plan for Salaried Employees nor on a transition
assignment and expected to receive termination payments under the
Scott Paper Company Termination Pay Plan for Salaried Employees, shall
become a Participant in the Plan as of January 1, 1997, and such
Eligible Employee's investment elections in effect under the
Kimberly-Clark Tissue Company Investment Plan for Salaried Employees
or Kimberly-Clark Tissue Company Investment Plan for Hourly Employees
(the "KCTC Investment Plans"), as applicable, shall remain in effect
hereunder; provided, however that an Employee of KCTC who is not
actively employed on January 1, 1997 in a Participating Unit shall
become a participant in the Plan upon his return to active employment,
and his investment elections in effect under the applicable KCTC
Investment Plan shall remain in effect hereunder.
(c) An hourly organized Eligible Employee at Mobile who (i) has at least
one Hour of Service on September 1, 1997 and is an active Eligible
Employee on January 1, 1998; and (ii) is a participant, or who will be
a participant upon meeting the one-year eligibility requirement,
eligible to be credited with additional years of Credited Employment
under the Kimberly-Clark Tissue company Pension Plan for Hourly
Employees (Non-Contributory), shall have the opportunity to make a
one-time election on or before December 31, 1997 to become a
Participant in the Plan, and such Eligible Employee who affirmatively
elects shall become a Participant in the Plan effective January 1,
1998.
<PAGE> 15
An hourly organized Eligible Employee at Mobile who (i) is hired after
September 1, 1997 and prior to January 1, 1999; (ii) has at least one
Hour of Service on December 31, 1999 and is an active Eligible
Employee on January 1, 2000; and (ii) is a participant, or who will be
a participant upon meeting the one-year eligibility requirement,
eligible to be credited with additional years of Credited Employment
under the Kimberly-Clark Tissue Company Pension Plan for Hourly
Employees (Non-Contributory), shall have the opportunity to make a
one-time election on or before December 31, 1999 to become a
Participant in the Plan, and such Eligible Employee who affirmatively
elects shall become a Participant in the Plan effective January 1,
2000.
Notwithstanding the foregoing, an Eligible Employee who is eligible to
elect, and who does not affirmatively elect to become a Participant in
the Plan, or who affirmatively elects not to become a Participant in
the Plan, shall remain a participant in the Kimberly-Clark Tissue
Company Pension Plan for Hourly Employees (Non-Contributory) in
accordance with the terms thereof, and no Retirement Contributions
shall be made for such Employee.
(d) Each Eligible Employee who commences employment with a Participating
Unit (other than Mobile hourly organized) on or after January 1, 1997,
or returns to work with a Participating Unit (other than Mobile hourly
organized) on or after January 1, 1997, shall become a Participant in
the Plan on his employment or reemployment date, as applicable.
Each hourly organized Eligible Employee who commences employment at
Mobile on or after January 1, 2000, or returns to work at Mobile on or
after January 1, 2000, shall become a Participant in the Plan on his
employment or reemployment date, as applicable.
(e) Each Eligible Employee who commences employment with a Participating
Unit on or after January 1, 1997, or returns to work with a
Participating Unit on or after January 1, 1997, shall become
Participant in the Plan on his employment or reemployment date, as
applicable.
Notwithstanding the foregoing, an Eligible Employee who (i) had an
Hour of Service with Kimberly-Clark Inc. or Kimberly-Clark Forest
Products, Inc. on or after December 31, 1996 and (ii) commences
employment with a Participating Unit on or after January 1, 1997 and
prior to May 1, 1997, shall not participate in the Plan after May 31,
1997, and shall not have the opportunity to make a one-time election
to become a Participant in the Plan as provided in subsection 3.1(a)
above.
3.2 Transfer To and From Participating Units
(a) An Eligible Employee who transfers out of a Participating Unit shall
cease to be a Participant in the Plan as of the date on which he
transfers out of such Participating Unit.
(b) An Eligible Employee who transfers into a Participating Unit shall
become a Participant in the Plan as of the date on which he transfers
into such Participating Unit.
<PAGE> 16
3.3 Nonduplication of Accruals for Participation in Other Plans
Notwithstanding any other provision of the Plan, no Retirement
Contributions shall be made for an Employee during any period in which such
Employee is eligible to receive years of Benefit Service under the
Kimberly-Clark Corporation Salaried Employees' Retirement Plan or the
Kimberly-Clark Corporation Hourly Employees' Standard Retirement Plan, or
Credited Employment under the Kimberly-Clark Tissue Company Pension Plan
for Salaried Employees or the Kimberly-Clark Tissue Company Pension Plan
for Hourly Employees.
<PAGE> 17
ARTICLE IV
RETIREMENT CONTRIBUTIONS
4.1 Retirement Contributions. Each Eligible Employee who is a Participant under
Article III of the Plan shall be allocated Retirement Contributions as
provided in Section 4.3.
Notwithstanding any provision of the Plan to the contrary, Retirement
Contributions and Service credit with respect to qualified military service
will be provided in accordance with Section 414(u) of the Code.
4.2 Limited Service and Leave of Absence. All Participants who are actively
employed and receiving Earnings, or who are entitled to receive benefits
under the Scott Paper Company Termination Pay Plan for Salaried Employees
commencing after January 1, 1997, are entitled to be allocated Retirement
Contributions. Participants who are not actively employed due to a paid
leave of absence shall be allocated Retirement Contributions made during
such period of absence. Retirement Contributions on behalf of a Participant
shall cease upon commencement of his unpaid leave of absence, and such
Retirement Contributions shall resume upon the termination of such leave.
4.3 Amount of Retirement Contribution. Subject to the limitations set forth in
Article V, for each Plan Year, the Employer shall pay or cause to be paid
to the Trustee, contributions to the Plan that shall be allocated to the
Retirement Account of each Participant eligible for an allocation as
determined below. The Retirement Contribution for any Plan Year shall be
sufficient to credit each such Participant's Retirement Account with an
amount equal to the percentage in Column A of Base Earnings plus the
percentage in Column B of Excess Earnings, based on the Participant's age
as of the last day of the Plan Year:
<TABLE>
<CAPTION>
COLUMN A COLUMN B
Contribution Percentage Contribution Percentage
Age Range of Base Earnings of Excess Earnings
--------- ---------------- ------------------
<S> <C> <C>
Under 25 3.50% 5.75%
25-29 3.75% 6.00%
30-34 4.00% 6.25%
35-39 4.25% 6.50%
40-44 4.50% 6.75%
45-49 5.25% 7.50%
50-54 6.00% 8.25%
55 and over 6.50% 8.75%
</TABLE>
Notwithstanding the foregoing, for each Plan Year, the Employer shall pay
or cause to be paid to the Trustee, contributions to the Plan that shall be
allocated to the Retirement Account of each hourly organized Participant at
the Mobile facilities eligible for an allocation as determined below.
<PAGE> 18
<TABLE>
<CAPTION>
Age Range Contribution Percentage of Eligible Earnings
--------- --------------------------------------------
<S> <C>
Under 25 2.05%
25-29 2.20%
30-34 2.35%
35-39 2.45%
40-44 2.60%
45-49 3.05%
50-54 3.50%
55 and over 3.80%
</TABLE>
4.4 Contributions by Participants. Participants shall not make contributions
under this Plan. The amount of any Participant contribution under this Plan
which is determined to have been erroneously made, as adjusted for income,
gain and loss of the Trust for the time such contribution was retained
under the Plan, shall be repaid as soon as practicable after such
determination to such Participant if living; otherwise, as may be required
by law.
4.5 Temporary Suspension of Retirement Contributions. The Board may order the
suspension of all Retirement Contributions if, in its opinion, the
Corporation's consolidated net income after taxes for the last fiscal year
is substantially below the Corporation's consolidated net income after
taxes for the immediately preceding fiscal year. Any such determination by
the Board shall be communicated to all Eligible Employees and to all
Participants reasonably in advance of the first date for which such
temporary suspension is ordered.
4.6 Allocations to Retirement Accounts. Retirement Contributions made pursuant
to Section 4.3 shall be allocated to the Retirement Account of each
Participant as soon as administratively possible following payment to the
Trust.
4.7 Valuation. Each Investment Fund and each Retirement Account shall be valued
by the Trustee on each Valuation Date:
(a) by determining the Current Market Value, as of the Valuation Date, of
all securities and property which are then held in the Trust,
(b) by adding thereto the amount of any uninvested cash and accrued
income, or subtracting any losses incurred as of the Valuation Date,
and
(c) by subtracting any fees and expenses described in Article VI.
All amounts to be distributed pursuant to the provisions of Article IX
hereof as of the relevant Valuation Date shall be taken into account in
valuing the Investment Funds and each Retirement Account pursuant to the
provisions of this Section 4.7.
4.8 Payment of Contributions to Trustee. Amounts representing Retirement
Contributions shall, not less frequently than monthly, be paid into the
Trust.
