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1976 Equity Participation Plan

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KIMBERLY-CLARK CORPORATION 1976 EQUITY PARTICIPATION PLAN (as amended as of December 19, 1991)


1. PURPOSE


This 1976 Equity Participation Plan (the "Plan") of Kimberly-Clark Corporation (the "Corporation") is intended to provide a means of encouraging the acquisition of an ownership interest in the Corporation by those employees who contribute materially by managerial, scientific, or other innovative means to the success of the Corporation, a consolidated subsidiary or an equity company ("Subsidiaries"), thereby increasing their motivation for an interest in the Corporation's or Subsidiaries' long-term success.


2. EFFECTIVE DATE


The Plan became effective as of April 29, 1976 upon (a) approval by the Board of Directors of the Corporation (the "Board of Directors"), and (b) approval by the shareholders of the Corporation (the "shareholders") at the 1976 Annual Meeting.


3. ADMINISTRATION


The Plan shall be administered by the Compensation Committee of the Board of Directors consisting of not less than three (3) members of the Board of Directors, provided that if all members of the Committee are not disinterested persons, the Plan shall be administered by a committee, all of whom are disinterested persons, appointed by the Board of Directors and consisting of three (3) or more directors with full authority to act in the matter. For purposes of this section, a disinterested person shall mean a person who, at the time action is taken, is so defined for purposes of rule 16b-3 under the Securities Act of 1934, or any successor provision.


The Committee shall have the power to interpret and construe the Plan and other powers and duties as set forth in the Plan, and any such interpretation and construction of any provisions of this Plan shall be final. No member of the Board of Directors or the Committee shall be liable for any action or determination made in good faith. The Committee shall make a report to the Board of Directors within 60 days following the close of each calendar year that the Plan is in operation. The report shall specify the employees who received awards under the Plan during the prior year, the form and size of the awards to the individual employees, and the status of prior awards.


4. ELIGIBILITY


The Committee shall from time to time select the employees (hereafter referred to as "Participants") who are to receive awards under the Plan, from among those employees who are determined by the Committee to be in a position to contribute materially to the success of the Corporation or a Subsidiary, or to have in the past so contributed. Eligibility to participate in the Plan shall be limited to full-time employees (including officers and directors who are full-time employees) of the Corporation and its Subsidiaries. The participation of employees of a Subsidiary shall be under such conditions as the Committee shall prescribe.


5. FORM OF AWARDS


All awards under the Plan shall be made in the form of participation shares or stock options. Generally, an award will consist of an equal number of participation shares and optioned shares, but the Committee may make awards solely in stock options or participation shares, or in any combination of the two that it deems appropriate.


6. PARTICIPATION SHARES


The Committee shall from time to time determine from among the eligible employees those Participants who shall receive participation share awards. The Committee shall advise Participants of their participation share awards by a letter indicating the number of shares awarded and the following terms and conditions of the award.


(a) Base Value of Participation Shares. The number
of participation shares awarded to a Participant shall be
entered in a Participant's memorandum account established
for this purpose as of the date of the award. Each
participation share shall be assigned a base value equal to
the book value of one common share of the Corporation as of
the close of the fiscal year preceding the date of the
award. Book value per share shall be defined for purposes
of the Plan as common stockholders' equity, as reported in
the year end audited consolidated financial statements of
the Corporation, divided by the number of shares of the
Corporation's Common Stock outstanding as of the date of
such financial statements. Common stock outstanding shall
include such stock held by stockholders, but does not
include authorized but unissued shares or treasury shares.


(b) Participation Share Payments. A Participant
shall be entitled to a cash payment when the award reaches
maturity equal to the book value of his participation
shares at that date, less the base value of his
participation shares at the date of award; provided,
however, that in no event shall such payment exceed the
base value of his/her participation shares, and provided
further that such payment shall be subject to adjustment as
provided in subsections 6(e) and 14(d) and section 11. The
award shall reach maturity at the earlier of the close of
the fiscal year (i) in which occurs the seventh anniversary
of the date of the award or (ii) in which book value,
measured from the close of the fiscal year prior to the
date of award, increases by 100% plus an amount equal to
any reduction in book value as provided in subsection 6(d).
The book value at the date of maturity shall be the book
value per share of the Corporation as of the close of the
fiscal year of the Corporation in which maturity is
reached, less any reductions in book value as provided in
subsection 6(d).