<PAGE> 19
4.9 Deductibility Requirement. All Retirement Contributions under the Plan are
conditioned upon the deductibility of such Retirement Contributions under
Section 404 of the Code and to the extent the deduction is disallowed,
shall be returned to the Employer within one year after the disallowance of
the deduction. Earnings attributable to such Retirement Contributions shall
not be returned to the Employer but losses attributable thereto shall
reduce the amount to be so returned. For purposes of this Section 4.10,
Retirement Contributions which are not deductible in the current taxable
year of the Employer but which may be deducted in taxable years subsequent
to the year in respect of which it is made, shall not be considered to be
disallowed.
4.10 Mistaken Contributions. If Retirement Contributions are made by reason of a
mistake of fact, such Retirement Contributions shall be returned to the
Employer within one year after such Retirement Contributions are made. The
amount which may be returned to the Employer shall not exceed the excess of
(i) the amount contributed, over (ii) the amount that would have been
contributed had there not occurred a mistake of fact or a mistake in
determining the deduction. Earnings attributable to the excess Retirement
Contributions shall not be returned to the Employer but losses attributable
thereto shall reduce the amount to be so returned.
4.11 General Limitation. Notwithstanding any other provision of this Article IV,
no Retirement Contribution shall be made to the Plan which would cause the
Plan to fail to meet the requirements for exemption from tax or to violate
any provisions of the Code.
<PAGE> 20
ARTICLE V
LIMITATIONS ON BENEFITS
5.1 Limitations on Benefits. Anything to the contrary herein notwithstanding,
no Retirement Contribution hereunder shall be made which will violate the
limitations set forth below:
(a) The Annual Addition to a Participant's Retirement Account (as such
term is defined below) in any Plan Year either solely under the Plan
or under an aggregation of the Plan with all other qualified defined
contribution plans of the Employer may not exceed the lesser of (i)
$30,000, (or such other amount as may be prescribed under regulations
issued by the Secretary of the Treasury under Section 415(d) of the
Code), or (ii) twenty-five percent (25%) of the Employee's total
Compensation for the Plan Year.
(b) If a Participant also participates under any other qualified defined
contribution plan or any qualified defined benefit plan maintained by
the Employer or an Affiliated Employer, all such defined contribution
plans shall be considered as one defined contribution plan, and all
such defined benefit plans shall be considered as one defined benefit
plan. In such event, the sum of the defined contribution plan fraction
and the defined benefit plan fraction for any Plan Year shall not
exceed 1.0. In determining the allowable limitation referred to in the
preceding sentence:
(i) The defined benefit plan fraction shall be determined by dividing
the projected annual benefit of the Participant under the defined
benefit plan by the lesser of:
a) the product of 1.25 and $90,000 (subject to all adjustments
as are permitted by, or required under, Section 415 of the
Code), or
b) the product of 1.4 and 100% of the Participant's average
annual total Compensation for his highest three consecutive
years; and
(ii) The defined contribution plan fraction shall be determined by
dividing the sum of all Annual Additions (as such term is defined
below) for all years in which he or she was a participant in any
such defined contribution plans by the sum of the lesser of (i)
or (ii) below for each year during which the Participant was an
employee of the Employer:
a) the product of 1.25 and the dollar limitation in effect
under Section 415(c)(1)(A) of the Code for such year,
or
b) the product of 1.4 and 25% of the Participant's total
Compensation for such year.
In the event that the sum of the defined contribution plan
fraction and the defined benefit plan fraction would exceed the
allowable limitation for any
<PAGE> 21
Plan Year, the Participant's anticipated benefit under the
defined benefit plan shall be reduced accordingly.
Effective January 1, 2000, this Subsection 5.1(b) shall no longer
apply under the Plan.
(c) For purposes of this Section 5.1, the term "Annual Addition" as
applied to each Participant shall mean the sum of the following
amounts allocated to the Participant's Retirement Account under the
Plan or any other qualified defined contribution plan or qualified
defined benefit plan of the Employer or any Affiliated Employer: (1)
matching employer contributions, Retirement Contributions and pre-tax
contributions (excluding any previously distributed pre-tax
contributions) and any other employer contributions; (2) forfeitures;
and (3) and any other employee contributions. Amounts described in
Section 415(l) and 419A(d)(2) of the Code contributed for any Plan
Year for the benefit of the Participant shall be treated as an Annual
Addition to the extent provided in such Sections. If a Participant's
Retirement Contributions under this Plan are to be reduced as a result
of this Section 5.1, such reduction shall be effected by first
reducing the Participant's Retirement Contributions under this Plan,
and second, to the extent necessary, by reducing any contributions
under any other qualified defined contribution plan of the Employer or
any Affiliated Employer.
(d) For purposes of this Section, "Compensation":
(i) includes amounts actually paid or made available to a Participant
(regardless of whether he was such during the entire Plan Year);
(A) as wages, salaries, fees for professional service, and other
amounts received for personal services actually rendered in
the course of employment with the Employer or Affiliated
Employer including but not limited to commissions,
compensation for services on the basis of a percentage of
profits and bonuses;
(B) for purposes of (c) above, earned income from sources
outside the United States (as defined in Code section
911(b)); whether or not excludable from gross income under
Code section 911 or deductible under Code section 913;
(C) amounts described in Code sections 104(a)(3), 105(a) and
105(h) but only to the extent that these amounts are
includable in the gross income of the Participant;
(D) amounts paid or reimbursed by the Employer or Affiliated
Employer for moving expenses incurred by the Participant,
but only to the extent that these amounts are not deductible
by the Participant under Code section 217;
<PAGE> 22
(E) value of a nonqualified stock option granted to the
Participant, but only to the extent that the value of the
option is includable in the gross income of the Participant
in the taxable year in which granted;
(F) the amount includable in the gross income of a Participant
upon making the election described in Code section 83(b).
(ii) excludes -
(A) amounts contributed by an Employer or Affiliated Employer on
behalf of Participants under a cash or deferred arrangement
and any amount which is contributed or deferred by the
Employer or Affiliated Employer at the election of the
Employee under Section 125 of the Code; provided, however
that for Plan Years beginning after December 31, 1997, such
amounts shall be included as "Compensation" with respect to
such Plan Year.
(B) contributions made by the Employer or Affiliated Employer to
a plan of deferred compensation to the extent that, before
the application of the Code section 415 limitations to that
plan, the contributions are not includable in the gross
income of the Participant for the taxable year in which
contributed and any distributions from a plan of deferred
compensation, regardless of whether such amounts are
includable in the gross income of the Participant when
distributed; provided however, any amounts received by a
Participant pursuant to an unfunded nonqualified plan shall
be considered as Compensation in the year such amounts are
includable in the gross income of the Participant;
(C) amounts realized from the exercise of a nonqualified stock
option, or recognized when restricted stock (or property)
held by a Participant either becomes freely transferable or
is no longer subject to a substantial risk of forfeiture
pursuant to Code section 83 and the regulations thereunder;
(D) amounts realized from the sale, exchange or other
disposition of stock acquired under a qualified stock
option;
(E) other amounts which receive special tax benefits such as
premiums for group term life insurance (but only to the
extent that the premiums are not includable in the gross
income of the Participant); and
(F) Compensation in excess of the limit set forth in Section
12.10.
<PAGE> 23
In lieu of the above definition of "Compensation," the following
alternative definitions of "Compensation" in (i) or (ii) below may be
applied with respect to a Plan Year as determined by the Committee in
its discretion:
(i) Wages within the meaning of Section 3401(a) of the Code and all
other payments of compensation to an Employee by his Employer (in
the course of the Employer's trade or business) for which the
Employer is required to furnish the Employee a written statement
under Section 6041(d), 6051(a)(3), and 6052 of the Code, but
excluding amounts paid or reimbursed by the Employer for moving
expenses incurred by an Employee, but only to the extent that at
the time of the payment it is reasonable to believe that these
amounts are deductible by the Employee under Section 217 of the
Code, and determined without regard to any rules under Section
3401(a) of the Code that limit the remuneration included in wages
based on the nature or location of the employment or the services
performed.
(ii) Wages within the meaning of Section 3401(a) of the Code (for
purposes of income tax withholding at the source) of the
Participant but determined without regard to any rules that limit
the remuneration included in wages based on the nature or
location of the employment or the services performed.
For Plan Years beginning after December 31, 1997, "Compensation"
hereunder includes amounts contributed or deferred by the Employer on
behalf of the Employee under Sections 125 or 401(k) of the Code.
5.2 Aggregation of Plans. For purposes of Section 5.2, this Plan shall be
aggregated and treated as a single plan with other plans maintained by the
Employer or any Affiliated Employer to the extent that this Plan is
aggregated with any other plan for purposes of satisfying Section 410(b) of
the Code (other than Section 410(b)(2)(A)(ii) of the Code).
<PAGE> 24
ARTICLE VI
TRUSTEE, TRUST AGREEMENT AND PLAN EXPENSES
6.1 Trust Agreement.
(a) The Corporation shall enter into a trust agreement with a person or
corporation selected by the Chief Executive Officer of the Corporation
to act as Trustee of Retirement Contributions. The Trustee shall
receive all Retirement Contributions and shall hold, manage,
administer, and invest the same, reinvest any income, and, in
accordance with instructions and directions of the Committee subject
to the Plan, make distributions.
(b) The trust agreement shall be in such form and contain such provisions
as the Chief Executive Officer of the Corporation may deem necessary
and appropriate to effectuate the purposes of the Plan and to qualify
the Plan and the Trust under the Code. Upon the written request of an
Eligible Employee, a copy of the trust agreement shall be made
available for his inspection.
(c) The Chief Executive Officer of the Corporation may, from time to time,
remove the Trustee or any successor Trustee at any time and any such
Trustee or any successor Trustee may resign. The Chief Executive
Officer of the Corporation shall, upon removal or resignation of a
Trustee, appoint a successor Trustee.
(d) The Trustee's accounts, books, and records relating to the Trust may
be audited annually by auditors selected by the Chief Executive
Officer of the Corporation.
(e) Brokerage fees, asset management fees, investment management fees and
other direct costs of investment and taxes (including interest and
penalties) shall be paid by the Trustee out of the funds of the Trust
to which such costs are attributable, unless paid by the Corporation
in its discretion.
6.2 Establishment of Investment Funds. The Trust shall consist of the K-C Stock
Fund and such other Funds as have been established by the Named Fiduciary.
The Named Fiduciary may, from time to time, in its discretion, establish
additional funds or terminate any Fund. The Funds may include, but shall
not be limited to, funds managed by the Trustee, by an insurance company,
or by an investment company regulated under the Investment Company Act of
1940.
6.3 Fund Investments. Any of the Funds referred to in Section 6.2 above may, in
whole or in part, be invested in any common, collective, or commingled
trust fund maintained by the Trustee or another financial institution,
which is invested principally in property of the kind specified for that
particular investment Fund or for the temporary investment of assets, and
which is maintained for the investment of the assets of plans and trusts
which are qualified under the provisions of Section 401(a) of the Code and
exempt from Federal taxation under the provisions of Section 501(a) of the
Code, and during such period of time as an
<PAGE> 25
investment through any such medium exists the declaration of trust of such
trust shall constitute a part of the applicable Trust Agreement.
6.4 Reinvestment of Income. All interest, dividends, and other income, as well
as cash received from the sale or exchange of securities or other property,
produced by each of the Funds or any losses incurred by each of the Funds,
shall be reinvested in or deducted from the same Fund which produced such
proceeds, interest, dividends other income or losses.
6.5 Plan Expenses. The expenses of administering the Plan, including Trustee's
fees, shall be paid from the Trust and allocated among the Retirement
Accounts of the Participants and Terminated Participants except to the
extent that the Corporation, in its sole discretion, has determined that
the Employer shall pay any such expenses. The transfer taxes, brokerage
fees and other expenses in connection with the purchase, sale or
distribution of Corporation Stock shall be paid by the Trust, and shall be
deemed part of the cost of such Corporation Stock, or deducted in computing
the sale proceeds therefrom, as the case may be except to the extent that
the Corporation, in its sole discretion, determines that such taxes, fees
or expenses (other than transfer taxes on distribution) shall be paid by
the Employer.
<PAGE> 26
ARTICLE VII
INVESTMENT DIRECTIONS
7.1 Investment of Contributions. Each Eligible Employee upon becoming a
Participant shall, upon Timely Notice, direct that his Retirement
Contributions be paid into and invested in any one or more of the
Investment Funds in such percentages as the Participant may direct;
provided, however, that such percentage investment in any Investment Fund
shall be in multiples of one percent (1%) of his Retirement Contributions.
In the event the Participant does not elect the manner in which his
Retirement Contributions are to be invested, the Trustee shall invest such
contributions in the Money Market Fund (as defined in the Kimberly-Clark
Corporation Salaried Employees Incentive Investment Plan) until such time
as the Participant elects the manner in which his Retirement Contributions
are to be invested.
7.2 Investment Election. The percentage investment of a Participant's future
Retirement Contributions to be paid into and invested in any one or more of
the Investment Funds may be changed upon Timely Notice; provided, however,
that such percentage investment in any Investment Fund shall be in
multiples of one percent (1%) of the Retirement Contributions.
7.3 Reallocations. A Participant may, by making a request in the manner, and
subject to any restrictions, prescribed by the Committee, direct that any
portion, in multiples of one percent (1%), of his interest in any one or
more of the Investment Funds be reallocated to any one or more of the other
Investment Funds.
7.4 Fund Transfers: A Participant may, by making a request in the manner, and
subject to any restrictions, prescribed by the Committee, direct that any
portion, either in multiples of one percent (1%) or in a dollar amount, of
his interest in any one or more of the Investment Funds be transferred to
any one or more of the other Investment Funds.
7.5 Effective Date of Investment Changes. Any request made pursuant to the
provisions of Sections 7.1 through 7.4 above may be made upon Timely Notice
and, subject to any restrictions prescribed by the Committee, shall take
effect as soon as practicable after such request is received.
7.6 Valuation. Any reallocation or transfer made pursuant to the provisions of
Section 7.3 or 7.4 shall be based upon the value of the Participant's
interest in any Investment Fund on the Valuation Date on which such
transaction takes effect, subject to any restrictions prescribed by the
Committee.
7.7 Voting of Corporation Stock. A Participant (or in the event of his death,
his Beneficiary) may direct the voting at each annual meeting and at each
special meeting of the stockholders of the Corporation of that number of
whole shares attributable to the balances in his K-C Stock Fund Account as
of the Valuation Date coincident with the record date for such meeting.
Each such Participant (or Beneficiary) will be provided with copies of
pertinent proxy solicitation material together with a request for his
<PAGE> 27
confidential instructions as to how such shares are to be voted. The
Committee shall direct the Trustee to vote such shares in accordance with
such instructions and shall also direct the Trustee how to vote any shares
of Corporation Stock at any meeting for which it has not received, or is
not subject to receiving, such voting instructions. Notwithstanding the
foregoing, a Participant's (or Beneficiary's) voting instructions shall
apply to the balances in his K-C Stock Fund Accounts for all plans
maintained by an Employer in which he participates.
7.8 Tender Offers. A Participant (or in the event of his death, his
Beneficiary) may direct the Trustee in writing how to respond to a tender
or exchange offer for any or all whole shares of Corporation Stock held by
the Trustee and attributable to the balances in the K-C Stock Fund Account
as of the Valuation Date coincident with such offer. The Committee shall
notify each Participant (or Beneficiary) and exert its best efforts to
timely distribute or cause to be distributed to him such information as
will be distributed to stockholders of the Corporation in connection with
any such tender or exchange offer. Upon receipt of such instructions, the
Trustee shall tender such shares of Corporation Stock as and to the extent
so instructed. If the Trustee shall not receive instructions from a
Participant (or Beneficiary) regarding any such tender or exchange offer
for such shares of Corporation Stock (or shall receive instructions not to
tender or exchange such shares), the Trustee shall have no discretion in
such matter and shall take no action with respect thereto. With respect to
shares of Corporation Stock in the K-C Stock Fund for which the Trustee is
not subject to receiving such instructions, however, the Trustee shall
tender such shares in the same ratio as the number of shares for which it
receives instructions to tender bears to the total number of shares for
which it is subject to receiving instructions, and shall have no discretion
in such matter and shall take no action with respect thereto other than as
specifically provided in this sentence. Notwithstanding the foregoing, a
Participant's (or Beneficiary's) voting instructions shall apply to the
balances in his K-C Stock Fund Accounts for all plans maintained by an
Employer in which he participates.
7.9 Stock Rights, Stock Splits and Stock Dividends. A Participant shall have no
right of request, direction or demand upon the Committee or the Trustee to
exercise in his behalf rights to purchase shares of Corporation Stock or
other securities of the Corporation. The Trustee, at the direction of the
Committee, shall exercise or sell any rights to purchase shares of
Corporation Stock appertaining to shares of such stock held by the Trustee
and shall sell at the direction of the Committee any rights to purchase
other securities of the Corporation appertaining to shares of Corporation
Stock held by the Trustee. The Retirement Accounts of Participants shall be
appropriately credited. Shares of Corporation Stock received by the Trustee
by reason of a stock split or stock dividend shall be appropriately
allocated to the Retirement Accounts of Participants.
<PAGE> 28
ARTICLE VIII
VESTING
8.1 Five Years of Service. A Participant's interest in his Retirement Account
shall be fully vested upon the Participant's completion of five Years of
Service; provided, however, that a Participant who was employed by Scott
Paper Company on December 12, 1995 shall be fully vested in his Retirement
Account.