(c) Dividend Share Payments. A Participant shall be
entitled to an additional cash payment when the award
reaches maturity equal to the number of dividend shares
credited to his/her memorandum account times the book value
per common share of the Corporation as of the date of
maturity. At the end of each fiscal year of the
Corporation, the amount available for the acquisition of
dividend shares for the Participant's memorandum account
shall be determined by multiplying the cash dividend
declared per common share of the Corporation during such
year (but subsequent to the date of the award in the case
of participation shares and subsequent to the date of
crediting in the case of dividend shares) by the total of
the Participant's participation shares and dividend shares.
The amount so determined shall be divided by the book value
of one common share of the Corporation as of the close of
such fiscal year, and the quotient shall represent the
number of full and fractional dividend shares credited to
the Participant's memorandum account for that fiscal year.


(d) Dividend Maintenance. No dividend share shall be
credited to a participant's memorandum account in any year
(i) in which the total cash dividends declared per common
share of the Corporation are less than $.90 with respect to
awards made before April 30, 1981, and $1.80 with respect
to awards made after April 29, 1981, or (ii) in which the
total cash dividends declared per common share of the
Corporation are less than the total cash dividends declared
per common share of the Corporation in the immediately
preceding year, except that in 1984 and thereafter the
determination whether the total cash dividends declared are
less than in the immediately preceding year shall be made
after adjustments for the two-for-one stock splits which
occurred in 1984 and 1987, and the two-for-one stock split
which was declared on November 12, 1991, in accordance with
generally accepted account principles. When total cash
dividends declared per common share are less than total
cash dividends declared per common share in the immediately
preceding year as described in clause (ii) above, the book
value of each participation share held by a Participant
shall be reduced by an amount equal to the cash dividend
declared in such immediately preceding year less the cash
dividend declared in the year the cash dividend is reduced.
This subsection 6(d) shall be inoperative during such
fiscal years of the Corporation as the Committee in its
discretion shall determine.


(e) Adjustments. Book value per share for purposes
of the Plan or the number of participation or dividend
shares may be adjusted to such an extent as may be
determined by the Board of Directors to preserve the
benefit of the arrangement for the Participant and the
Corporation if, in the opinion of the Committee, after
consultation with the Corporation's independent
accountants, changes in the Corporation's accounting
policies, acquisitions or other unusual or extraordinary
items have disproportionately and materially affected the
Corporation's net income, book value per share, shares of
Common Stock outstanding, or common stockholders' equity.


(f) Absence of Rights as a Stockholder. A
Participant shall not be entitled, on the basis of a
participation share award, to any of the rights of a
stockholder in the Corporation, including the right to vote
and receive dividends on the Corporation's Common Stock.


(g) Date of Payment. Except as provided in
subsections 8(a) and 14(j), the cash payment provided for
in subsection 6(b) and (c) shall be payable in the
discretion of the Committee, but no later than 90 days
following the end of the fiscal year of the Corporation in
which the award reaches maturity. The Corporation shall
deduct applicable withholding and employment taxes from all
payments made to Participants.


(h) Termination of Employment. Except as provided in
subsections 8(a) and 14(j), any participation or dividend
shares credited to a Participant's memorandum account shall
be subject to forfeiture if the Participant is dismissed or
leaves the service of the Corporation or a Subsidiary prior
to the maturity of the award for any reason other than
death, retirement, or total and permanent disability. In
the event of death, retirement or total and permanent
disability, the award shall become payable under
subsections 6(b) and (c) as if such event resulted in the
award reaching maturity as of the close of the fiscal year
in which such event occurs.


(i) Termination of Award. Following the cash payment
provided for in subsections 6(b) and (c), any rights of the
Participant (or the Participant's estate or beneficiaries)
in the participation share award shall end.


7. STOCK OPTIONS


The Committee shall determine and designate from time to time the eligible employees to whom options are to be granted and the number of common shares of the Corporation to be optioned to each. After granting an option to a Participant, the Committee shall cause to
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