8.2 Other Vesting Events. Notwithstanding the above, each Participant's
interest in his Retirement Contributions (and any earnings thereon) made on
his behalf shall be vested in such Participant in whole, upon
(a) his attainment of Normal Retirement Age or upon termination of
employment due to his death; or
(b) the termination or partial termination of the Plan, or the complete
discontinuance of all Retirement Contributions under the Plan
(provided, however, that such discontinuance or partial termination
relates to such Participant).
8.3 Forfeitures and Restorations. If a Participant incurs a Severance from
Service Date other than by reason of an event described in Section 8.2
above, his interest in unvested Retirement Contributions and any earnings
thereon shall be forfeited for the Plan Years in which (a) the Participant
incurs five consecutive One-Year Periods of Severance or (b) if earlier,
the Participant receives a distribution of his entire vested interest in
his Retirement Account. A Participant who is not vested on his Severance
from Service Date shall be deemed to receive a distribution of zero dollars
($0) on such date. If a Participant who incurs a forfeiture on account of
his incurring a Severance from Service Date is re-employed by the Employer
prior to incurring five consecutive One-Year Periods of Severance, he or
she shall have restored to his Retirement Account the amount forfeited in
accordance with the above. Such restored amount shall be invested according
to the Participant's elections then in effect under Section 7.2. The
Committee shall maintain, or cause to be maintained, a record of the
amounts required to be restored hereunder, and the Employer shall pay such
amounts within thirty (30) days of such notice either from current
forfeitures or from an additional contribution by the Employer. Any
forfeiture not restored to a Participant's Retirement Account shall be
applied to reduce future Retirement Contributions under the Plan.
8.4 Coosa Benefit. Notwithstanding any other provision of the Plan, if a
Participant's employment with an Employer is terminated, he shall be fully
vested in his Retirement Account and shall be entitled to receive a
distribution of the entire amount then in his Retirement Account in
accordance with Article IX if such Participant meets all of the following
conditions:
(a) immediately prior to his termination of employment he must have been
(i) an Employee of Coosa Pines Golf Club Inc., or (ii) an Employee of
an Employer located at Coosa Pines, Alabama; and
<PAGE> 29
(b) such termination of employment must be involuntary on the part of the
Participant and be caused solely by the elimination of his job
function from his Employer due to the sale of the assets of the Coosa
pulp and newsprint mill facility and woodlands under the Assets
Purchase Agreement entered into between the Corporation and Alliance
Forest Products, Inc. dated as of February 14, 1997, and such
termination of employment must occur on or within 30 days after the
Closing Date of such Assets Purchase Agreement.
<PAGE> 30
ARTICLE IX
DISTRIBUTIONS AND WITHDRAWALS
9.1 Optional Forms of Distribution. A Terminated Participant may, upon Timely
Notice elect any one of the following optional forms of distribution:
(a) All Cash Distribution. An "All Cash Distribution" of a Participant's
Retirement Account means a single distribution consisting of the cash
equivalent of the Current Market Value on the Valuation Date of the
Participant's vested percentage of his Retirement Account.
(b) Stock and Cash Distribution. A "Stock and Cash Distribution" of a
Participant's Retirement Account means one distribution consisting of:
(i) the cash equivalent of the Current Market Value of the
Participant's vested percentage of his Retirement Account, except
his interest in the K-C Stock Fund, and
(ii) full shares of Corporation Stock attributable to the
Participant's vested percentage interest in the K-C Stock Fund,
together with the cash equivalent of the Current Market Value of
fractional shares of such Corporation Stock.
(c) Installment Distribution. An "Installment Distribution" shall mean the
cash equivalent of the Current Market Value of the Participant's
vested percentage of his Retirement Account paid monthly in cash for a
specified number of years elected by the Participant, not to exceed
the lesser of the Participant's life expectancy or 20; provided,
however, that an Installment Distribution is available only to
Terminated Participants upon attainment of age 55. The value of each
payment shall be determined on a declining balance method.
Prior to the distribution of the final payment of an Installment
Distribution, a Participant may elect:
(i) to receive the remaining balance in his Retirement Account as a
Lump Sum Distribution;
(ii) to change the elected period of the Installment Distribution; or
(iii) to receive a Partial Distribution from the remaining balance in
his Retirement Account.
9.2 Lump Sum and Partial Distributions. A Lump Sum Distribution or a Partial
Distribution may be elected by any Participant in the form of an All Cash
Distribution or a Stock and Cash Distribution.
<PAGE> 31
9.3 Distribution by Reason of Death.
(a) A Participant may designate a Beneficiary or Beneficiaries to receive
the amount in the Participant's Retirement Account in case of his
death, or to receive any balance due to the Participant at the time of
his death under Section 9.1(c) above. If a Participant's participation
terminates by reason of his death, his Beneficiary shall be entitled
to receive distribution in full of the total amount in his Retirement
Account. Such distribution shall be in the form of a lump sum payment
in cash of the total amount in the Participant's Retirement Account,
or at the election of the Beneficiary and in the manner prescribed by
the Committee, such distribution may be made in one of the forms
specified in Section 9.1 above.
(b) In case of the Participant's death, the amount in the Participant's
Retirement Account shall be distributed in accordance with the Plan to
the designated Beneficiary or Beneficiaries. If a married Participant
designates a Beneficiary or Beneficiaries other than his surviving
spouse at the time of such designation, such designation shall not be
effective (and the Participant's spouse shall be the Beneficiary)
unless:
(i) the spouse consents in writing to such designation;
(ii) the spouse's consent acknowledges the effect of such
designation, which consent shall be irrevocable; and
(iii) the spouse executes the consent in the presence of either a Plan
representative designated by the Committee or a notary public.
(c) Notwithstanding the foregoing, such consent shall not be required if
the Participant establishes to the satisfaction of the Committee that
such consent cannot be obtained because (i) there is no spouse; (ii)
the spouse cannot be located after reasonable efforts have been made;
or (iii) other circumstances exist to excuse spousal consent under
applicable regulations. Each Beneficiary designation made by a
Participant shall at all times satisfy the requirements of this
Section 9.2; if at any time such designation shall fail to satisfy the
requirements of this Section 9.2, such designation shall thereupon be
deemed null and void. A Participant may designate a different
Beneficiary provided he or she complies with the spousal consent
requirements described above. If the Participant fails to designate a
Beneficiary in accordance with the provisions of this Section 9.2, or
if the designated Beneficiary predeceases the Participant, the total
amount in his Retirement Account shall be distributed to the
Participant's estate in the form of an All Cash Distribution as soon
as practicable after the Participant's death.
9.4 Distribution Upon Termination of Employment for Reasons Other than Death. A
Participant who is entitled to receive a distribution of his Retirement
Account due to the termination of his employment for any reason except
death, may on Timely Notice elect to receive such distribution in the form
of an All Cash Distribution, a Stock and Cash
<PAGE> 32
Distribution or, if eligible under Section 9.1(c), an Installment
Distribution, at any time; provided, however, that the distribution
provisions of this Article IX shall not apply for a Participant or
Terminated Participant whose qualified domestic relations order is pending
approval by the Plan Administrator.
9.5 Small Distributions. Anything to the contrary herein notwithstanding, if a
Participant's Retirement Account does not exceed $5,000 as provided under
Code section 411(a)(11) and has never exceeded the amount provided under
Code section 411(a)(11) at the time of any prior distribution (or such
amount as the Secretary of Treasury shall specify) the Committee shall
direct the distribution of the Participant's Retirement Account as an All
Cash Distribution or Stock and Cash Distribution, as elected by the
Participant or his Beneficiary, following the Participant's Severance from
Service Date; provided, however, that if no election is made within three
months after the Participant's Severance from Service Date, such
distribution shall be in the form of an All Cash Distribution.
9.6 Consent Required. In the case of a Terminated Participant whose vested
Retirement Account balance exceeds three thousand five hundred dollars
($3,500), no distribution shall be made (or commence) without the consent
of the Terminated Participant. If the Terminated Participant does not so
consent, then distribution will be deferred until the earlier of when a
Terminated Participant consents to such distribution, or until the
Participant attains age 65.
9.7 Evidence of Right to Receive Benefit: The Plan Administrator may require
proper proof of death, paternity, maternity, and such evidence of the right
of any person to receive a distribution payable as a result of the death of
a Participant as the Plan Administrator may deem desirable. The Plan
Administrator's determination of death, paternity, maternity and the right
of any person to receive payment shall be conclusive.
9.8 Required Distributions. Notwithstanding any provision of the Plan to the
contrary, distribution of a Participant's or Terminated Participant's
Accounts shall commence no later than the earlier of:
(a) April 1 of the calendar year following the later of
(i) the calendar year in which the Terminated Participant attains age
70 1/2, or
(ii) the calendar year in which the Participant retires, as defined
under Section 401(a)(9) of the Code, or terminates employment, or
with respect to a Participant or Terminated Participant who is a five
percent owner as defined in Code Section 401(a)(9), April 1 of the
calendar year following the calendar year in which the Participant or
Terminated Participant attains age 70 1/2
(b) unless the Participant elects a later date (which can be no later than
the date specified in (a) above), the 60th day after the latest of:
<PAGE> 33
(i) the close of the Plan Year in which the Participant attains age
65,
(ii) the close of the Plan Year which includes the date 10 years
after the date the Participant first commenced participating in
the Plan, or
(iii) the close of the Plan Year in which the Participant terminated
employment with his Employer.
(c) All distributions from the Plan shall be made in accordance with the
requirements of Code section 401(a)(9) and the regulations thereunder,
including the minimum distribution incidental benefit requirements;
provided, however that the Committee may, in its discretion, designate
any distribution date which complies with the preceding provisions.
9.9 Direct Rollovers. In the event any payment or payments to be made to a
Terminated Participant, a Beneficiary who is the surviving spouse of a
Participant or Terminated Participant, or an Alternate Payee who is the
former spouse of a Participant or Terminated Participant under the Plan
would constitute an "eligible rollover distribution," such distributee may
request that such payment or payments be transferred directly from the
Trust to the trustee of (a) an individual retirement account described in
Section 408(a) of the Code, (b) an individual retirement annuity described
in Section 408(b) of the Code (other than an endowment contract), (c) an
annuity plan described in Section 403(a) of the Code, or (d) a qualified
retirement plan the terms of which permit the acceptance of rollover
distributions; provided, however, that clause (c) and (d) shall not apply
to an eligible rollover distribution made to a Beneficiary who is not the
surviving spouse of a Participant or Terminated Participant. Any such
request shall be made in writing, on the form prescribed by the Committee
for such purpose, at such time in advance as the Committee may specify.
For purposes of this Section 9.7, an eligible rollover distribution shall
mean a distribution from the Plan, excluding (a) any distribution that is
one of a series of substantially equal periodic payments (not less
frequently than annually) over the life (or life expectancy) of the
individual, the lives (or life expectancies) of the individual and the
individual's designated Beneficiary, or a specified period of ten (10) or
more years, (b) any distribution to the extent such distribution is
required under Section 401(a)(9) of the Code, and (c) any distribution to
the extent such distribution is not included in gross income (determined
without regard to the exclusion for net unrealized appreciation of
Corporation Stock).
9.10 Withdrawals. No withdrawals may be made from a Participant's Retirement
Account. Notwithstanding the foregoing, a Terminated Participant may, by
making a request in the manner prescribed by the Committee, withdraw all or
any portion of the total value of the vested portion of his Retirement
Account.
9.11 Unclaimed Benefits. During the time when a benefit hereunder is payable to
any Terminated Participant or, if deceased, his Beneficiary, the Committee
may mail by registered or certified mail to such Participant or
Beneficiary, at his last known address,
<PAGE> 34
a written demand for his then address, or for satisfactory evidence of his
continued life, or both. If such information is not furnished to the
Committee within 12 months from the mailing of such demand, then the
Committee may, under rules established by the Committee, in its sole
discretion, declare such benefit, or any unpaid portion thereof, suspended,
with the result that such unclaimed benefit shall be treated as a
forfeiture for the Plan Year within which such 12-month period ends, but
shall be subject to restoration through and Employer contribution if the
lost Participant or such Beneficiary later files a claim for such benefits.
<PAGE> 35
ARTICLE X
INCENTIVE INVESTMENT PLAN COMMITTEE
12.1 Membership. The Committee shall mean the Salaried Employees Incentive
Investment Plan Committee, the members of which shall serve at the pleasure
of the Chief Executive Officer of the Corporation. The Committee shall not
receive compensation for its services. Committee expenses shall be paid by
the Corporation.
12.2 Powers. The Committee shall have all such powers as may be necessary to
discharge its duties hereunder, including, but not by way of limitation,
the power to construe or interpret the Plan, to determine all questions of
eligibility hereunder, to determine the method of payment of any Accounts
hereunder, to adopt rules relating to the giving of Timely Notice, and to
perform such other duties as may from time to time be delegated to it by
the Chief Executive Officer of the Corporation. The Committee may prescribe
such forms and systems and adopt such rules and actuarial methods and
tables as it deems advisable. It may employ such agents, attorneys,
accountants, actuaries, medical advisors, or clerical assistants (none of
whom need be members of the Committee) as it deems necessary for the
effective exercise of its duties, and may delegate to such agents any power
and duties, as it may deem necessary and appropriate.
12.3 Procedures. A majority of the Committee members shall constitute a quorum.
The Committee may take any action upon a majority vote at any meeting at
which a quorum is present, and may take any action without a meeting upon
the unanimous written consent of all members. All action by the Committee
shall be evidenced by a certificate signed by the chairman or by the
secretary to the Committee. The Committee shall appoint a secretary to the
Committee who need not be a member of the Committee, and all acts and
determinations of the Committee shall be recorded by the secretary, or
under his supervision. All such records, together with such other documents
as may be necessary for the administration of the Plan, shall be preserved
in the custody of the secretary.
12.4 Rules and Decisions. All rules and decisions of the Committee shall be
uniformly and consistently applied to all Eligible Employees and
Participants under this Plan in similar circumstances and shall be
conclusive and binding upon all persons affected by them. The Committee
shall have absolute discretion in carrying out its duties under the Plan.
12.5 Authorization of Payments. Subject to the provisions hereof, it shall be
the duty of the Committee to furnish the Trustee with all facts and
directions necessary or pertinent to the proper disbursement of the Trust
funds.
12.6 Books and Records. The records of the Employers shall be conclusive
evidence as to all information contained therein with respect to the basis
for participation in the Plan and for the calculation of Retirement
Contributions.
<PAGE> 36
12.7 Perpetuation of the Committee. In the event that the Corporation shall for
any reason cease to exist, then, unless the Plan is adopted and continued
by a successor, the members of the Committee at that time shall remain in
office until the final termination of the Trust, and any vacancies in the
membership of the Committee caused by death, resignation, disability or
other cause, shall be filled by the remaining member or members of the
Committee.
12.8 Claim Procedure. The Committee shall establish a procedure for handling
all claims by all persons. In the event any claim is denied, the Committee
shall provide a written explanation to the person stating the reasons for
denial.
12.9 Allocation or Reallocation of Fiduciary Responsibilities. The Named
Fiduciary may allocate powers and responsibilities not specifically
allocated by the Plan, or reallocate powers and responsibilities
specifically allocated by the Plan, to designated persons, partnerships or
corporations other than the Committee, and the members of the Committee
may allocate their responsibilities under the Plan among themselves. Any
such allocation, reallocation, or designation shall be in writing and
shall be filed with and retained by the secretary of the Committee with
the records of the Committee. Notwithstanding the foregoing, no
reallocation of the responsibilities provided in the Trust to manage or
control the Trust assets shall be made other than by an amendment to the
Trust.
12.10 Plan Administrator. The Corporation shall be the Plan Administrator as
described in ERISA.
12.11 Service of Process. The Corporation shall be the designated recipient of
service of process with respect to legal actions regarding the Plan.
<PAGE> 37
ARTICLE XI
AMENDMENT AND TERMINATION
11.1 Amendment and Termination. While it is intended that the Plan shall
continue in effect indefinitely, the Board may from time to time modify,
alter or amend the Plan or the Trust, and may at any time order the
temporary suspension or complete discontinuance of Retirement Contributions
or may terminate the Plan, provided, however, that
(a) no such action shall make it possible for any part of the Trust assets
(except such part as is used for the payment of expenses) to be used
for or diverted to any purpose other than for the exclusive benefit of
Participants or their Beneficiaries;
(b) no such action shall adversely affect the rights or interests of
Participants theretofore vested under the Plan; and
(c) in the event of termination of the Plan or complete discontinuance of
Retirement Contributions hereunder, all rights and interests of
Participants not theretofore vested shall become vested as of the date
of such termination or complete discontinuance.
Any action permitted to be taken by the Board under the foregoing provision
regarding the modification, alteration or amendment of the Plan or the
Trust may be taken by the Committee, using its prescribed procedures, if
such action
(a) is required by law,
(b) is estimated not to increase the annual cost of the Plan by more than
$1,000,000, or
(c) is estimated not to increase the annual cost of the Plan by more than
$25,000,000, provided such action is approved and duly executed by the
Chief Executive Officer of the Corporation.
Any action taken by the Board or Committee shall be made by or pursuant to
a resolution duly adopted by the Board or Committee and shall be evidenced
by such resolution or by a written instrument executed by such persons as
the Board or Committee shall authorize for such purpose.
The Committee shall report to the Chief Executive Officer of the
Corporation before January 31 of each year all action taken by it hereunder
during the preceding calendar year.
However, nothing herein shall be construed to prevent any modification,
alteration or amendment of the Plan or of the Trust which is required in
order to comply with any law relating to the establishment or maintenance
of the Plan and Trust, including but not
<PAGE> 38
limited to the establishment and maintenance of the Plan or Trust as a
qualified employee plan or trust under the Code, even though such
modification, alteration, or amendment is made retroactively or adversely
affects the rights or interests of a Participant under the Plan.
<PAGE> 39
ARTICLE XII
MISCELLANEOUS
12.1 Non-Guarantee of Employment. Nothing contained in this Plan shall be
construed as a contract of employment between an Employer and a
Participant, or as a right of any Participant to be continued in the
employment of his Employer, or as a limitation of the right of an Employer
to discharge any Participant with or without cause.
12.2 Rights to Trust Assets. No Participant or any other person shall have any
right to, or interest in, any part of the Trust assets upon termination of
his employment or otherwise, except as provided from time to time under
this Plan, and then only to the extent of the amounts due and payable to
such person out of the assets of the Trust. All payments as provided for in
this Plan shall be made solely out of the assets of the Trust and neither
the Employers, the Trustee, nor any member of the Committee or the Named
Fiduciary shall be liable therefor in any manner.
The Employers shall have no beneficial interest of any nature whatsoever in
any Employer Contributions after the same have been received by the
Trustee, or in the assets, income or profits of the Trust, or any part
thereof, except to the extent that forfeitures as provided in the Plan
shall be applied to reduce the Employer Contributions.
12.3 Disclaimer of Liability. Neither the Trustee, the Employers, nor any member
of the Committee or the Named Fiduciary shall be held or deemed in any
manner to guarantee the funds of the Trust against loss or depreciation.
12.4 Non-Recommendation of Investment. The availability of any security
hereunder shall not be construed as a recommendation to invest in such
security. The decision as to the choice of investment of Retirement
Contributions must be made solely by each Participant, and no officer or
employee of the Corporation or the Trustee is authorized to make any
recommendation to any Participant concerning the allocation of Retirement
Contributions hereunder.
12.5 Indemnification of Committee. The Employers shall indemnify the Committee
and the Named Fiduciary and each member thereof and hold them harmless from
the consequences of their acts or conduct in their official capacity,
including payment for all reasonable legal expenses and court costs, except
to the extent that such consequences are the result of their own willful
misconduct or breach of good faith.
12.6 Non-Alienation. Except as otherwise provided herein, no right or interest
of any Participant or Beneficiary in the Plan and the Trust shall be
subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, charge, attachment, garnishment,
execution, levy, bankruptcy, or any other disposition of any kind, either
voluntary or involuntary, prior to actual receipt of payment by the person
entitled to such right or interest under the provisions hereof, and any
such disposition or attempted disposition shall be void.
<PAGE> 40
12.7 Facility of Payment. If the Committee has notice that a Participant
entitled to a distribution hereunder, or his Beneficiary, is incapable of
caring for his own affairs, because of illness or otherwise, the Committee
may direct that any distribution from such Participant's Retirement Account
may be made, in such shares as the Committee shall determine, to the
spouse, child, parent or other blood relative of such Participant, or his
Beneficiary, or any of them, or to such other person or persons as the
Committee may determine, until such date as the Committee shall determine
that such incapacity no longer exists. The Committee shall be under no
obligation to see to the proper application of the distributions so made to
such person or persons, and any such distribution shall be a complete
discharge of any liability under the Plan to such Participant, or his
Beneficiary, to the extent of such distribution.
12.8 Action by a Committee of the Board. Any action which is required or
permitted to be taken by the Board under the Plan may be taken by the
Compensation Committee of the Board or any other duly authorized committee
of the Board designated under the By-Laws of the Corporation.
12.9 Qualified Domestic Relations Orders. Anything in this Plan to the contrary
notwithstanding:
(a) Alternate Payee's Account. An alternate payee under a domestic
relations order determined by the Corporation to be a qualified
domestic relations order (as defined in Code section 414(p)) shall
have established and maintained for him a separate Retirement Account
similar to the Retirement Account of the Participant specified in the
qualified domestic relations order. The alternate payee's Retirement
Accounts shall be credited with his interest in such Participant's
Retirement Accounts, as determined under the qualified domestic
relations order.
(b) Investment of Alternate Payee's Account. Unless a Qualified Domestic
Relations Order provides to the contrary, an Alternate Payee shall
have the right to direct the investment of any portion of a
Participant's Retirement Account payable to the Alternate Payee under
such order in the same manner as provided in this Article VII with
respect to a Participant, which amounts shall be separately accounted
for by the Trustee in the Alternate Payee's name.
(c) Alternate Payee's Beneficiary. Except to the extent otherwise provided
by the Qualified Domestic Relations Order relating to an Alternate
Payee:
(i) the Alternate Payee may designate on Timely Notice a beneficiary,
and
(ii) the beneficiary of the Alternate Payee shall be accorded under
the Plan all the rights and privileges of the Beneficiary of a
Participant in the same manner as provided in Section 9.1 (except
that no spousal consent shall be required). If the Alternate
Payee does not designate a Beneficiary, or if the Beneficiary
predeceases the Alternate Payee, benefits payable to
<PAGE> 41
the Alternate Payee which have not been distributed shall be paid
to the Alternate Payee's estate.
(d) Distribution to Alternate Payee. An alternate payee shall be entitled
to receive a distribution from the Plan in accordance with the
Qualified Domestic Relations Order relating to the Alternate Payee.
Such distribution may be made only in a method provided in Article IX
and shall include only such amounts as have become vested; provided,
however, that if a Qualified Domestic Relations Order so provides, a
distribution of the total vested amount awarded to the Alternate Payee
may be made to the Alternate Payee before the date that the
Participant specified in the Qualified Domestic Relations Order
attains his earliest retirement age (as defined in Code section
414(p)(4)(B)). An Alternate Payee shall be eligible for an Installment
Distribution under Section 9.1(c) only if the Participant is eligible
for such distribution.
(e) Vesting of Alternate Payee's Account. In the event that the Qualified
Domestic Relations Order provides for all or part of the non-vested
portion of the Participant's Retirement Account to be credited to the
account of the Alternate Payee, such amounts shall vest and/or be
forfeited at the same time and in the same manner as the Retirement
Account of the Participant specified in the Qualified Domestic
Relations Order; provided, however, that no forfeiture shall result to
the account of the Alternate Payee due to any distribution to or
withdrawal by the Participant from his Retirement Account or any
distribution to or withdrawal by the Alternate Payee from the vested
portion of the account of the Alternate Payee.
12.10 Compensation Limit. In addition to other applicable limitations which may
be set forth in the Plan and notwithstanding any other contrary provision
of the Plan, compensation taken into account under the Plan shall not
exceed $150,000, adjusted for changes in the cost of living as provided in
Code sections 401(a)(17)(B) and 415(d).
<PAGE> 42
ARTICLE XIII
MERGER
No merger or consolidation with or transfer of any assets or liabilities to any
other plan shall be made unless, upon completion thereof, the value of each
Participant's Retirement Account shall immediately after said merger,
consolidation, or transfer be equal to or greater than the value of the
Participant's Retirement Account immediately before the merger, consolidation,
or transfer (if the Plan had then terminated).
<PAGE> 43
ARTICLE XIV
TOP-HEAVY REQUIREMENTS
14.1 Top-Heavy Requirements. Notwithstanding any other provisions of this Plan,
the following rules shall apply for any Plan Year if as of the last day of
the preceding Plan Year or, in the case of the first Plan Year, the last
day of such Plan Year, based on valuations as of such date, the sum of the
present value of accrued benefits and Accounts of "key employees" (within
the meaning of Code section 416) exceeds 60% of a similar sum for all
employees under (i) each plan of the Employer or any Affiliated Employer in
which a "key employee" participates, (ii) each other plan of the Employer
or any Affiliated Employer which enables any such plan to meet the
requirements of Code section 401(a)(4) or 410 and (iii) each other plan of
the Employer or any Affiliated Employer which, if aggregated with the plan
described in (i) and (ii), would not cause any such plan described in this
clause (iii) to fail to satisfy the requirements of Code Sections 401(a)(4)
or 410. A Plan Year during which such rules apply shall be known as a
"Top-Heavy Plan Year."
(a) Vesting. A Participant who is credited with an Hour of Service during
the Top-Heavy Plan Year, or in any Plan Year after the Top-Heavy Plan
Year, and who has completed at least three years of Service shall have
a nonforfeitable right to 100% of his Retirement Account and no such
amount may become forfeitable if the Plan later ceases to be Top-Heavy
nor may such amount be forfeited under the provisions of Code sections
411(a)(3)(B) (relating to suspension of benefits upon reemployment) or
411(a)(3)(D) (relating to forfeitures upon withdrawal of mandatory
contributions). If the Plan become Top-Heavy and later ceases to be
Top-Heavy, this vesting schedule shall no longer apply and benefits
which have not at such time vested under this schedule shall vest only
in accordance with other provisions of this Plan, provided that any
Participant with at least 3 years of Service shall be entitled to
continue to utilize this schedule for vesting purposes by making an
election at the time and in the manner specified by the Committee.
(b) Required Contributions. Each Employer shall contribute on behalf of
each employee eligible to participate in the Plan, the lesser of:
(i) 3% of such employee's compensation (within the meaning of Code
section 415); or
(ii) the percentage of such employee's compensation (within the
meaning of Code section 415) which is equal to the percentage at
which contributions were made for that Plan Year on behalf of the
"key employee" for whom such percentage is the greatest for such
Plan Year, as prescribed by Code section 416(c)(2)(B) and
regulations thereunder.
<PAGE> 44
Any contribution made pursuant to this subsection 14.1(b) shall be
allocated to the Retirement Account on behalf of the employee for whom
such contribution is made.
(c) Additional Limitations. No allocations may be made to the Account of a
Participant the sum of whose defined benefit plan fraction and defined
contribution plan fraction, as defined in Code section 415(e), exceeds
1.0 when the dollar amounts, as defined in Section 12.2(b) hereof, are
multiplied by 1.0 rather than 1.25.
The provisions of this Section 14.1 shall be interpreted in accordance
with the provisions of Code section 416 and any regulations
thereunder, which are hereby expressly incorporated by reference.
(d) Coordination. In the event a top heavy minimum contribution or benefit
is required under this Plan or a defined benefit plan of an Employer
that covers a Participant, the top heavy minimum contribution or
benefit, as appropriate, shall be provided in this Plan. In the event
a top heavy minimum contribution is required under this Plan or
another defined contribution plan of an Employer that covers a
Participant, the top heavy minimum contribution shall be provided in
this Plan.
<PAGE> 45
APPENDIX A
LIST OF EMPLOYERS, PARTICIPATING UNITS
AND EFFECTIVE DATES OF PARTICIPATION
<TABLE>
<CAPTION>
Employers Participating Units Effective Date
- - - --------- ------------------- --------------
<S> <C> <C>
Avent, Inc. All exempt salaried employees* January 1, 1997
Durafab, Inc. All salaried employees* July 1, 1997
K-C Aviation Inc. All salaried employees* January 1, 1997
Kimberly-Clark Corporation All salaried employees* January 1, 1997
All hourly employees* at the
Beech Island Mill, Berkeley
Mill, and New Milford Mill.
Kimberly-Clark Financial Services, Inc. All salaried employees* January 1, 1997
Kimberly-Clark International Services All salaried employees* except those who January 1, 1997
Corporation transfer to a 50% or less owned foreign
subsidiary on a non-temporary basis.
Kimberly-Clark Technical Paper, Inc. All salaried employees* January 1, 1997
Kimberly-Clark Tissue Company All salaried employees and hourly January 1, 1997
employees (other than "office hourly
employees") of Sani-Fresh located at San
Antonio, Texas.*
All hourly organized employees at Mobile January 1, 1998
who are represented by the United
Paperworkers Union, Local Nos. 423, 1421,
1575 and 1873*
Kimberly-Clark Worldwide, Inc. All salaried employees* January 1, 1997
</TABLE>
* Including those on temporary assignment at other Employers or in other
classifications, but excluding employees on temporary assignment from another
Employer or classification.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF DELOITTE & TOUCHE LLP
We consent to the incorporation by reference in this Registration Statement
on Form S-8 of our report dated January 27, 1997, appearing and incorporated by
reference in the 1996 Annual Report on Form 10-K of Kimberly-Clark Corporation,
of our reports dated June 18, 1997, appearing and incorporated by reference in
the 1996 Annual Report on Form 11-K of the Kimberly-Clark Corporation Salaried
Employees Incentive Investment Plan and the Kimberly-Clark Corporation Hourly
Employees Incentive Investment Plan, and of our reports dated June 18, 1997,
appearing and incorporated by reference in the 1996 Annual Report on Form 11-K
of the Kimberly-Clark Tissue Company Investment Plan for Salaried Employees and
the Kimberly-Clark Tissue Company Investment Plan for Hourly Employees.
/s/ DELOITTE & TOUCHE LLP
- - - ------------------------------------------------------
DELOITTE & TOUCHE LLP
Dallas, Texas
December 30, 1997
<PAGE> 1
EXHIBIT 23.2
CONSENT OF COOPERS & LYBRAND
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 and in the related Prospectus of Kimberly-Clark
Corporation of our report dated January 30, 1996, which makes reference to the
Company adopting the provisions of Statement of Financial Accounting Standards
No. 121 in 1995 and that our audit did not include the 1995 provisions for
restructuring and other unusual charges which were audited by other auditors, on
our audits of the consolidated financial statements and financial statement
schedule of Scott Paper Company and subsidiaries as of December 30, 1995 and
December 31, 1994 and for the years then ended, appearing in and incorporated by
reference in the Annual Report on Form 10-K under the Securities Exchange Act of
1934 of Kimberly-Clark Corporation for the year ended December 31, 1996.
/s/ COOPERS & LYBRAND
- - - ------------------------------------
2400 Eleven Penn Center
Philadelphia, PA
December 30, 1997
<PAGE> 1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a Director
and/or Officer of Kimberly-Clark Corporation, a Delaware corporation (the
"Corporation"), does hereby constitute and appoint John W. Donehower, O. George
Everbach and Randy J. Vest, and each of them, with full power to act alone, the
undersigned's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for the undersigned and in the undersigned's
name, place and stead, in any and all capacities, to sign on behalf of the
undersigned a Registration Statement on Form S-8 under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the registration under
the Securities Act of shares of the Corporation's common stock, $1.25 par
value, and/or plan interests under and in accordance with the Kimberly-Clark
Corporation Defined Contribution Plans Trust, the Kimberly-Clark Corporation
Salaried Employees Incentive Investment Plan, the Kimberly-Clark Corporation
Hourly Employees Incentive Investment Plan and the Kimberly-Clark Corporation
Retirement Contribution Plan, and to execute any and all amendments to such
Registration Statement, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of November,
1997.
/s/ John F. Bergstrom
-----------------------------
John F. Bergstrom
<PAGE> 2
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a Director
and/or Officer of Kimberly-Clark Corporation, a Delaware corporation (the
"Corporation"), does hereby constitute and appoint John W. Donehower, O. George
Everbach and Randy J. Vest, and each of them, with full power to act alone, the
undersigned's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for the undersigned and in the undersigned's
name, place and stead, in any and all capacities, to sign on behalf of the
undersigned a Registration Statement on Form S-8 under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the registration under
the Securities Act of shares of the Corporation's common stock, $1.25 par
value, and/or plan interests under and in accordance with the Kimberly-Clark
Corporation Defined Contribution Plans Trust, the Kimberly-Clark Corporation
Salaried Employees Incentive Investment Plan, the Kimberly-Clark Corporation
Hourly Employees Incentive Investment Plan and the Kimberly-Clark Corporation
Retirement Contribution Plan, and to execute any and all amendments to such
Registration Statement, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of November,
1997.
/s/ Pastora San Juan Cafferty
-----------------------------
Pastora San Juan Cafferty
<PAGE> 3
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a Director
and/or Officer of Kimberly-Clark Corporation, a Delaware corporation (the
"Corporation"), does hereby constitute and appoint John W. Donehower, O. George
Everbach and Randy J. Vest, and each of them, with full power to act alone, the
undersigned's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for the undersigned and in the undersigned's
name, place and stead, in any and all capacities, to sign on behalf of the
undersigned a Registration Statement on Form S-8 under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the registration under
the Securities Act of shares of the Corporation's common stock, $1.25 par
value, and/or plan interests under and in accordance with the Kimberly-Clark
Corporation Defined Contribution Plans Trust, the Kimberly-Clark Corporation
Salaried Employees Incentive Investment Plan, the Kimberly-Clark Corporation
Hourly Employees Incentive Investment Plan and the Kimberly-Clark Corporation
Retirement Contribution Plan, and to execute any and all amendments to such
Registration Statement, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of November,
1997.
/s/ Paul J. Collins
-----------------------------
Paul J. Collins
<PAGE> 4
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a Director
and/or Officer of Kimberly-Clark Corporation, a Delaware corporation (the
"Corporation"), does hereby constitute and appoint John W. Donehower, O. George
Everbach and Randy J. Vest, and each of them, with full power to act alone, the
undersigned's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for the undersigned and in the undersigned's
name, place and stead, in any and all capacities, to sign on behalf of the
undersigned a Registration Statement on Form S-8 under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the registration under
the Securities Act of shares of the Corporation's common stock, $1.25 par
value, and/or plan interests under and in accordance with the Kimberly-Clark
Corporation Defined Contribution Plans Trust, the Kimberly-Clark Corporation
Salaried Employees Incentive Investment Plan, the Kimberly-Clark Corporation
Hourly Employees Incentive Investment Plan and the Kimberly-Clark Corporation
Retirement Contribution Plan, and to execute any and all amendments to such
Registration Statement, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of November,
1997.
/s/ Robert W. Decherd
-----------------------------
Robert W. Decherd
<PAGE> 5
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a Director
and/or Officer of Kimberly-Clark Corporation, a Delaware corporation (the
"Corporation"), does hereby constitute and appoint John W. Donehower, O. George
Everbach and Randy J. Vest, and each of them, with full power to act alone, the
undersigned's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for the undersigned and in the undersigned's
name, place and stead, in any and all capacities, to sign on behalf of the
undersigned a Registration Statement on Form S-8 under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the registration under
the Securities Act of shares of the Corporation's common stock, $1.25 par
value, and/or plan interests under and in accordance with the Kimberly-Clark
Corporation Defined Contribution Plans Trust, the Kimberly-Clark Corporation
Salaried Employees Incentive Investment Plan, the Kimberly-Clark Corporation
Hourly Employees Incentive Investment Plan and the Kimberly-Clark Corporation
Retirement Contribution Plan, and to execute any and all amendments to such
Registration Statement, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of November,
1997.
/s/ William O. Fifield
-----------------------------
William O. Fifield
<PAGE> 6
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a Director
and/or Officer of Kimberly-Clark Corporation, a Delaware corporation (the
"Corporation"), does hereby constitute and appoint John W. Donehower, O. George
Everbach and Randy J. Vest, and each of them, with full power to act alone, the
undersigned's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for the undersigned and in the undersigned's
name, place and stead, in any and all capacities, to sign on behalf of the
undersigned a Registration Statement on Form S-8 under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the registration under
the Securities Act of shares of the Corporation's common stock, $1.25 par
value, and/or plan interests under and in accordance with the Kimberly-Clark
Corporation Defined Contribution Plans Trust, the Kimberly-Clark Corporation
Salaried Employees Incentive Investment Plan, the Kimberly-Clark Corporation
Hourly Employees Incentive Investment Plan and the Kimberly-Clark Corporation
Retirement Contribution Plan, and to execute any and all amendments to such
Registration Statement, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of November,
1997.
/s/ Claudio X. Gonzalez
-----------------------------
Claudio X. Gonzalez
<PAGE> 7
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a Director
and/or Officer of Kimberly-Clark Corporation, a Delaware corporation (the
"Corporation"), does hereby constitute and appoint John W. Donehower, O. George
Everbach and Randy J. Vest, and each of them, with full power to act alone, the
undersigned's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for the undersigned and in the undersigned's
name, place and stead, in any and all capacities, to sign on behalf of the
undersigned a Registration Statement on Form S-8 under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the registration under
the Securities Act of shares of the Corporation's common stock, $1.25 par
value, and/or plan interests under and in accordance with the Kimberly-Clark
Corporation Defined Contribution Plans Trust, the Kimberly-Clark Corporation
Salaried Employees Incentive Investment Plan, the Kimberly-Clark Corporation
Hourly Employees Incentive Investment Plan and the Kimberly-Clark Corporation
Retirement Contribution Plan, and to execute any and all amendments to such
Registration Statement, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of November,
1997.
/s/ Louis E. Levy
-----------------------------
Louis E. Levy
<PAGE> 8
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a Director
and/or Officer of Kimberly-Clark Corporation, a Delaware corporation (the
"Corporation"), does hereby constitute and appoint John W. Donehower, O. George
Everbach and Randy J. Vest, and each of them, with full power to act alone, the
undersigned's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for the undersigned and in the undersigned's
name, place and stead, in any and all capacities, to sign on behalf of the
undersigned a Registration Statement on Form S-8 under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the registration under
the Securities Act of shares of the Corporation's common stock, $1.25 par
value, and/or plan interests under and in accordance with the Kimberly-Clark
Corporation Defined Contribution Plans Trust, the Kimberly-Clark Corporation
Salaried Employees Incentive Investment Plan, the Kimberly-Clark Corporation
Hourly Employees Incentive Investment Plan and the Kimberly-Clark Corporation
Retirement Contribution Plan, and to execute any and all amendments to such
Registration Statement, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of November,
1997.
/s/ Frank A. McPherson
-----------------------------
Frank A. McPherson
<PAGE> 9
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a Director
and/or Officer of Kimberly-Clark Corporation, a Delaware corporation (the
"Corporation"), does hereby constitute and appoint John W. Donehower, O. George
Everbach and Randy J. Vest, and each of them, with full power to act alone, the
undersigned's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for the undersigned and in the undersigned's
name, place and stead, in any and all capacities, to sign on behalf of the
undersigned a Registration Statement on Form S-8 under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the registration under
the Securities Act of shares of the Corporation's common stock, $1.25 par
value, and/or plan interests under and in accordance with the Kimberly-Clark
Corporation Defined Contribution Plans Trust, the Kimberly-Clark Corporation
Salaried Employees Incentive Investment Plan, the Kimberly-Clark Corporation
Hourly Employees Incentive Investment Plan and the Kimberly-Clark Corporation
Retirement Contribution Plan, and to execute any and all amendments to such
Registration Statement, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of November,
1997.
/s/ Linda Johnson Rice
-----------------------------
Linda Johnson Rice
<PAGE> 10
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a Director
and/or Officer of Kimberly-Clark Corporation, a Delaware corporation (the
"Corporation"), does hereby constitute and appoint John W. Donehower, O. George
Everbach and Randy J. Vest, and each of them, with full power to act alone, the
undersigned's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for the undersigned and in the undersigned's
name, place and stead, in any and all capacities, to sign on behalf of the
undersigned a Registration Statement on Form S-8 under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the registration under
the Securities Act of shares of the Corporation's common stock, $1.25 par
value, and/or plan interests under and in accordance with the Kimberly-Clark
Corporation Defined Contribution Plans Trust, the Kimberly-Clark Corporation
Salaried Employees Incentive Investment Plan, the Kimberly-Clark Corporation
Hourly Employees Incentive Investment Plan and the Kimberly-Clark Corporation
Retirement Contribution Plan, and to execute any and all amendments to such
Registration Statement, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of November,
1997.
/s/ Wayne R. Sanders
-----------------------------
Wayne R. Sanders
<PAGE> 11
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a Director
and/or Officer of Kimberly-Clark Corporation, a Delaware corporation (the
"Corporation"), does hereby constitute and appoint John W. Donehower, O. George
Everbach and Randy J. Vest, and each of them, with full power to act alone, the
undersigned's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for the undersigned and in the undersigned's
name, place and stead, in any and all capacities, to sign on behalf of the
undersigned a Registration Statement on Form S-8 under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the registration under
the Securities Act of shares of the Corporation's common stock, $1.25 par
value, and/or plan interests under and in accordance with the Kimberly-Clark
Corporation Defined Contribution Plans Trust, the Kimberly-Clark Corporation
Salaried Employees Incentive Investment Plan, the Kimberly-Clark Corporation
Hourly Employees Incentive Investment Plan and the Kimberly-Clark Corporation
Retirement Contribution Plan, and to execute any and all amendments to such
Registration Statement, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of November,
1997.
/s/ Wolfgang R. Schmitt
-----------------------------
Wolfgang R. Schmitt
<PAGE> 12
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, a Director
and/or Officer of Kimberly-Clark Corporation, a Delaware corporation (the
"Corporation"), does hereby constitute and appoint John W. Donehower, O. George
Everbach and Randy J. Vest, and each of them, with full power to act alone, the
undersigned's true and lawful attorney-in-fact and agent, with full power of
substitution and resubstitution, for the undersigned and in the undersigned's
name, place and stead, in any and all capacities, to sign on behalf of the
undersigned a Registration Statement on Form S-8 under the Securities Act of
1933, as amended (the "Securities Act"), with respect to the registration under
the Securities Act of shares of the Corporation's common stock, $1.25 par
value, and/or plan interests under and in accordance with the Kimberly-Clark
Corporation Defined Contribution Plans Trust, the Kimberly-Clark Corporation
Salaried Employees Incentive Investment Plan, the Kimberly-Clark Corporation
Hourly Employees Incentive Investment Plan and the Kimberly-Clark Corporation
Retirement Contribution Plan, and to execute any and all amendments to such
Registration Statement, granting unto said attorneys-in-fact and agents, and
each of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done, as fully to all intents and purposes
as the undersigned might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or any one of them, or his
substitute or their substitutes, lawfully do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, I have hereunto set my hand this 15th day of November,
1997.
/s/ Randall L. Tobias
-----------------------------
Randall L. Tobias
